UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q

                                   (Mark one)

              [x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1999
                                                --------------

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the transition period from          to
                                                     ----------   -------------

                         Commission File Number 0-17589
                                                -------

                            NTS-PROPERTIES VII, LTD.
                            ------------------------
             (Exact name of registrant as specified in its charter)

            Florida                                     61-1119232
            -------                                     ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   10172 Linn Station Road
   Louisville, Kentucky                                    40223
   --------------------                                    -----
(Address of principal executive                          (Zip Code)
offices)

Registrant's telephone number, including area code      (502) 426-4800
                                                        --------------
                              Not Applicable
                              --------------
           Former name, former address and former fiscal year,
                     if changed since last report

Indicate by check mark whether the registrant (l) 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,  and (2) has been subject to such filing  requirements
for the past 90 days.
                                                          YES  X     NO
                                                             -----      -----
Exhibit Index: See page 17
Total Pages: 18




<PAGE>


                       TABLE OF CONTENTS TABLE OF CONTENTS

                                                                        Pages
                                                                        -----

                                     PART I

Item 1.     Financial Statements

            Balance Sheets and Statement of Partners' Equity
              as of March 31, 1999 and December 31, 1998                  3

            Statements of Operations
              For the three months ended March 31, 1999 and 1998          4

            Statements of Cash Flows
              For the three months ended March 31, 1999 and 1998          5

            Notes To Financial Statements                               6-9

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                     10-16


                                     PART II

6.     Exhibits and Reports on Form 8-K                                 17

Signatures                                                              18



                                      - 2 -

<PAGE>



PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
<TABLE>
                            NTS-PROPERTIES VII, LTD.
                            ------------------------

                BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
                ------------------------------------------------

<CAPTION>
                                          As of                      As of
                                       March 31, 1999         December 31, 1998*
                                       --------------         ------------------
ASSETS
------
<S>                                    <C>                        <C>   

Cash and equivalents                   $    402,755               $    398,001
Cash and equivalents - restricted            45,681                    100,427
Investment securities                          --                       --
Accounts receivable                          13,495                     --
Land, buildings and amenities, net        9,942,861                 10,036,720
Other assets                                150,777                    130,828
                                        -----------                -----------

                                       $ 10,555,569               $ 10,665,976
                                        ===========                ===========

LIABILITIES AND PARTNERS' EQUITY
--------------------------------

Mortgages payable                      $  5,030,224               $  5,088,213
Accounts payable                             67,982                     57,319
Distributions payable                        28,573                     29,078
Security deposits                            29,201                     28,401
Other liabilities                            68,396                     41,265
                                        -----------                -----------

                                          5,224,376                  5,244,276

Partners' equity                          5,331,193                  5,421,700
                                        -----------                -----------

                                       $ 10,555,569               $ 10,665,976
                                        ===========                ===========
</TABLE>

<TABLE>
<CAPTION>
                                      Limited          General
                                      Partners         Partner           Total
                                      --------         -------           -----
<S>                                <C>              <C>            <C>    

PARTNERS' EQUITY
Capital contributions, net of
 offering costs                    $ 10,935,700     $       100    $ 10,935,800
Net income (loss) - prior years      (2,645,666)        (26,723)     (2,672,389)
Net (loss) - current year                (1,917)            (19)         (1,936)
Cash distributions declared to
 date                                (2,549,450)        (25,752)     (2,575,202)
Repurchase of limited
 partnership Units                     (355,080)           --          (355,080)
                                    ------------     -----------    ------------

Balances at March 31, 1999         $  5,383,587     $   (52,394)   $  5,331,193
                                    ============     ===========    ============
</TABLE>

*   Reference is made to the audited  financial  statements  in the Form 10-K as
    filed with the Commission on March 31, 1999.



