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 September 30, 1995                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 September 30, 1995 and December 31, 1994                                         3

                    Statements of Operations For the Quarters Ended
                           September 30, 1995 and 1994 and the Nine Months Ended
                           September 30, 1995 and 1994                                                                    4

                    Statements of Cash Flows For the Nine Months Ended
                           September 30, 1995 and 1994                                                                    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)
                                                                                       9/30/95                12/31/94
Investment property, at cost (note 3):
<S>                                                                               <C>                     <C>            
   Computer equipment                                                             $     8,367,083         $     7,469,559
     Less accumulated depreciation                                                      5,379,001               4,853,270
                                                                                        ---------               ---------
       Investment property, net                                                         2,988,082               2,616,289

Cash and cash equivalents                                                                 451,381                 592,377
Rents receivable, net (note 2)                                                            173,982                  58,471
Sales receivable, net (note 2)                                                                  -                   4,940
Accounts receivable - affiliates (note 4)                                                       -                  12,332
                                                                                          -------                  ------

     Total assets                                                                 $     3,613,445         $     3,284,409
                                                                                  =     =========         =     =========

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 6)                                     $       421,392         $       278,737
   Accounts payable and accrued expenses - affiliates (note 4)                            131,167                  48,297
   Accounts payable and accrued expenses                                                   35,452                  89,863
   Unearned rental income                                                                  13,584                  31,494
   Distribution payable                                                                    23,904                       -
   Notes payable - affiliates (note 5)                                                    200,000                       -
   Long-term debt, less current portion (note 6)                                          207,626                  88,008
                                                                                          -------                  ------

     Total liabilities                                                                  1,033,125                 536,399
                                                                                        ---------                 -------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                519,826                 479,918
     Cumulative cash distributions                                                       (524,294)               (487,110)
                                                                                         --------                -------- 
                                                                                           (3,468)                 (6,192)
                                                                                           ------                  ------ 
   Limited Partners (20,185 Units):
     Capital contribution, net of offering costs                                        8,987,039               8,987,039
     Cumulative net income                                                              3,558,050               3,021,988
     Cumulative cash distributions                                                     (9,961,301)             (9,254,825)
                                                                                       ----------              ---------- 
                                                                                        2,583,788               2,754,202
                                                                                        ---------               ---------
     Total partners' equity                                                             2,580,320               2,748,010
                                                                                        ---------               ---------

     Total liabilities and partners' equity                                       $     3,613,445         $     3,284,409
                                                                                  =     =========         =     =========
</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                         Nine Months Ended
                                                      September 30,                           September 30,
                                                      -------------                           -------------
                                                 1995              1994                1995                1994
                                                 ----              ----                ----                ----
Revenue:
<S>                                        <C>                 <C>                <C>                <C>            
   Rental income                           $       685,802     $     638,072      $    1,914,439     $     1,773,451
   Interest income                                   4,134            11,734              12,577              26,885
   Net (loss) gain on sale
     of equipment                                  (10,144)           24,672               1,110             344,646
                                                   -------            ------               -----             -------

       Total revenue                               679,792           674,478           1,928,126           2,144,982
                                                   -------           -------           ---------           ---------

Costs and expenses:
   Depreciation                                    394,084           428,167           1,127,687           1,154,646
   Interest                                         17,249             4,873              30,418               8,851
   Related party expenses (note 4):
     Management fees                                47,454            37,705             125,859             112,987
     General and administrative                     28,324            26,161              88,540              75,716
   (Reversal of) provision for
     doubtful accounts                                   -            11,465             (20,348)             11,465
                                                    ------            ------             -------              ------

       Total costs and expenses                    487,111           508,371           1,352,156           1,363,665
                                                   -------           -------           ---------           ---------

Net income                                 $       192,681     $     166,107      $      575,970     $       781,317
                                           =       =======     =     =======      =      =======     =       =======

Net income per Limited
Partnership Unit                           $          8.96     $        7.77      $        26.56     $         36.72
                                           =          ====     =        ====      =        =====     =         =====
</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
             For the Nine Months Ended September 30, 1995 and 1994
                                  (Unaudited)

