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-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 12

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<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (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
                         Results of Operations                                                                   8 - 9

              Computer Equipment Portfolio                                                                       10

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                                        11

              Signature                                                                                          12
</TABLE>


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<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (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                                                            $      5,998,909        $      5,844,357
     Less accumulated depreciation                                                      3,875,359               3,824,442
                                                                                 ----------------        ----------------
       Investment property, net                                                         2,123,550               2,019,915

Cash and cash equivalents                                                                 150,683                 265,199
Rents receivable, net (note 2)                                                             18,740                  69,908
Sales receivable, net (note 2)                                                                  -                       -
Accounts receivable - affiliates (note 4)                                                  52,974                  84,022
Other assets                                                                                1,950                  12,779
                                                                                 ----------------        ----------------

     Total assets                                                                $      2,347,897        $      2,451,823
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 5)                                    $        527,701        $        550,139
   Accounts payable and accrued expenses - affiliates (note 4)                             55,856                  27,168
   Accounts payable and accrued expenses                                                   73,049                  93,581
   Unearned rental revenue                                                                 11,972                  15,125
   Long-term debt, less current portion (note 5)                                          180,675                 245,786
                                                                                 ----------------        ----------------

     Total liabilities                                                                    849,253                 931,799
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                585,710                 579,070
     Cumulative cash distributions                                                       (586,710)               (580,070)
                                                                                 ----------------        ----------------
                                                                                                -                       -
                                                                                 ----------------        ----------------
   Limited Partners (20,185 units):
     Capital contribution, net of offering costs                                        8,987,039               8,987,039
     Cumulative net income                                                              3,658,775               3,553,999
     Cumulative cash distributions                                                    (11,147,170)            (11,021,014)
                                                                                 ----------------        ----------------
                                                                                        1,498,644               1,520,024
                                                                                 ----------------        ----------------
     Total partners' equity                                                             1,498,644               1,520,024
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $      2,347,897        $      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
                     Quarters Ended March 31, 1997 and 1996
                                   (Unaudited)

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

<S>                                                                                  <C>                    <C>            
Revenue:
   Rental income                                                                     $      385,147         $       451,315
   Interest income                                                                            1,769                   2,438
   Net gain on sale of equipment                                                             32,144                 204,260
                                                                                     --------------         ---------------

       Total revenue                                                                        419,060                 658,013
                                                                                     --------------         ---------------

Costs and expenses:
   Depreciation                                                                             241,707                 302,118
   Reversal of provision for doubtful accounts                                              (25,539)                      -
   Interest                                                                                  15,976                  15,463
   Related party expenses (note 4):
     Management fees                                                                         31,498                  31,859
     General and administrative                                                              44,002                  32,706
                                                                                     --------------         ---------------

       Total costs and expenses                                                             307,644                 382,146
                                                                                     --------------         ---------------

Net income                                                                           $      111,416         $       275,867
                                                                                     ==============         ===============

Net income per Limited Partnership Unit                                              $         5.19         $         12.80
                                                                                     ==============         ===============
</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
                     Quarters Ended March 31, 1997 and 1996
                                   (Unaudited)

                                                                                                1997                1996
                                                                                                ----                ----

<S>                                                                                      <C>                  <C>             
Cash flows from operating activities:
   Net income                                                                            $        111,416     $        275,867
                                                                                         ----------------     ----------------

   Adjustments  to  reconcile  net  income  to net cash
     provided  by  operating  activities:
       Depreciation                                                                               241,707              302,118
       Reversal of provision for doubtful accounts                                                (25,539)                   -
       Net gain on sale of equipment                                                              (32,144)            (204,260)
       Net decrease (increase) in current assets                                                  118,584              (38,319)
       Net increase in current liabilities                                                          5,003                9,431
                                                                                         ----------------     ----------------

         Total adjustments                                                                        307,611               68,970
                                                                                         ----------------     ----------------

         Net cash provided by operating activities                                                419,027              344,837
                                                                                         ----------------     ----------------

Cash flows from investing activities:
   Purchase of investment property                                                               (352,515)                   -
   Proceeds from sales of investment property                                                      39,317              225,847
                                                                                         ----------------     ----------------

         Net cash (used in) provided by investing activities                                     (313,198)             225,847
                                                                                         ----------------     ----------------

Cash flows from financing activities:
   Proceeds from borrowings on long-term debt                                                      61,475                    -
   Principal payments on long-term debt                                                          (149,024)            (125,649)
   Cash distributions to partners                                                                (132,796)            (212,474)
                                                                                         ----------------     ----------------

         Net cash used in financing activities                                                   (220,345)            (338,123)
                                                                                         ----------------     ----------------

Net (decrease) increase in cash and cash equivalents                                             (114,516)             232,561

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

Cash and cash equivalents at end of period                                               $        150,683     $        478,316
                                                                                         ================     ================

Supplemental cash flow information:
   Interest paid during the period                                                       $         15,976     $         15,463
                                                                                         ================     ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (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-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 March 31, 1997 and December 31, 1996, the
allowance for doubtful  accounts  included in rents  receivable  was $26,938 and
$51,713,  respectively,  and  $939 and  $1,703  included  in  sales  receivable,
respectively.