                                      - 3 -

<PAGE>

<TABLE>
                            NTS-PROPERTIES VII, LTD.
                            ------------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------

<CAPTION>
                                                    Three Months Ended
                                                         March 31,
                                                         ---------

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

<S>                                        <C>                     <C>    

Revenues:
 Rental income                             $   465,661             $   462,189
 Interest and other income                       2,905                   6,784
                                            ----------              ----------
                                               468,566                 468,973
Expenses:
 Operating expenses                             95,417                  84,127
 Operating expenses - affiliated                66,935                  61,274
 Interest expense                               95,495                  98,878
 Management fees                                22,984                  24,200
 Real estate taxes                              27,136                  25,778
 Professional and administrative expenses       21,378                  11,536
 Professional and administrative expenses
  - affiliated                                  20,049                  22,282
 Depreciation and amortization                 121,108                 121,904
                                            ----------              ----------

                                               470,502                 449,979
                                            ----------              ----------

Net income (loss)                          $    (1,936)            $    18,994
                                            ==========              ==========

Net income (loss) allocated to the limited
 partners                                  $    (1,917)            $    18,804
                                            ==========              ==========

Net income (loss) per limited partnership
 unit                                      $     --                $       .03
                                            ==========              ==========

Weighted average number of limited
 partnership units                             573,514                 596,493
                                            ==========              ==========

</TABLE>


                                      - 4 -

<PAGE>



                            NTS-PROPERTIES VII, LTD.
                            ------------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

<TABLE>
<CAPTION>

                                                       Three Months Ended
                                                            March 31,
                                                            ---------

                                                     1999              1998
                                                  ------------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                               <C>               <C>  
Net income (loss)                                 $    (1,936)      $    18,994
Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
  Accrued interest on investment securities               --              1,349
  Depreciation and amortization                       121,108           121,904
  Changes in assets and liabilities:
   Cash and equivalents - restricted                   54,746            (1,566)
   Accounts receivable                                (18,966)             (441)
   Other assets                                       (16,259)           (9,848)
   Accounts payable                                    10,663             2,163
   Security deposits                                      800            (3,775)
   Other liabilities                                   27,132            25,777
                                                   -----------        ----------

  Net cash provided by operating activities           177,288           154,557
                                                   -----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities            (25,466)          (27,472)
Purchase of investment securities                         --           (300,000)
Maturity of investment securities                         --            536,392
                                                   -----------        ----------
  Net cash provided by (used in) investing
   activities                                         (25,466)          208,920
                                                   -----------        ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Cash and equivalents - restricted                         --             25,170
Principal payments on mortgages payable               (57,989)          (53,353)
Cash distributions                                    (29,079)          (60,426)
Repurchase of limited partnership Units               (60,000)          (25,170)
Addition to loan costs                                    --             (5,172)
                                                   -----------        ----------

  Net cash used in financing activities              (147,068)         (118,951)
                                                   -----------        ----------

  Net increase in cash and equivalents                  4,754           244,526

CASH AND EQUIVALENTS, beginning of period             398,001           164,714
                                                   -----------        ----------

CASH AND EQUIVALENTS, end of period               $   402,755       $   409,240
                                                   ===========        ==========

Interest paid on a cash basis                     $   129,057       $    99,789
                                                   ===========        ==========

</TABLE>


                                      - 5 -

<PAGE>



                            NTS-PROPERTIES VII, LTD.
                            ------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

The financial  statements included herein should be read in conjunction with the
Partnership's  1998 10-K as filed with the  Securities  Exchange  Commission  on
March 31, 1999. In the opinion of the General  Partner,  all  adjustments  (only
consisting of normal recurring  accruals) necessary for a fair presentation have
been made to the  accompanying  financial  statements for the three months ended
March 31, 1999 and 1998.

1.   Cash and Equivalents - Restricted
     ---------------------------------

     Cash and equivalents - restricted represents funds received for residential
     security  deposits,  funds which have been escrowed with mortgage companies
     for  property  taxes in  accordance  with the loan  agreements,  and  funds
     reserved  by the  partnership  for the  repurchase  of limited  partnership
     Units.

2.   Investment Securities
     ---------------------

     Investment  securities represent  investments in Certificates of Deposit or
     securities issued by the U.S. Government with initial maturities of greater
     than three months.  The  Partnership  sold no  securities  during the three
     months ended March 31, 1999 or during the twelve months ended  December 31,
     1998. The  Partnership  held no securities at March 31, 1999 or at December
     31, 1998.

