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 June 30, 1997                      Commission File No. 2-95011


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


         Massachusetts                                                04-2850823
(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 13

<PAGE>

<TABLE>
<CAPTION>

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


                                      INDEX                                                                    Page No.

Part I.    FINANCIAL INFORMATION

<S>           <C>                                                                                              <C>
              Financial Statements

                    Balance Sheets as of June 30, 1997 and December 31, 1996                                   3

                    Statements of Operations
                          Quarters Ended June 30, 1997 and 1996 and
                          Six Months Ended June 30, 1997 and 1996                                              4

                    Statements of Cash Flows
                          Six Months Ended June 30, 1997 and 1996                                              5

                    Notes to Financial Statements                                                              6 - 7

              Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                                                  8 - 10

              Computer Equipment Portfolio                                                                     11

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                                      12

              Signature                                                                                        13

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

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

                                 Balance Sheets

                                     Assets                                        (Unaudited)              (Audited)
                                                                                      6/30/97               12/31/96
                                                                                 ----------------        ----------------

<S>                                                                              <C>                     <C>             
Investment property, at cost (note 3):
   Computer equipment                                                            $      6,087,314        $      5,844,357
     Less accumulated depreciation                                                      3,901,642               3,824,442
                                                                                 ----------------        ----------------
       Investment property, net                                                         2,185,672               2,019,915

Cash and cash equivalents                                                                 257,252                 265,199
Rents receivable, net (note 2)                                                             51,481                  69,908
Sales receivable, net (note 2)                                                              9,954                       -
Accounts receivable - affiliates (note 4)                                                  16,582                  84,022
Other assets                                                                               24,440                  12,779
                                                                                 ----------------        ----------------

     Total assets                                                                $      2,545,381        $      2,451,823
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 5)                                    $        647,782        $        550,139
   Accounts payable and accrued expenses - affiliates (note 4)                             29,264                  27,168
   Accounts payable and accrued expenses                                                   40,281                  93,581
   Unearned rental revenue                                                                 19,581                  15,125
   Long-term debt, less current portion (note 5)                                          297,798                 245,786
                                                                                 ----------------        ----------------

     Total liabilities                                                                  1,034,706                 931,799
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                589,694                 579,070
     Cumulative cash distributions                                                       (590,694)               (580,070)
                                                                                 ----------------        ----------------
                                                                                                -                       -
                                                                                 ----------------        ----------------
   Limited Partners (20,185 units):
     Capital contribution, net of offering costs                                        8,987,039               8,987,039
     Cumulative net income                                                              3,746,500               3,553,999
     Cumulative cash distributions                                                    (11,222,864)            (11,021,014)
                                                                                 ----------------        ----------------
                                                                                        1,510,675               1,520,024
                                                                                 ----------------        ----------------
     Total partners' equity                                                             1,510,675               1,520,024
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $      2,545,381        $      2,451,823
                                                                                 ================        ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

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

                            Statements of Operations
                                   (Unaudited)

                                                    Quarters Ended                                  Six Months Ended
                                                        June 30,                                        June 30,
                                           ---------------------------------              -----------------------------------
                                                 1997              1996                          1997              1996
                                           ---------------------------------              -----------------------------------

<S>                                        <C>                 <C>                        <C>                 <C>            
Revenue:
   Rental income                           $       423,709     $     385,871              $       808,856     $       837,186
   Interest income                                   1,365             4,904                        3,134               7,342
   Net gain on sale
     of equipment                                    8,412            25,088                       40,556             229,348
                                           ---------------     -------------              ---------------     ---------------

       Total revenue                               433,486           415,863                      852,546           1,073,876
                                           ---------------     -------------              ---------------     ---------------

Costs and expenses:
   Depreciation                                    272,802           296,722                      514,509             598,840
   (Reversal of) provision for
     doubtful accounts                             (17,960)           11,244                      (43,499)             11,244
   Interest                                         15,218            12,358                       31,194              27,821
   Related party expenses (note 4):
     Management fees                                30,248            36,348                       61,746              68,207
     General and administrative                     41,469            37,931                       85,471              70,637
                                           ---------------     -------------              ---------------     ---------------