                                                                                           1995                     1994
                                                                                           ----                     ----
Cash flows from operating activities:
<S>                                                                                  <C>                      <C>            
   Net income                                                                        $      575,970           $       781,317
                                                                                     -      -------           -       -------

   Adjustments  to  reconcile  net  income  to net cash  provided  by  operating
     activities:
       Depreciation                                                                       1,127,687                 1,154,646
       (Reversal of) provision for doubtful accounts                                        (20,348)                   11,465
       Net gain on sale of equipment                                                         (1,110)                 (344,646)
       Net (increase) decrease in current assets                                            (77,891)                   64,176
       Net increase (decrease) in current liabilities                                        10,549                   (57,102)
                                                                                             ------                   ------- 

         Total adjustments                                                                1,038,887                   828,539
                                                                                          ---------                   -------

         Net cash provided by operating activities                                        1,614,857                 1,609,856
                                                                                          ---------                 ---------

Cash flows from investing activities:
   Purchase of investment property                                                       (1,601,412)               (1,222,451)
   Proceeds from sales of investment property                                               103,042                   623,998
                                                                                            -------                   -------

         Net cash used in investing activities                                           (1,498,370)                 (598,453)
                                                                                         ----------                  -------- 

Cash flows from financing activities:
   Proceeds from borrowings on notes payable - affiliates                                   339,047                         -
   Principal payments on notes payable - affiliates                                        (139,047)                        -
   Proceeds from borrowings on long-term debt                                               643,906                   266,596
   Principal payments on long-term debt                                                    (381,633)                 (194,732)
   Cash distributions to partners                                                          (719,756)                 (796,778)
                                                                                           --------                  -------- 

         Net cash used in financing activities                                             (257,483)                 (724,914)
                                                                                           --------                  -------- 

Net (decrease) increase in cash and cash equivalents                                       (140,996)                  286,489

Cash and cash equivalents at beginning of period                                            592,377                   621,024
                                                                                            -------                   -------

Cash and cash equivalents at end of period                                           $      451,381           $       907,513
                                                                                     =      =======           =       =======

Supplemental cash flow information:
   Interest paid during the period                                                   $       31,496           $         9,866
                                                                                     =       ======           =         =====
</TABLE>

                See accompanying notes to financial statements.


<PAGE>


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

                         Notes to Financial Statements
                  For the Nine Months ended September 30, 1995
                                  (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, 1994.

(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 September 30, 1995 and December 31, 1994,
the allowance for doubtful accounts included in rents receivable was $39,170 and
$55,208,   respectively,  and  $0  and  $4,310  included  in  sales  receivable,
respectively.

Reclassifications

Certain prior year financial  statement items have been  reclassified to conform
with the current year's financial statement presentation.

(3)   Investment Property

At  September  30,  1995,  the  Partnership  owned  computer  equipment  with  a
depreciated cost basis of $2,988,082  subject to existing leases.  All purchases
of computer  equipment are subject to a 3%  acquisition  fee paid to the General
Partner.



<PAGE>


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

                         Notes to Financial Statements
                                  (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 years  ended
September 30, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>

                                                     1995                        1994
                                                     ----                        ----

<S>                                              <C>                        <C>         
Equipment acquisition fees                       $     46,643               $     35,370
Management fees                                       125,859                    112,987
Reimbursable expenses paid                             89,336                     71,294
                                                       ------                     ------

                                                 $    261,838               $    219,651
                                                 =    =======               =    =======
</TABLE>

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)   Notes Payable-Affiliates

Notes  payable-affiliates  at September 30, 1995,  consists of one  non-recourse
promissory note payable to TLP Leasing Programs, Inc. in the amount of $200,000,
bearing interest at the rate of 8.75%. The note payable matures in 1996.

(6)   Long-term Debt

Long-term  debt at  September  30, 1995  consists  of one loan for $16,211  from
Randolph  Computer  Company with an interest rate of 5.75%, one loan for $94,891
from  Relational  Funding  with an interest  rate of 8.15%,  two loans  totaling
$224,894 from Union  Chelsea  National Bank each with an interest rate of 9.00%,
one loan for $56,078 from CIS  Group/Equipment  Financing,  Incorporated with an
interest  rate of  14.17%,  and seven  installment  notes from  Pullman  Capital
Corporation totaling $236,944, all with an interest rate of 8.00%. All loans are
non-recourse and are collateralized by equipment on the respective leases with a
total net book value of $1,122,243 and assignment of the related leases.