3.   Mortgages Payable
     -----------------

     Mortgages payable consist of the following:


                                               March 31,            December 31,
                                                 1999                   1998
                                                 ----                   ----
Mortgage  payable to an insurance  
company,  bearing interest at a fixed 
rate of 7.37%, due October 15, 2012,
secured by land and buildings.               $ 3,959,749             $ 3,987,830

Mortgage payable to an insurance
company, bearing interest at a fixed
rate of 8.5%, due November 15, 2005,
secured by land and buildings.                 1,070,475               1,100,383
                                              ----------              ----------
                                             $ 5,030,224             $ 5,088,213
                                              ==========              ==========

Based  on  the  borrowing  rates  currently  available  to the  Partnership  for
mortgages with similar terms and average maturities, the fair value of long-term
debt is approximately $5,300,000.

4.   Interest Repurchase Reserve
     ---------------------------

     Pursuant  to  Section  16.4  of  the  Partnership's  Amended  and  Restated
     Agreement of Limited Partnership,  the Partnership  established an Interest
     Repurchase  Reserve. As of March 31, 1999 the Partnership has repurchased a
     total of 72,529 Units for $355,080,  at a price ranging from $4.00 to $6.00
     per Unit.  The Interest  Repurchase  Reserve was funded from cash reserves.
     The above offering price per Unit was established by the General Partner in
     its sole  discretion  and does not purport to represent  the fair market or
     liquidation  value  of the  Unit.  The  funds  remaining  in  the  Interest
     Repurchase  Reserve  at the  commencement  of the Tender  Offer  (discussed
     below)  were  returned  to   unrestricted   cash  for  utilization  in  the
     Partnership's operations.

                                      - 6 -

<PAGE>



     On December 7, 1998,  the  Partnership  and ORIG,  LLC, an affiliate of the
     Partnership,  commenced  a Tender  Offer to  purchase  up to  20,000 of the
     Partnership's  limited  partnership  Units at a price of  $6.00  per  Unit.
     Although  the  Partnership  and  ORIG,  LLC  believe  that  this  price  is
     appropriate,  the price of $6.00 per Unit may not equate to the fair market
     value or the liquidation value of the Unit, and is less than the book value
     per  Unit  as of the  date of the  Offering.  The  Offer  stated  that  the
     Partnership will purchase the first 10,000 Units tendered and will fund its
     purchases and its portion of the expenses,  associated  with  administering
     the Offer, from cash reserves. If more than 10,000 Units are tendered,  the
     Partnership and ORIG, LLC may choose to acquire the additional Units on the
     same terms. Otherwise, tendered Units will be purchased on a pro rata basis
     up to 20,000.  Units that are acquired by the Partnership  will be retired.
     Units  that are  acquired  by ORIG,  LLC  will be held by it.  The  General
     Partner,  NTS-Properties  Associates VII, does not intend to participate in
     the Tender Offer.

     Under the terms of the Offer,  the Offer  expired  on March 6, 1999.  As of
     that date, a total of 25,794 Units were tendered pursuant to the Offer. The
     Offerors  exercised  their  right  under the terms of the Offer to purchase
     more than 20,000 Units and all 25,794 Units  tendered  were accepted by the
     Offerors,  without proration.  The Partnership repurchased 10,000 Units and
     ORIG, LLC purchased 15,794 Units.

5.   Related Party Transactions
     --------------------------

     Property   management  fees  of  $22,984  and  $24,200  were  paid  to  NTS
     Development Company, an affiliate of the General Partner,  during the three
     months ended March 31, 1999 and 1998, respectively. The fee is paid monthly
     in an  amount  equal  to 5% of the  gross  revenues  from  the  residential
     properties  and 6% of the  gross  revenues  from  the  commercial  property
     pursuant to an agreement with the  Partnership.  The  Partnership  also was
     charged the following  amounts from NTS  Development  Company for the three
     months ended March 31, 1999 and 1998.  These  charges  include  items which
     have been expensed as operating  expenses  affiliated or  professional  and
     administrative  expenses - affiliated and items which have been capitalized
     as other assets or as land, buildings and amenities.


                                              1999                 1998
                                           ---------            ---------
            Leasing                        $  8,302             $  7,989
            Administrative                   25,630               28,213
            Property manager                 52,073               47,325
            Other                             1,527                   28
                                            -------              -------
                                           $ 87,532             $ 83,555
                                            =======              =======

6.   Segment Reporting
     -----------------

     The Partnership's  reportable  operating  segments include  Residential and
     Commercial real estate operations. The Residential operations represent the
     Partnership's   ownership  and  operating  results  relative  to  apartment
     complexes known as the Park at the Willows and Park Place  Apartments Phase
     II. The Commercial  operations  represent the  Partnership's  ownership and
     operating  results  relative to suburban  commercial  office space known as
     Blankenbaker Business Center 1A.









