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, 1999                     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.

Part I.    FINANCIAL INFORMATION

<S>           <C>                                                                                    <C>
              Financial Statements

                    Balance Sheets as of March 31, 1999 and December 31, 1998                        3

                    Statements of Operations
                          Quarters Ended March 31, 1999 and 1998                                     4


                    Statements of Cash Flows
                          Quarters Ended March 31, 1999 and 1998                                     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
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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)
                                                                                     3/31/99                 12/31/98
                                                                                 ----------------        ----------------
<S>                                                                              <C>                     <C>             
Investment property, at cost (note 3):
   Computer equipment                                                            $      3,461,593        $      3,589,735
     Less accumulated depreciation                                                      2,613,841               2,575,703
                                                                                 ----------------        ----------------
       Investment property, net                                                           847,752               1,014,032

Cash and cash equivalents                                                                 324,133                 403,150
Rents receivable, net (note 2)                                                             26,871                   5,483
Accounts receivable - affiliates                                                           10,800                  48,059
Other assets                                                                                4,323                   6,917
                                                                                 ----------------        ----------------

     Total assets                                                                $      1,213,879        $      1,477,641
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 5)                                    $        117,926        $        225,770
   Accounts payable and accrued expenses - affiliates (note 4)                             19,068                  23,637
   Accounts payable and accrued expenses                                                   34,766                  52,371
   Unearned rental revenue                                                                 23,586                  31,655
   Long-term debt, less current portion (note 5)                                                -                   3,947
                                                                                 ----------------        ----------------

     Total liabilities                                                                    195,346                 337,380
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                645,470                 637,502
     Cumulative cash distributions                                                       (646,470)               (638,502)
                                                                                 ----------------        ----------------
                                                                                                -                       -
                                                                                 ----------------        ----------------
   Limited Partners (20,185 units):
     Capital contribution, net of offering costs                                        8,987,039               8,987,039
     Cumulative net income                                                              4,314,079               4,284,420
     Cumulative cash distributions                                                    (12,282,585)            (12,131,198)
                                                                                 ----------------        ----------------
                                                                                        1,018,533               1,140,261
                                                                                 ----------------        ----------------
     Total partners' equity                                                             1,018,533               1,140,261
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $      1,213,879        $      1,477,641
                                                                                 ================        ================

                 See accompanying notes to financial statements.

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<TABLE>
<CAPTION>

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

                            Statements of Operations
                    Quarters Ended March 31, 1999 and 1998
                                   (Unaudited)


                                                                                     1999                 1998
                                                                                ---------------     ---------------

<S>                                                                             <C>                 <C>            
Revenue:
   Rental income                                                                $       262,561     $       466,849
   Interest income                                                                        3,180               2,906
   Net gain on sale
     of equipment                                                                         1,495              15,181
                                                                                ---------------     ---------------

       Total revenue                                                                    267,236             484,936
                                                                                ---------------     ---------------

Costs and expenses:
   Depreciation                                                                         164,880             238,010
   Provision for doubtful accounts                                                          514               7,855
   Interest                                                                               4,436              18,735
   Related party expenses (note 4):
     Management fees                                                                     17,825              34,707
     General and administrative                                                          41,954              54,140
                                                                                ---------------     ---------------

       Total costs and expenses                                                         229,609             353,447
                                                                                ---------------     ---------------

Net income                                                                      $        37,627     $       131,489
                                                                                ===============     ===============

Net income per Limited
   Partnership Unit                                                             $          1.47     $          6.12
                                                                                ===============     ===============

                 See accompanying notes to financial statements.
</TABLE>


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<TABLE>
<CAPTION>

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

                            Statements of Cash Flows
                     Quarters Ended March 31, 1999 and 1998
                                   (Unaudited)

                                                                                        1999                       1998
                                                                                     --------------           ---------------

<S>                                                                                  <C>                      <C>            
Cash flows from operating activities:
   Net income                                                                        $       37,627           $      131,489
                                                                                     --------------           --------------

   Adjustments  to  reconcile  net  income  to net cash
     provided  by  operating activities:
       Depreciation                                                                         164,880                  238,010
       Provision for doubtful accounts                                                          514                    7,855
       Net gain on sale of equipment                                                         (1,495)                 (15,181)
       Net decrease in current assets                                                        17,951                   22,803
       Net (decrease) increase in current liabilities                                       (30,243)                   2,987
                                                                                     --------------           --------------

         Total adjustments                                                                  151,607                  256,474
                                                                                     --------------           --------------

