UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             -----------------------

                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
              of the United States Securities Exchange Act of 1934

                             -----------------------


For Quarter Ended March 31, 1997                     Commission File No. 2-95011


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
             (Exact name of registrant as specified in its charter)


         Massachusetts                                                04-2846629
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


    One Financial Center, 21st Floor, Boston, MA                           02111
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code                (617) 482-8000

                              ---------------------


                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                  Yes X No ___

                             There are no Exhibits.

                                  Page 1 of 12

<PAGE>

<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)


                          INDEX                                                                                  Page No.

<S>           <C>                                                                                                <C>
Part I.       FINANCIAL INFORMATION

              Financial Statements

                    Balance Sheets as of March 31, 1997 and December 31, 1996                                    3

                    Statements of Operations
                         Quarters Ended March 31, 1997 and 1996                                                  4

                    Statements of Cash Flows
                         Quarters Ended March 31, 1997 and 1996                                                  5

                    Notes to Financial Statements                                                                6 - 7

              Management's Discussion and Analysis of Financial Condition and                                    8 - 9
                    Results of Operations

              Computer Equipment Portfolio                                                                       10

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                                        11

              Signature                                                                                          12
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                                 Balance Sheets

                                     Assets
                                                                                    (Unaudited)               (Audited)
                                                                                      3/31/97                 12/31/96
                                                                                 ----------------        ----------------

<S>                                                                              <C>                     <C>             
Investment property, at cost (note 3):
   Computer equipment                                                            $        438,842        $        443,464
     Less accumulated depreciation                                                        343,761                 334,414
                                                                                 ----------------        ----------------
       Investment property, net                                                            95,081                 109,050

Cash and cash equivalents                                                                  60,047                  18,943
Marketable securities (note 5)                                                                  -                  27,976
Rents receivable, net (note 2)                                                              6,955                   5,611
Sales receivable                                                                            4,251                   8,801
                                                                                 ----------------        ----------------

     Total assets                                                                $        166,334        $        170,381
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Accounts payable and accrued expenses - affiliates (note 4)                   $         14,760        $          4,826
   Accounts payable and accrued expenses                                                  126,583                 118,436
   Unearned rental revenue                                                                  6,910                   4,288
                                                                                 ----------------        ----------------

     Total liabilities                                                                    148,253                 127,550
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                636,595                 636,408
     Cumulative cash distributions                                                       (637,338)               (637,338)
     Unrealized losses on marketable securities (note 5)                                        -                     (70)
                                                                                 ----------------        ----------------
                                                                                              257                       -
                                                                                 ----------------        ----------------
   Limited Partners (25,020 units):
     Capital contribution, net of offering costs                                       11,139,685              11,139,685
     Cumulative net income                                                              1,018,844               1,019,500
     Cumulative cash distributions                                                    (12,140,705)            (12,109,430)
     Unrealized losses on marketable securities (note 5)                                        -                  (6,924)
                                                                                 ----------------        ----------------
                                                                                           17,824                  42,831
                                                                                 ----------------        ----------------
     Total partners' equity                                                                18,081                  42,831
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $        166,334        $        170,381
                                                                                 ================        ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                            Statements of Operations
                     Quarters Ended March 31, 1997 and 1996
                                   (Unaudited)

                                                                                           1997                    1996
                                                                                     --------------         ---------------

<S>                                                                                  <C>                    <C>            
Revenue:
   Rental income                                                                     $       30,016         $        78,267
   Other income                                                                               3,687                       -
   Interest income                                                                              435                     913
   Net gain on sale of equipment                                                              4,250                  96,525
   Net loss on sale of marketable securities                                                 (5,250)                      -
                                                                                     --------------         ---------------

       Total revenue                                                                         33,138                 175,705
                                                                                     --------------         ---------------

Costs and expenses:
   Depreciation                                                                              13,969                  33,367
   Interest                                                                                       -                     676
   Related party expenses (note 4):
     Management fees                                                                          2,709                   3,346
     General and administrative                                                              16,929                  17,475
                                                                                     --------------         ---------------

       Total costs and expenses                                                              33,607                  54,864
                                                                                     --------------         ---------------

Net (loss) income                                                                    $         (469)        $       120,841
                                                                                     ==============         ===============

Net (loss) income per Limited Partnership Unit                                       $         (.03)        $          3.64
                                                                                     ==============         ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                            Statements of Cash Flows
                     Quarters Ended March 31, 1997 and 1996
                                   (Unaudited)

                                                                                               1997                 1996
                                                                                         ----------------     ----------------

<S>                                                                                      <C>                  <C>             
Cash flows from operating activities:
   Net (loss) income                                                                     $           (469)    $        120,841
                                                                                         ----------------     ----------------

   Adjustments to reconcile  net (loss) income to net cash
     provided by operating  activities:
       Depreciation                                                                                13,969               33,367
       Net gain on sale of equipment                                                               (4,250)             (96,525)
       Net loss on sale of marketable securities                                                    5,250                    -
       Net decrease (increase) in current assets                                                    3,206              (28,351)
       Net increase (decrease) in current liabilities                                              20,703               (8,117)
                                                                                         ----------------     ----------------