                                      - 7 -

<PAGE>



     The  financial  information  of the  operating  segments have been prepared
     using a management approach,  which is consistent with the basis and manner
     in which the Partnership's  management internally  disaggregates  financial
     information  for the  purposes of assisting  in making  internal  operating
     decisions.  The  Partnership  evaluates  performance  based on  stand-alone
     operating segment net income.


                                    Three Months ended March 31, 1999

                      Residential               Commercial                 TOTAL

        
Rental income        $    391,097             $     74,564           $   465,661
Other income                2,905                     --                   2,905
                      -----------              -----------            ----------

Total net revenues        394,002                   74,564               468,566
                      ===========              ===========            ==========

Operating expenses        151,273                   11,079               162,352
Interest Expense             --                     23,175                23,175
Management Fees            18,743                    4,241                22,984
Real Estate Taxes          22,710                    4,426                27,136
Depreciation Expense       94,971                   22,902               117,873
                      -----------              -----------            ----------

Net Income (Loss)         106,305                    8,741               115,046
                      ===========              ===========            ==========




                                     Three Months ended March 31, 1998

                      Residential               Commercial                 TOTAL
Rental income        $    387,753             $     74,436               462,189
Other income                  859                     --                     859
                      -----------              -----------            ----------

Total net revenues        388,612                   74,436               463,048
                      ===========              ===========            ==========

Operating expenses        132,413                   12,988               145,401
Interest Expense             --                     25,576                25,576
Management Fees            19,734                    4,466                24,200
Real Estate Taxes          20,437                    5,341                25,778
Depreciation Expense       96,234                   22,902               119,136
                      -----------              -----------            ----------

Net Income (Loss)         119,794                    3,163               122,957
                      ===========              ===========            ==========



                                      - 8 -

<PAGE>



A  reconciliation  of the totals  reported  for the  operating  segments  to the
applicable  line items in the  consolidated  financial  statements for the three
months ended March 31, 1999 and 1998 is necessary given amounts  recorded at the
Partnership  level and not  allocated to the operating  properties  for internal
reporting purposes.




                                                 1999                     1998
NET REVENUES
   

Total revenues for reportable segments     $   468,566              $   463,048
Other income for partnership                     8,742                    9,088
Eliminations                                    (8,742)                  (3,163)
                                            -----------              -----------

Total consolidated net revenues                468,566                  468,973
                                            ===========              ===========

INTEREST EXPENSE
Interest expense for reportable segments        23,175                   25,576
Interest expense for partnership                72,320                   73,302
                                            -----------              -----------

Total interest expense                          95,495                   98,878
                                            ===========              ===========

DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for
 reportable segments                           117,873                  119,136
Depreciation and amortization for
partnership                                      7,157                    6,690
Eliminations                                    (3,922)                  (3,922)
                                            -----------              -----------

Total depreciation and amortization            121,108                  121,904
                                            ===========              ===========

NET INCOME (LOSS)
Total net income (loss) for reportable
 segments                                      115,049                  122,957
Net income (loss) for partnership             (112,162)                (104,722)
Eliminations                                    (4,823)                     759
                                            -----------              -----------

Total net income (loss)                         (1,936)                  18,994
                                            ===========              ===========






                                      - 9 -

<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  is  structured in four major  sections.  The first section  provides
information related to occupancy levels and rental and other income generated by
the  Partnership's  properties.  The second analyzes  results of operations on a
consolidated  basis.  The final  sections  address  consolidated  cash flows and
financial  condition.  Discussion  of certain  market  risks and our  cautionary
statements also follow. Management's analysis should be read in conjunction with
the financial statements in Item 1 and the cautionary statements below.