         Net cash provided by operating activities                                          189,234                  387,963
                                                                                     --------------           --------------

Cash flows from investing activities:
   Proceeds from sales of investment property                                                 2,895                   47,349
                                                                                     --------------           --------------

         Net cash provided by investing activities                                            2,895                   47,349
                                                                                     --------------           --------------

Cash flows from financing activities:
   Principal payments on long-term debt                                                    (111,791)                (194,909)
   Cash distributions to partners                                                          (159,355)                (159,355)
                                                                                     --------------           --------------

         Net cash used in financing activities                                             (271,146)                (354,264)

Net increase (decrease) in cash and cash equivalents                                        (79,017)                  81,048

Cash and cash equivalents at beginning of period                                            403,150                  253,590
                                                                                     --------------           --------------

Cash and cash equivalents at end of period                                           $      324,133           $      334,638
                                                                                     ==============           ==============

Supplemental cash flow information:
   Interest paid during the period                                                   $        4,436           $       18,735
                                                                                     ==============           ==============

                 See accompanying notes to financial statements.
</TABLE>


<PAGE>


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

                          Notes to Financial Statements
                Quarters Ended March 31, 1999 and March 31, 1998
                                   (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, 1998.

(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, 1999 and December 31, 1998, the
allowance  for doubtful  accounts  included in rents  receivable  was $1,452 and
$938, respectively.

(3)   Investment Property

At March 31, 1999, the Partnership  owned computer  equipment with a depreciated
cost basis of $847,752.  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  quarters  ended
March 31 are as follows:

                                           1999                 1998
                                           ----                 ----

Management fees                        $     17,825          $     34,707
Reimbursable expenses paid                   42,871                44,768
                                       ------------          ------------

                                       $     60,696          $     79,475
                                       ============          ============



<PAGE>


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

                          Notes to Financial Statements
                Quarters Ended March 31, 1999 and March 31, 1998
                                   (Unaudited)

Under the terms of the Partnership Agreement, the General Partner is 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, 1999  consists of thirteen loans totaling  $117,926.
All loans are non-recourse and are collateralized by equipment on the respective
leases  with  a  total  net book value of $263,381 and assignment of the related
leases.

Maturities on long-term debt are as follows:


             1999                   $      113,980
             2000                            3,946
                                    --------------

                                    $      117,926
                                    ==============


<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, 1999 in  comparison to the quarter ended March 31, 1998.

The  Partnership  realized  net income of $37,627  and $131,489 for the quarters
ended March 31, 1999 and 1998,  respectively.   Rental income decreased $204,288
or 44% in 1999.  The decrease is primarily due to lower rental rates obtained on
equipment lease extensions and remarketings resulting  after the  initial  lease
term expires. Interest income increased as a result of higher 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 1998.

Total costs and expenses decreased $123,838 or 35% in 1999. Depreciation expense
decreased due to a portion of the equipment potfolio becoming fully depreciated.
Interest   expense   decreased  due  to  continued  paydown  on  long-term debt.
Management fees decreased as a result of the decline in rental income.   General
and administrative expenses decreased $12,186  due to  successful  cost  cutting
efforts.

The Partnership  recorded net income per Limited  Partnership  Unit of $1.47 and
$6.12 for the quarters  ended  March  31,  1999  and  1998,  respectively.   The
allocation  for the quarter ended  March  31,  1999  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.

<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)


Liquidity and Capital Resources

For the quarter ended March 31, 1999,  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 begin 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.



<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
sales  with   a   depreciated   cost  basis  of  $13,272,  generating  $2,895 in
proceeds.  Included  in  equipment  sales  is  a  $11,873 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's  financing  activities  also  included a paydown on long-term
debt  during  1999  of  $111,791.   The  Partnership  will  payoff its remaining
long-term debt of $117,926 by 2000.

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 March 31,  1999,   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 May 28, 1999. 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, 1999

Lessees

American Hard Cider, Incorporated
Cerulean Technology, Incorporated
Direct Cable TV, Incorporated
Elron Software, Incorporated
Evare, Limited Liability Corporation
Faxnet, Incorporated
George Melhado and Company
Hughes Aircraft Corporation
J. Walter Thompson, U.S.A., Incorporated
The Internet Access Company, Incorporated
USG Corporation
VIP Calling, Incorporated

Equipment Description                                 Acquisition Price

Computers                                              $        701,009
Peripherals                                                   1,312,672
Other                                                         1,447,912
                                                       ----------------

                                                       $      3,461,593
                                                       ================

<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 13, 1999

By:     Arthur P. Beecher,
        President