       Total costs and expenses                    341,777           394,603                      649,421             776,749
                                           ---------------     -------------              ---------------     ---------------

Net income                                 $        91,709     $      21,260              $       203,125     $       297,127
                                           ===============     =============              ===============     ===============

Net income per Limited
   Partnership Unit                        $          4.35     $        0.52              $          9.54     $         13.32
                                           ===============     =============              ===============     ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

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

                            Statements of Cash Flows
                     Six Months Ended June 30, 1997 and 1996
                                   (Unaudited)

                                                                                          1997                     1996
                                                                                          ----                     ----

<S>                                                                                  <C>                      <C>            
Cash flows from operating activities:
   Net income                                                                        $      203,125           $       297,127
                                                                                     --------------           ---------------

   Adjustments  to  reconcile  net  income  to net cash  provided
     by  operating  activities:
       Depreciation                                                                         514,509                   598,840
       (Reversal of) provision for doubtful accounts                                        (43,499)                   11,244
       Net gain on sale of equipment                                                        (40,556)                 (229,348)
       Net decrease (increase) in current assets                                            107,751                   (39,583)
       Net decrease in current liabilities                                                  (46,748)                   (6,212)
                                                                                     --------------           ---------------

         Total adjustments                                                                  491,457                   334,941
                                                                                     --------------           ---------------

         Net cash provided by operating activities                                          694,582                   632,068
                                                                                     --------------           ---------------

Cash flows from investing activities:
   Purchase of investment property                                                         (703,107)                        -
   Proceeds from sales of investment property                                                63,397                   318,861
                                                                                     --------------           ---------------

         Net cash (used in) provided by investing activities                               (639,710)                  318,861
                                                                                     --------------           ---------------

Cash flows from financing activities:
   Proceeds from borrowings on long-term debt                                               412,946                         -
   Principal payments on long-term debt                                                    (263,291)                 (229,151)
   Cash distributions to partners                                                          (212,474)                 (424,947)
                                                                                     --------------           ---------------

         Net cash used in financing activities                                              (62,819)                 (654,098)

Net (decrease) increase in cash and cash equivalents                                         (7,947)                  296,831

Cash and cash equivalents at beginning of period                                            265,199                   245,755
                                                                                     --------------           ---------------

Cash and cash equivalents at end of period                                           $      257,252           $       542,586
                                                                                     ==============           ===============

Supplemental cash flow information:
   Interest paid during the period                                                   $       31,194           $        27,821
                                                                                     ==============           ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


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

                          Notes to Financial Statements
                Six Months Ended June 30, 1997 and June 30, 1996
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing financial statements of Wellesley Lease Income Limited Partnership
III-D (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 June 30, 1997 and December 31, 1996, the
allowance  for doubtful  accounts  included in rents  receivable  was $2,707 and
$51,713,  respectively,  and  $7,210 and $1,703  included  in sales  receivable,
respectively.

(3)   Investment Property

At June 30, 1997, the  Partnership  owned computer  equipment with a depreciated
cost basis of  $2,131,954,  subject to  existing  leases  and  equipment  with a
depreciated cost basis of $53,718 in inventory,  awaiting  re-lease or sale. All
purchases of computer  equipment are subject to a 3% acquisition fee paid to the
General Partner.

(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 six months ended
June 30 are as follows:

<TABLE>
<CAPTION>
                                                           1997                 1996
                                                           ----                 ----

<S>                                                   <C>                   <C>         
Equipment acquisition fees                            $     20,479          $          -
Management fees                                             61,746                68,207
Reimbursable expenses paid                                  84,182                77,809
                                                      ------------          ------------

                                                      $    166,407          $    146,016
                                                      ============          ============
</TABLE>



<PAGE>


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

                          Notes to Financial Statements
                Six Months Ended June 30, 1997 and June 30, 1996
                                   (Unaudited)

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)   Long-term Debt

Long-term  debt at June 30, 1997  consists of two loans  totaling  $71,055  from
Union Chelsea  National  Bank each with an interest rate of 9.00%,  one loan for
$17,420 from CIT Group/Equipment  Financing,  Incorporated with an interest rate
of 14.17%,  one installment note from Pullman Capital  Corporation in the amount
of $56,756 with an interest rate of 8.75%, and eighteen loans totaling  $800,349
from  Liberty  Bank,  one  bearing  interest at 8.50%,  one bearing  interest at
11.00%,  two bearing interest at 7.90%, five bearing interest at 8.25%, and nine
remaining loans bearing  interest at 10.50%.  All loans are non-recourse and are
collateralized by equipment on the respective leases with a total net book value
of $925,720 and assignment of the related leases.