Results of Operations
---------------------

The  occupancy  levels at the  Partnership's  properties  as of March 31 were as
follows:
                                               1999                 1998
                                               ----                 ----
Wholly-owned Properties
-----------------------

The Park at the Willows                         96%                  96%

Park Place Apartments Phase II                  83%                  80%

Property Owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties
------------------------------------
Plus Ltd. (Ownership % at March 31,
-----------------------------------
1999)
-----

Blankenbaker Business Center 1A (31%)          100%                 100%

The average  occupancy levels at the  Partnership's  properties during the three
months ended March 31 were as follows:

                                               1999                 1998
                                               ----                 ----
Wholly-owned Properties
-----------------------

The Park at the Willows (1)                     90%                  92%

Park Place Apartments Phase II (1)              82%                  84%

Property owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties
------------------------------------
Plus Ltd. (Ownership % at March 31,
-----------------------------------
1999)
-----

Blankenbaker Business Center 1A (31%)          100%                 100%

(1)    In the opinion of the General Partner of the Partnership, the decrease in
       average occupancy is only a temporary  fluctuation and does not represent
       a permanent downward occupancy trend.


                                     - 10 -


<PAGE>


Rental and other income generated by the Partnership's  properties for the three
months ended March 31, 1999 and 1998 was as follows:


                                                  1999                 1998
                                                ---------            --------
Wholly-owned Properties
-----------------------

The Park at the Willows                        $  91,361            $  85,033

Park Place Apartments Phase II                 $ 302,641            $ 303,579

Property owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties
------------------------------------
Plus Ltd. (Ownership % at March 31,
-----------------------------------
1999)
-----

Blankenbaker Business Center 1A (31%)(1)       $ 74,564             $  74,436

(1)    Revenues  shown  in this  table  represent  the  Partnership's  share  of
       revenues generated by Blankenbaker  Business Center 1A. The Partnership's
       percentage  interest in the joint venture was 31% during the three months
       ended March 31, 1999 and 1998.

If present  trends  continue,  the  Partnership  will be able to continue at its
current  level  of  operations  without  the need of any  additional  financing.
Current  occupancy  levels are considered  adequate to continue the operation of
the Partnership's properties. See the Liquidity and Capital Resources section of
Item 2 for a discussion  regarding the cash  requirements  of the  Partnership's
current debt financings.

The following is an analysis of material  changes in results of  operations  for
the periods  ending March 31, 1999 and 1998.  Items that did not have a material
impact on operations for the periods listed above have been eliminated from this
discussion.

Interest and other income includes  interest income from investments made by the
Partnership   with  cash   reserves.   Interest  and  other   income   decreased
approximately  $3,900  or 57% for the  three  months  ended  March  31,  1999 as
compared to the same period in 1998 as a result of decreased cash reserves being
available for investment.

Operating expenses increased  approximately  $11,300 or 13% for the three months
ended  March  31,  1999 as  compared  to the same  period in 1998 as a result of
increased parking lot repairs, building repairs and landscaping expenses at Park
Place Apartments Phase II and increased  furniture rental expense at the Park at
the Willows.  Operating  expenses at  Blankenbaker  Business  Center 1A remained
fairly constant for the three month period.

Operating  expenses - affiliated  increased  approximately  $5,700 or 9% for the
three  months  ended  March 31,  1999 as  compared  to the same  period in 1998,
primarily as a result of increased administrative costs at Park Place Apartments
Phase II, the Park at the Willows and Blankenbaker Business Center 1A. Operating
expenses - affiliated are expenses incurred for services  performed by employees
of NTS Development Company, an affiliate of the General Partner.

Professional and Administrative  expenses increased  approximately $9,800 or 85%
for the three months ended March 31, 1999 as compared to the same period in 1998
primarily as a result of increased  legal costs,  outside  accounting  costs and
printing costs incurred for the Tender Offer.





                                     - 11 -

<PAGE>



Professional and administrative  expenses - affiliated  decreased  approximately
$2,200 or 10% for the three  months ended March 31, 1999 as compared to the same
period in 1998,  primarily as a result of decreased  salary costs.  Professional
and  Administrative  expenses - affiliated  are  expenses  incurred for services
performed by employees of NTS Development  Company,  an affiliate of the General
Partner, on behalf of the Partnership.

Depreciation  is computed  using the  straight-line  method  over the  estimated
useful  lives of the assets  which are 10 - 30 years for land  improvements,  30
years for buildings, 5 - 30 years for building improvements and 5 - 30 years for
amenities.  The aggregate cost of the  Partnership's  properties for Federal tax
purposes is approximately $13,800,000.