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
<S>                                  <C>                    <C>           
                                     1995                   $      166,178
                                     1996                          292,364
                                     1997                          141,602
                                     1998                           28,874
                                                                    ------

                                                            $      629,018
</TABLE>



<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 nine month periods  ended  September 30, 1995 compared to the same period in
1994.

The  Partnership  realized  net income of $192,681 and $166,107 for the quarters
ended  September  30, 1995 and 1994,  respectively.  Rental  income on operating
leases increased $47,730 or 7% between the three month periods.  The increase in
rental  income  can  be  attributed  to  rents   resulting  from  new  equipment
acquisitions totaling $1,601,412 and $1,222,451, in 1995 and 1994, respectively.
Interest  income  decreased as a result of lower average  short-term  investment
balances held during the current  quarter.  The decrease in net gain on the sale
of equipment between the three month periods is primarily due to fewer equipment
sales in the third quarter of 1995.

Total  costs and  expenses  decreased  $21,260  or 4%  between  the three  month
periods.  The  decrease  in costs and  expenses  is  primarily a result of lower
depreciation  expense.  Depreciation expense decreased due to a large portion of
the  equipment   portfolio   becoming  fully   depreciated.   Also  included  in
depreciation  expense for the quarter ended September 30, 1995 is a provision of
$10,000 for estimated losses on the ultimate disposition of equipment.  Interest
expense  increased $12,376 between the three month periods due to the payoff and
continued paydown of the notes payable-affiliates and long-term debt. Management
fees have  increased due to the increase in rental  income on operating  leases.
General and  administrative  expenses  increased with the overall rise in rental
income. The third quarter of 1994 reflected a provision for doubtful accounts of
$11,465 to reserve for uncollectible accounts.

The Partnership  realized net income of $575,970 and $781,317 for the nine month
periods  ended  September  30,  1995 and 1994,  respectively.  Rental  income on
operating leases increased  $140,988 or 8%. As discussed in the quarter analysis
above,  the  increase in rental  income is directly  related to the  significant
amount of equipment  acquisitions in 1994 and 1995.  Interest  income  decreased
$14,308 due to the  Partnership  carrying  lower average  short-term  investment
balances  during  1995.  The  decrease  in net  gain  on sale  of  equipment  is
attributed to fewer  equipment sales in 1995. The large 1994 net gain on sale of
equipment is due to the large number of  equipment  sales of equipment  carrying
low net book values.

Total costs and expenses decreased $11,509 or 1% between the nine month periods.
The decrease in costs and expenses is primarily the result of lower depreciation
expense along with the current year reversal of provision for doubtful accounts.
As discussed above, depreciation expense decreased due to a large portion of the
equipment  portfolio becoming fully  depreciated.  Also included in depreciation
expense for the nine months ended  September 30, 1995 is a provision for $10,000
for estimated losses on the ultimate disposition of equipment.  Interest expense
increased  $21,567 due to the payoff and  continued  paydown on the  installment
notes  payable-affiliates  and long-term  debt.  Management  fees have increased
along with the increase in rental income,  as mentioned in the quarter  analysis
above.  Correspondingly,   general  and  administrative  expenses  increased  in
relation to the overall  increase  rental income.  The reversal of provision for
doubtful  accounts  of  $20,348  is  due to  successful  collection  efforts  on
delinquent accounts in 1995.



<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)

During the quarter ended  September 30, 1995 and the nine months ended September
30, 1995, the Partnership  allocated  profits and losses  resulting in $8.96 and
$26.56 per Limited Partnership Unit,  respectively.  The allocation for the nine
months ended  September 30, 1995  includes a cost recovery  allocation of profit
and loss among the General and Limited  Partners  which results in an allocation
of net loss to the Limited  Partners in the first nine months of 1995. 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 the
Limited Partners in instances when the Partnership's  operations were profitable
for the period.