Maturities on long-term debt are as follows:

                                1997                   $      346,477
                                1998                          451,599
                                1999                          143,557
                                2000                            3,947
                                                       --------------

                                                       $      945,580
                                                       ==============


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (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
and six months ended June 30, 1997 in  comparison to the same periods ended June
30, 1996.

The  Partnership  realized  net income of $91,709 and  $21,260 for the  quarters
ended June 30, 1997 and 1996,  respectively.  Rental income increased $37,838 or
10% in 1997. The increase in rental income between the two periods is due to new
equipment  acquisitions as a result of the extension of the reinvestment  period
and due to a $45,000  adjustment to rental income for the quarter ended June 30,
1996. Three sales of equipment previously on lease to AT&T, Chrysler Corporation
and Troll  Associates,  having a sale date prior to April 1, 1996, were executed
during the second quarter ended June 30, 1996.  Interest  income  decreased as a
result of lower cash balances held during the current  quarter.  The decrease in
net gain on the sale of equipment in the current  quarter is primarily  due to a
smaller number of equipment sales.

Total costs and expenses decreased $52,826 or 13% in 1997. The decrease in costs
and  expenses is mainly due to the $23,920  reduction  in  depreciation  expense
during the current quarter in comparison to the same period in 1996. The decline
in depreciation expense is primarily due to a portion of the equipment portfolio
becoming fully  depreciated.  Another element impacting the decline in costs and
expenses is the  $17,960  reversal  of  provision  for  doubtful  accounts.  The
reversal is a result of the successful  collection  efforts of delinquent  rents
receivable.  Interest  expense  increased  $2,860 as a result  of the  continued
paydown of long-term debt. Management fees decreased in correlation to an actual
decline in rental income,  taking into  consideration the $45,000  adjustment to
rental income in 1996. General and  administrative  expenses increased $3,538. A
major factor contributing to this increase is that the reimbursable salaries and
expenses of the  partnership  accounting and reporting  personnel of the General
Partner are being  allocated  over a diminishing  number of  partnerships  under
management.

The Partnership  realized net income of $203,125 and $297,127 for the six months
ended June 30, 1997 and 1996, respectively. The $28,330 or 3% decrease in rental
income  is  attributed  to  lower  rental  rates  obtained  on  equipment  lease
extensions  and  remarketings  resulting  after the initial  lease term expires.
Interest  income  decreased  from 1996 as a result of lower cash  balances  held
during  the  current  six  month  period.  The  decrease  in net gain on sale of
equipment in 1997 is due to a smaller  number of equipment  sales  carrying high
net book values.



<PAGE>


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

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

Total costs and expenses decreased $127,328 or 16% during the six month periods.
The  decrease in costs and  expenses is mainly due to the $84,331 or 14% decline
in  depreciation  expense.  As  discussed  in the quarter  analysis  above,  the
reduction in depreciation  expense is due to a portion of the initial  equipment
portfolio becoming fully  depreciated.  Another element impacting the decline in
costs and expenses is the $43,499  reversal of provision for doubtful  accounts.
The reversal is a result of successful  collection  efforts of delinquent  rents
receivable  in 1997.  Interest  expense  increased  $3,373 due to the  continued
paydown of  long-term  debt  during the six month  period  ended June 30,  1997.
Management  fees  decreased  between  the six month  periods in  relation to the
decline in rental income. General and administrative  expenses increased $14,834
or 21% mainly due to an increase in the  allocable  salaries of the  partnership
accounting  and reporting  personnel of the General  partner  during the current
year.