Liquidity and Capital Resources
-------------------------------

The  majority  of  the  Partnership's   cash  flow  is  derived  from  operating
activities. Cash flows used in investing activities are for capital improvements
at the  Partnership's  properties.  These  improvements were funded by cash flow
from  operations.  Cash  flows  used in  investing  activities  are also for the
purchase of investment  securities.  As part of its cash management  activities,
the  Partnership has purchased  Certificates of Deposit or securities  issued by
the U.S.  Government  with  initial  maturities  of greater than three months to
improve  the  return on its  excess  cash  reserves.  The  Partnership  held the
securities  until  maturity.  Cash flows provided by investing  activities are a
result of the maturity of  investment  securities.  Cash flows used in financing
activities are for cash distributions,  principal payments on mortgages payable,
payment of loan costs and repurchases of limited  partnership  Units. Cash flows
used in financing  activities  also include cash which has been  reserved by the
Partnership for the repurchase of limited partnership Units through the Interest
Repurchase  Program or the Tender  Offer  (1998  only).  Cash flows  provided by
financing   activities   represent  an  increase  in  a  mortgage  payable.  The
Partnership does not expect any material changes in the mix and relative cost of
capital resources from those in 1998.

Cash flows provided by (used in):


                                                1999                   1998
                                                ----                   ----
Operating activities                        $  177,288             $  154,557
Investing activities                           (25,466)               208,920
Financing activities                          (147,068)              (118,951)
                                              ---------              ---------
Net increase (decrease) in cash and
 equivalents                                $    4,754             $  244,526
                                              =========              =========

Net cash provided by operating activities increased approximately $22,700 or 15%
as of March 31, 1999 as compared to the same period in 1998. The increase in net
cash  provided by operating  activities  was driven  primarily by an increase in
cash and equivalents - restricted.

Net cash  provided  by (used in)  investing  activities  totaled  ($25,466)  and
$208,920 as of March 31, 1999 and 1998,  respectively.  The decrease in net cash
provided by  investing  activities  as of March 31, 1999 as compared to the same
period in 1998 is primarily a result of not holding any investments in the three
months ended March 31, 1999.

Net cash used in  financing  activities  totaled  $147,068  and $118,951 for the
three  months  ended March 31, 1999 as compared to the same period in 1998.  The
increase in net cash used in financing activities was primarily due to decreased
net Interest Repurchase Reserve activity.




                                     - 12 -

<PAGE>



During the three months ended March 31, 1999 the Partnership used cash flow from
operations  and  cash on  hand to pay a 1%  (annualized)  cash  distribution  of
$28,573 (1999) and a 2% (annualized)  cash  distribution of $58,524 (1998).  The
annualized  distribution rate is calculated as a percent of the original capital
contribution. The limited partners received 99% and the General Partner received
1%  of  these  distributions.   The  primary  source  of  future  liquidity  and
distributions is expected to be derived from cash generated by the Partnership's
properties  after  adequate cash reserves are  established  for future  leasing,
renovations and tenant finish costs. It is anticipated  that the cash flows from
operations  and  cash  reserves  will be  sufficient  to meet  the  needs of the
Partnership.  Cash reserves  (which are  unrestricted  cash and  equivalents and
investment  securities as shown on the  Partnership's  balance sheet as of March
31) were $402,755 and $509,628 at March 31, 1999 and 1998, respectively.

Pursuant to Section 16.4 of the Partnership's  Amended and Restated Agreement of
Limited  Partnership,  the Partnership  has  established an Interest  Repurchase
Reserve.  As of March 31, 1999 the Partnership has repurchased a total of 72,529
Units for  $355,080,  at a price  ranging  from  $4.00 to $6.00  per  Unit.  The
Interest  Repurchase  Reserve was funded from cash reserves.  The above offering
price per Unit was established by the General Partner in its sole discretion and
does not purport to represent the fair market or liquidation  value of the Unit.
The funds remaining in the Interest  Repurchase  Reserve at the  commencement of
the Tender  Offer  (discussed  below)  were  returned to  unrestricted  cash for
utilization in the Partnership's operations.