         Total adjustments                                                                         38,878              (99,626)
                                                                                         ----------------     ----------------

         Net cash provided by operating activities                                                 38,409               21,215
                                                                                         ----------------     ----------------

Cash flows from investing activities:
   Proceeds from sale of marketable securities                                                     29,720                    -
   Proceeds from sales of investment property                                                       4,250               96,525
                                                                                         ----------------     ----------------

         Net cash provided by investing activities                                                 33,970               96,525
                                                                                         ----------------     ----------------

Cash flows from financing activities:
   Principal payments on long-term debt                                                                 -              (14,030)
   Cash distributions to partners                                                                 (31,275)             (65,842)
                                                                                         ----------------     ----------------

         Net cash used in financing activities                                                    (31,275)             (79,872)
                                                                                         ----------------     ----------------

Net increase in cash and cash equivalents                                                          41,104               37,868

Cash and cash equivalents at beginning of period                                                   18,943               58,929
                                                                                         ----------------     ----------------

Cash and cash equivalents at end of period                                               $         60,047     $         96,797
                                                                                         ================     ================

Supplemental cash flow information:
   Interest paid during the period                                                       $              -     $            676
                                                                                         ================     ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
                Quarters Ended March 31, 1997 and March 31, 1996
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing financial statements of Wellesley Lease Income Limited Partnership
III-C (the  "Partnership")  have been prepared in accordance  with the rules and
regulations of the Securities and Exchange  Commission for Form 10-Q and reflect
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the results for the interim periods presented.  Pursuant to such
rules and  regulations,  certain note  disclosures  which are normally  required
under  generally  accepted  accounting  principles  have  been  omitted.  It  is
recommended  that these  financial  statements be read in  conjunction  with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1996.

(2)   Summary of Significant Accounting Policies

Allowance for Doubtful Accounts

The financial  statements  include allowances for estimated losses on receivable
balances.  The  allowances  for  doubtful  accounts  are based on past write off
experience  and an evaluation  of potential  uncollectible  accounts  within the
current  receivable  balances.  Receivable  balances  which are determined to be
uncollectible  are charged against the allowance and subsequent  recoveries,  if
any, are credited to the allowance. At March 31, 1997 and December 31, 1996, the
allowance for doubtful accounts included in rents receivable was $8,377.

(3)   Investment Property

At March 31, 1997, the Partnership  owned computer  equipment with a depreciated
cost basis of $95,081,  subject to existing  leases.  All  purchases of computer
equipment are subject to a 3% acquisition fee paid to the General Partner.


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
                Quarters Ended March 31, 1997 and March 31, 1996
                                   (Unaudited)

(4)   Related Party Transactions

Fees,  commissions  and other expenses paid or accrued by the Partnership to the
General  Partner or  affiliates  of the General  Partner for the quarters  ended
March 31 are as follows:

                                                     1997               1996
                                                     ----               ----

Management fees                                  $      2,709       $      3,346
Reimbursable expenses paid                             20,215             21,610
                                                 ------------       ------------

                                                 $     22,924       $     24,956
                                                 ============       ============

Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 3% of the purchase price paid by the Partnership
for the  equipment.  The General  Partner is also  entitled to a management  fee
equal to 7% of the monthly rental  billings  collected.  Also,  the  Partnership
reimburses the General Partner and its affiliates for certain expenses  incurred
by them in connection with the operation of the Partnership.

(5)   Fair Values of Financial Instruments

Pursuant to Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity  Securities," which requires  investments
in debt and equity  securities  other than those  accounted for under the equity
method  to be  carried  at fair  value or  amortized  cost  for debt  securities
expected to be held to maturity,  the Partnership has classified its investments
in equity  securities as available  for sale.  Accordingly,  the net  unrealized
gains and losses computed in marking these  securities to market are reported as
a component of partners'  equity.  At March 31,  1997,  there are no  marketable
securities owned by the Partnership,  therefore,  there is no unrealized gain or
loss included in partners' equity.

The fair value is based on currently  quoted market  prices.  The cost basis and
estimated  fair value of the  Partnership's  marketable  securities at March 31,
1997 and December 31, 1996, respectively, are as follows:

<TABLE>
<CAPTION>
                                                                             March 31, 1997               December 31, 1996
                                                                       -------------------------    ---------------------------

                                                                       Cost           Fair          Cost               Fair
                                                                       Basis          Value         Basis              Value

<S>                                                                    <C>            <C>           <C>                <C>     
Investment in Continental Information
     Systems Corporation Stock                                         $         -    $         -   $ 34,970           $ 27,976
                                                                       ===========    ===========   ========           ========
</TABLE>



<PAGE>


                   WELLESLEY INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Results of Operations

The following discussion relates to the Partnership's operations for the quarter
ended March 31, 1997, in comparison to the quarter ended March 31, 1996.