Liquidity and Capital Resources

For the nine months ended September 30, 1995,  rental revenue generated from the
operating  leases was the primary  source of funds for the  Partnership.  As the
equipment leases terminate, the General Partner determines if the equipment will
be extended to the same lessee,  remarketed to another lessee,  or if it is less
marketable, sold. This decision is made upon analyzing which option would derive
the most favorable results.

Rental  income  will begin to  decrease  in 1995 due to two  factors.  The first
factor is the rate obtained when the original  leases expire and are  remarketed
at a lower rate. Typically the remarketed rates are lower due to the decrease in
useful life of the equipment.  Secondly,  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 and notes  payable-affiliates  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 $2,985,523 and are expected to be received over the next four
years.

In the first nine months,  the Partnership's  investing  activities  resulted in
equipment  purchases of $1,601,412 and equipment  sales with a depreciated  cost
basis  of  $113,631,  generating  $103,042  in  proceeds.  Associated  with  the
equipment sales were $11,699 of loss charge offs against the reserve,  initially
set up in prior  periods for  estimated  losses on the ultimate  disposition  of
equipment.  The Partnership has no material capital expenditure  commitments and
will not purchase equipment in the future as the Partnership has reached the end
of its reinvestment period.

The Partnership's financing activities resulted in the paydown on long-term debt
in the amount of $381,633 and  proceeds  from  borrowing  on  long-term  debt of
$643,906 for the nine months ended  September  30, 1995.  The  Partnership  will
payoff its remaining  long-term debt of $629,018 by 1998.  Total  long-term debt
assumed by the Partnership from inception is $6,529,065, for a total leverage of
23%. The Partnership's  financing  activities also resulted in proceeds from the
borrowing  on notes  payable -  affiliates  in the  amount of  $339,047  and the
paydown on the  installment  note  during  the first nine  months of 1995 in the
amount of $139,047. Such notes payable - affiliates will be paid off in 1996.



<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)

Cash  distributions  are  currently  at  an  annual  level  of  8%  per  Limited
Partnership  Unit or $10.00 per Limited  Partnership  Unit on a quarterly basis.
For the quarter  ended  September  30,  1995,  the  Partnership  declared a cash
distribution of $212,474,  of which $10,624 was allocated to the General Partner
and $201,850 was allocated to the Limited  Partners.  The  distribution  will be
made on November 28, 1995. 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 a  material  impact  in  future
periods.



<PAGE>


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

                    Computer Equipment Portfolio (Unaudited)

Lessee

American Telephone & Telegraph, Incorporated
Applied Magnetics Corporation
Caterpillar, Incorporated
Champs Software, Incorporated
Chrysler Motors Corporation
Coulter Leasing Corporation
Delphi Internet Services Corporation
Exxon Company, U.S.A.
George Melhado and Company
H.J. Meyers & Company, Incorporated
Halliburton Company, Incorporated
Hughes Aircraft Corporation
Integrated Systems Technology Corporation
Invetech Company
J. Walter Thompson, U.S.A., Incorporated
Magnavox  Electronic Systems Company,  Incorporated  Maryland Casualty Insurance
Company,  Incorporated  Merchants  Association of Florida,  Incorporated Mercury
Marine,  Division of Brunswick  Corporation  Mobil Oil Corporation New York Life
Insurance Company NYNEX National, Incorporated ON Technology Corporation Owens -
Corning Fiberglass Corporation Packard Hughes Interconnect, Incorporated Simmons
Market Research Bureau, Incorporated Thomas James Associates, Incorporated Troll
Associates, Incorporated Western Atlas Company, Incorporated Xerox Corporation

<TABLE>
<CAPTION>
Equipment Description                                                                Acquisition Price

<S>                                                                                    <C>            
Computer peripherals                                                                   $     3,263,163
Processors & upgrades                                                                        3,514,175
Other                                                                                        1,589,745
                                                                                             ---------

                                                                                       $     8,367,083
                                                                                       =     =========
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                           PART II. OTHER INFORMATION

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


<S>            <C>
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
</TABLE>


<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

By:  Arthur P. Beecher
     President


Date: November 14, 1995
      -----------------