On  December  7, 1998,  the  Partnership  and ORIG,  LLC,  an  affiliate  of the
Partnership,  commenced  a  Tender  Offer  to  purchase  up  to  20,000  of  the
Partnership's  limited  partnership Units at a price of $6.00 per Unit. Although
the Partnership and ORIG, LLC believe that this price is appropriate,  the price
of $6.00 per Unit may not  equate to the fair  market  value or the  liquidation
value of the Unit,  and is less  than the book  value per Unit as of the date of
the  Offering.  The Offer stated that the  Partnership  will  purchase the first
10,000  Units  tendered  and will  fund its  purchases  and its  portion  of the
expenses,  associated with administering the Offer, from cash reserves.  If more
than 10,000 Units are  tendered,  the  Partnership  and ORIG,  LLC may choose to
acquire the additional Units on the same terms.  Otherwise,  tendered Units will
be  purchased  on a pro rata basis up to 20,000.  Units that are acquired by the
Partnership  will be retired.  Units that are acquired by ORIG, LLC will be held
by it. The General  Partner,  NTS-Properties  Associates VII, does not intend to
participate in the Tender Offer.

Under the terms of the Offer,  the Offer  expired  on March 6, 1999.  As of that
date, a total of 25,794 Units were tendered  pursuant to the Offer. The Offerors
exercised  their right under the terms of the Offer to purchase more than 20,000
Units and all 25,794  Units  tendered  were  accepted by the  Offerors,  without
proration.  The  Partnership  repurchased  10,000 Units and ORIG,  LLC purchased
15,794 Units.



                                     - 13 -

<PAGE>



The table below  presents  that portion of the  distributions  that  represent a
return of capital on a Generally  Accepted  Accounting  Principle  basis for the
three months ended March 31, 1999 and 1998.


                           Net Income               Cash
                             (Loss)            Distributions          Return of
                           Allocated              Declared             Capital
                           ---------              --------             -------

Limited Partners:
       1999                $ (1,917)              $   28,287          $  28,287
       1998                  18,804                   57,939             39,135

General Partner:
       1999                $    (19)              $      286          $     286
       1998                     190                      585                395

In an effort to continue to improve occupancy at the  Partnership's  residential
properties,  the  Partnership  has an on-site  leasing  staff,  employees of NTS
Development Company, at each of the apartment communities. The staff handles all
on-site visits from potential  tenants,  coordinates  local advertising with NTS
Development  Company's  marketing  staff,  makes  visits to local  companies  to
promote  fully  furnished  units  and  works  with  current  residents  on lease
renewals.

The  lease at  Blankenbaker  Business  Center  1A  provides  for the  tenant  to
contribute toward the payment of common area expenses, insurance and real estate
taxes.  This lease provision,  along with the fact that  residential  leases are
generally for a period of one year, should protect the Partnership's  operations
from the impact of inflation and changing prices.

Some of the statements included in Item 2, Management's  Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  may be  considered  to be
"forward-looking  statements" since such statements relate to matters which have
not yet occurred.  For example,  phrases such as "the Partnership  anticipates",
"believes" or "expects" indicate that it is possible that the event anticipated,
believed or expected may not occur. Should such event not occur, then the result
which  the  Partnership  expected  also may not  occur  or occur in a  different
manner, which may be more or less favorable to the Partnership.  The Partnership
does not  undertake  any  obligations  to  publicly  release  the  result of any
revisions to these  forward-looking  statements  that may be made to reflect any
future events or circumstances.

Any forward-looking  statements included in Management's Discussion and Analysis
of Financial  Condition and Results of Operations,  or elsewhere in this report,
which reflect  management's best judgement based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking  statements as a result of a number of factors, including
but not  limited  to those  discussed  below.  Any  forward-looking  information
provided by the  Partnership  pursuant to the safe harbor  established by recent
securities legislation should be evaluated in the context of these factors.

The  Partnership's  principal  activity  is  the  leasing  and  management  of a
commercial business center and apartment complexes. If Sykes Health Plan Service
Bureau, Inc. ("Sykes"), the tenant that occupies 100% of the business center, or
a large number of apartment  lessees default on their lease,  the  Partnership's
ability to make  payments  due under its debt  agreements,  payment of operating
costs and other  partnership  expenses  would be directly  impacted.  A lessee's
ability to make  payments are subject to risks  generally  associated  with real
estate,  many of which are beyond  the  control  of the  Partnership,  including
general or local economic conditions,  competition,  interest rates, real estate
tax rates, other operating expenses and acts of God.