The  Partnership  realized a net loss of $469 and net income of $120,841 for the
quarters ended March 31, 1997 and 1996,  respectively.  Rental income  decreased
$48,251 or 62% between the three month periods. The decrease is primarily due to
lower  rental rates  obtained on equipment  lease  extensions  and  remarketings
resulting  after the initial lease term expires and due to a net decrease in the
overall size of the equipment  portfolio.  Other income  reported in 1997 is the
result of the reduction of overstated management fees recorded in prior periods.
Interest income  decreased as a result of lower short-term  investment  balances
held during 1997. The decrease in net gain on sale of equipment is attributed to
a lower number of equipment sales in the current  quarter.  The net loss on sale
of marketable  securities in 1997 reflects the  below-cost  sale of  Continental
Information  Systems  Corporation  stock.  The stock had been  received from the
Trustee of the Liquidating Estate of CIS Corporation (the "Estate"),  the former
ultimate  parent  company of the General  Partner,  as part of a  settlement  of
certain outstanding issues between the Partnership and the Estate.

Total  costs and  expenses  decreased  $21,257 or 39%  between  the three  month
periods.  The decrease is primarily  the result of lower  depreciation  expense.
Depreciation  expense  decreased in the current  quarter due to a portion of the
equipment  portfolio  becoming fully  depreciated  and due to a reduction in the
equipment  portfolio.  Management fees and general and  administrative  expenses
decreased in relation to the reduction in rental income.

The  Partnership  recorded a  net loss per Limited  Partnership Unit of $.03 and
net income  per Limited  Partnership Unit of $3.64  for the quarters ended March
31, 1997 and 1996, respectively.

Liquidity and Capital Resources

For the quarter ended March 31, 1997,  rental  revenue  generated from operating
leases and sales proceeds  generated  from  equipment and marketable  securities
sales were the primary sources of funds for the Partnership. As equipment leases
terminate,  the General Partner  determines if the equipment will be extended to
the same lessee,  remarketed to another  lessee,  or sold. This decision is made
upon analyzing which option generates the most favorable result.


<PAGE>


                   WELLESLEY INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Rental income has continued to decrease due to two factors.  First,  lower rates
are obtained on the remarketing of existing equipment upon the expiration of the
original lease.  Typically the remarketed rates are lower due to the decrease in
useful life of the equipment. Second, the increasing change of technology in the
computer  industry  usually  decreases  the  demand  for older  equipment,  thus
increasing the possibility of obsolescence.  Both of these factors together will
cause  remarketed  rates to be lower than original  rates and will cause certain
leases to terminate upon expiration.  This decrease,  however, should not affect
the Partnership's  ability to meet its future cash  requirements,  including its
long-term debt obligations. In order that future cash flows should be sufficient
to meet the Partnership's  operating expenses and liabilities,  additional funds
will be obtained  through the sale of  equipment  and through a reduction in the
rate of cash  distributions.  Future rental  revenues  amount to $91,623 and are
scheduled to be received over the next three years.

During the first quarter of 1997, the General  Partner  announced its intentions
of winding  down the  operations  of the  Partnership.  It is  anticipated  that
substantially all of the assets will be liquidated and the proceeds will be used
to settle all outstanding liabilities and make a final distribution during 1997.

For  the  three  months  ended  March  31,  1997,  the  Partnership's  investing
activities  generated $4,250 in sales proceeds on the sale of fully  depreciated
equipment with an original cost basis of $4,622.

Cash  distributions  are  currently  halted in an effort to  minimize  costs and
accumulate cash in anticipation of a final distribution to the Partners once the
Partnership  has  been  liquidated.  The  effects  of  inflation  have  not been
significant to the  Partnership and are not expected to have any material impact
in future periods.



<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)

                    Computer Equipment Portfolio (Unaudited)
                                 March 31, 1997

Lessee

Baylor Health Network, Incorporated
Centura Bank
Hughes Aircraft Company, Incorporated
J. Walter Thompson & Co.
JumboSports, Incorporated
New York Telephone
USG Corporation

Equipment Description                         Acquisition Price

Computer peripherals                             $       83,380
Processors & upgrades                                   232,586
Telecommunications                                      109,711
Other                                                    13,165
                                                 --------------

                                                 $      438,842
                                                 ==============

<PAGE>


                           PART II. OTHER INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
                      (A Massachusetts Limited Partnership)


Item 1.        Legal Proceedings
               Response:  None

Item 2.        Changes in the Rights of the Partnership's Security Holders
               Response:  None

Item 3.        Defaults by the Partnership on its Senior Securities
               Response:  None

Item 4.        Results of Votes of Security Holders
               Response:  None

Item 5.        Other Information
               Response:  None

Item 6.        Exhibits and Reports on Form 8-K
               Response:

               A.  None

               B.  None


<PAGE>


                                    SIGNATURE

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-C
(Registrant)

By:    Wellesley Leasing Partnership,
       its General Partner

By:    TLP Leasing Programs, Inc.,
       one of its Corporate General Partners




By:    Arthur P. Beecher,
       President

Date:  May 12, 1997