The Partnership  recorded net income per Limited  Partnership  Unit of $4.35 and
$0.52 for the quarters ended June 30, 1997 and 1996, respectively, and $9.54 and
$13.32 for the six month periods ended June 30, 1997 and 1996, respectively. The
allocation  for the six months  ended  June 30,  1997  includes a cost  recovery
allocation of profit and loss among the General and Limited Partners.  This cost
recovery allocation is required to maintain capital accounts consistent with the
distribution  provisions of the Partnership  Agreement.  In certain periods, the
cost  recovery of profit and loss may result in an allocation of net loss to the
Limited Partners in instances when the Partnership's  operations were profitable
for the period.

Liquidity and Capital Resources

For the quarter ended June 30, 1997,  rental  revenue  generated  from operating
leases and sales  proceeds  generated  from  equipment  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.

Rental income will continue 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.  To the extent that  future  cash flows  should be
insufficient  to meet the  Partnership's  operating  expenses  and  liabilities,
additional funds could be obtained  through the sale of equipment,  or through a
reduction in the rate of cash  distributions.  Future rental  revenues amount to
$2,617,517 and are to be received over the next four years.



<PAGE>


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

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

The  Partnership's  investing  activities for the quarter  resulted in equipment
purchases  of $703,107  and  equipment  sales with a  depreciated  cost basis of
$21,758, generating $63,397 in proceeds. Included in equipment sales is a $1,083
loss which was charged  against the reserve,  initially set up in a prior period
to account for estimated  losses on the ultimate  disposition of equipment.  The
Partnership has capital expenditure commitments of approximately $100,000, which
are expected to be consummated during the third quarter of 1997. The Partnership
will not purchase  equipment in the future,  except as described  above,  as the
Partnership reached the end of its extended reinvestment period in June, 1997.

The Partnership's  financing  activities resulted in proceeds from borrowings on
long-term debt of $412,946. The Partnership's activities also included a paydown
on  long-term  debt during 1997 of  $263,291.  The  Partnership  will payoff its
remaining  long-term debt of $945,580 by 2000.  Total  long-term debt assumed by
the Partnership from inception is $7,700,219, for a total leverage of 25%.

Cash  distributions  are  currently  at  an  annual  level  of  6%  per  Limited
Partnership  Unit, or $7.50 per Limited  Partnership  Unit on a quarterly basis.
For  the  quarter  ended  June  30,  1997,  the  Partnership   declared  a  cash
distribution of $159,356, of which $7,968 was distributed to the General Partner
and $151,388 was distributed to the Limited  Partners.  The distribution will be
made on August 29, 1997. The  Partnership  expects to continue paying at or near
this level in the future.  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-D
                      (A Massachusetts Limited Partnership)

                    Computer Equipment Portfolio (Unaudited)
                                  June 30, 1997

Lessee

American Hard Cider, Incorporated
Baylor Health Network, Incorporated
Caterpillar, Incorporated
Cerulean Technology, Incorporated
Coulter Leasing Corporation
Direct Cable TV, Incorporated
Evare, Limited Liability Corporation
Faxnet, Incorporated
George Melhado and Company
H.J. Meyers & Company, Incorporated
Hughes Aircraft Corporation
Invetech Company
J. Walter Thompson, U.S.A., Incorporated
JumboSports Incorporated
Magnavox  Electronic  Systems  Company,  Incorporated
Merchants  Association of Florida,  Incorporated
Mercury Marine,  Division of Brunswick  Corporation
NYNEX National,  Incorporated
ON Technology  Corporation
Owens - Corning  Fiberglass Corporation
The Internet Access Company, Incorporated
USG Corporation

Equipment Description                                 Acquisition Price

Computer peripherals                                   $      2,374,052
Processors & upgrades                                         2,556,672
Other                                                         1,156,590
                                                       ----------------

                                                       $      6,087,314
                                                       ================

<PAGE>


                           PART II. OTHER INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (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 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-D
(Registrant)

By:     Wellesley Leasing Partnership,
        its General Partner

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


Date:   August 13, 1997

By:     Arthur P. Beecher,
        President