(3)   Investment Property

At March 31, 1997, the Partnership  owned computer  equipment with a depreciated
cost basis of  $2,036,408,  subject to  existing  leases  and  equipment  with a
depreciated cost basis of $87,142 in inventory,  awaiting  re-lease or sale. All
purchases of computer  equipment are subject to a 3% acquisition fee paid to the
General Partner.


<PAGE>


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

Equipment acquisition fees                  $     10,267          $          -
Management fees                                   31,498                31,859
Reimbursable expenses paid                        43,896                37,661
                                            ------------          ------------

                                            $     85,661          $     69,520
                                            ============          ============

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 March 31, 1997  consists of two loans  totaling  $94,537 from
Union Chelsea  National  Bank each with an interest rate of 9.00%,  one loan for
$23,543 from CIT Group/Equipment  Financing,  Incorporated with an interest rate
of 14.17%,  one installment note from Pullman Capital  Corporation in the amount
of $61,475 with an interest rate of 8.75%, and nine loans totaling $528,821 from
Liberty Bank, one bearing interest at 7.75%, one bearing interest at 11.00%, two
bearing  interest  at 7.90% and the five  remaining  loans  bearing  interest at
8.25%.  All loans are non-recourse  and are  collateralized  by equipment on the
respective  leases with a total net book value of $715,843 and assignment of the
related leases.

Maturities on long-term debt are as follows:

                                     1997                   $      421,887
                                     1998                          255,139
                                     1999                           27,403
                                     2000                            3,947
                                                            --------------

                                                            $      708,376
                                                            ==============


<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
ended March 31, 1997 in comparison to the quarter ended March 31, 1996.

The  Partnership  realized  net income of $111,416 and $275,867 for the quarters
ended March 31, 1997 and 1996, respectively.  Rental income decreased $66,168 or
15% in 1997.  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  decrease  in the  overall  size  of the  equipment
portfolio.  Interest  income  decreased as a result of lower average  short-term
investment balances held during the current quarter. The decrease in net gain on
sale of equipment is the result of fewer equipment  sales  occurring  during the
current quarter versus the first quarter of 1996.

Total costs and expenses  decreased $74,502 or 19% in 1997. The most significant
factor  impacting  the  decrease in costs and  expenses  is the current  quarter
reduction in  depreciation  expense.  Depreciation  expense  decreased  due to a
portion of the equipment portfolio becoming fully depreciated.  During the first
quarter of 1997,  the  Partnership  was able to reverse a provision for doubtful
accounts due to successful  collection  efforts on delinquent rents  receivable.
Interest  expense  increased  due to the  continued  paydown of long-term  debt.
Management fees decreased with the decline in rental income on operating leases.
General  and   administrative   expenses   increased  $11,296.  A  major  factor
contributing  to this increase is that salaries and expenses of the  partnership
accounting  and  reporting   personnel  of  the  General   Partner,   which  are
reimbursable by the various  partnerships under management,  are being allocated
over a diminishing number of partnerships.

The Partnership  recorded net income per Limited  Partnership  Unit of $5.19 and
$12.80  for the  quarters  ended  March  31,  1997 and 1996,  respectively.  The
allocation  for the  quarter  ended  March 31,  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 March 31, 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.



<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)

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 a reduction
in the rate of cash  distributions.  Future rental revenues amount to $2,606,000
and are to be received over the next four years.

The  Partnership's  investing  activities for the quarter  resulted in equipment
purchases  of $352,515  and  equipment  sales with a  depreciated  cost basis of
$6,418,  generating  $39,317 in proceeds.  Included in equipment sales is a $755
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  will  purchase  equipment  in the  future  as the  Partnership  has
extended its reinvestment period through June, 1997.

The Partnership's  financing  activities resulted in proceeds from borrowings on
long-term debt of $61,475. The Partnership's  activities also included a paydown
on  long-term  debt during 1997 of  $149,024.  The  Partnership  will payoff its
remaining  long-term debt of $708,376 by 2000.  Total  long-term debt assumed by
the Partnership from inception is $7,348,748, for a total leverage of 24%.

Cash  distributions  are  currently  at  an  annual  level  of  3%  per  Limited
Partnership  Unit, or $3.75 per Limited  Partnership  Unit on a quarterly basis.
For  the  quarter  ended  March  31,  1997,  the  Partnership  declared  a  cash
distribution of $79,678,  of which $3,984 was distributed to the General Partner
and $75,694 was distributed to the Limited  Partners.  The distribution  will be
made on May 30, 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)
                                 March 31, 1997

Lessee

American Hard Cider, 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
Simmons Market Research  Bureau,  Incorporated
The Internet Access Company, Incorporated

Equipment Description                                 Acquisition Price

Computer peripherals                                   $      2,339,574
Processors & upgrades                                         2,519,542
Other                                                         1,139,793
                                                       ----------------

                                                       $      5,998,909
                                                       ================

<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:  May 12, 1997



By:    Arthur P. Beecher,
       President