                                     - 14 -

<PAGE>



During the three months  ended March 31, 1999,  SHPS,  Inc.,  formerly  known as
Sykes Health Plan Services,  Inc.,  announced its intentions to consolidate  its
operations  and  to  build  its  corporate  headquarters  in  Jefferson  County,
Kentucky. One of SHPS, Inc's operations,  Sykes, is already based in Louisville,
Kentucky in Blankenbaker Business Center 1A. Due to the expansion of SHPS, Inc's
headquarters,  it is the  Partnership's  understanding  that SHPS, Inc. does not
intend to  continue  to  occupy  the space at  Blankenbaker  Business  Center 1A
through the duration of its lease,  July 2005. The  Partnership's  proportionate
share of the rental income from this property accounted for approximately 16% of
the  Partnership's  total revenues as of March 31, 1999. The Partnership has not
yet determined the effect,  if any, on the Partnership's  operations,  given the
fact Sykes is under lease until July 2005 and no official  notice of termination
has been received.

All  divisions of NTS,  General  Partner of the  Partnership,  are reviewing the
effort  necessary to prepare our  information  systems (IT) and  non-information
technology  with embedded  technology  (ET) for the Year 2000.  The  information
technology  solutions have been  addressed  separate for the Year 2000 since the
Partnership  saw the need to move to more  advanced  management  and  accounting
systems made available by new technology  and software  developments  during the
decade of the 1990's.

The PILOT software  system,  purchased in the early 1990's needed to be replaced
by a windows based network system both for our  headquarter  functions and other
locations.  The real estate accounting  system developed,  sold and supported by
the Yardi Company of Santa  Barbara,  California  has been selected to supercede
PILOT.  The Yardi  system has been tested and is  compatible  with Year 2000 and
beyond.  This  system  is  being  implemented  with  the  help  of  third  party
consultants  and should be  operational by the third quarter of 1999. Our system
for multi-family  apartment  locations was converted to GEAC's Power Site System
earlier in 1998 and is Year 2000 compliant.

The few remaining  systems not addressed by these conversions are being modified
by our in-house staff of programmers.  The Hewlett Packard 3000 system, used for
PILOT and custom applications, was purchased in 1997 and will be part of our new
network.  It will be retained as long as necessary to assure  smooth  operations
and has been upgraded to meet Year 2000 requirements.

All risks identified with information technology are believed to be addressed by
these plans.

The cost of these advances in our systems  technology is not all attributable to
the Year  2000  issues  since we had  already  identified  the need to move to a
network based system  regardless of the Year 2000.  The costs  incurred  through
December 31, 1998 were approximately $9,000. The costs involved for 1999 will be
approximately $36,000. These costs include hardware and software.

NTS  property  management  staff has been  surveying  our  vendors  to  evaluate
embedded technology in our alarm systems,  HVAC controls,  telephone systems and
other  computer  associated  facilities.  In a few  cases,  equipment  is  being
replaced. In some cases, circuitry is being upgraded. The cost involved is still
being evaluated. There are no known significant risks that are currently without
solutions.  Management  anticipates that applications  involving ET will be year
2000 compliant by the third quarter of 1999.

We are also currently  addressing the Year 2000 readiness of third parties whose
business interruption could have a material negative impact on our business. All
significant  vendors and tenants have  indicated  that they will be compliant by
the end of 1999. Such assurances are being evaluated and documented.

Management has determined that at our current state of readiness,  the need does
not  presently  exist for a  contingency  plan. We will continue to evaluate the
need for such a plan.



                                     - 15 -

<PAGE>



Despite diligent preparation,  unanticipated third-party failures,  inability of
our tenants to pay rent when due, more general public infrastructure failures or
failure to successfully conclude our remediation efforts as planned could have a
material  adverse  impact on our  results of  operations,  financial  conditions
and/or cash flows in 1999 and beyond.




                                     - 16 -

<PAGE>



PART II.  OTHER INFORMATION

3.     Defaults upon Senior Securities
       -------------------------------

       None


6.     Exhibits and Reports on Form 8-K
       --------------------------------

       (a)    Exhibits:

              Exhibit 27. Financial Data Schedule

       (b) Reports on Form 8-K:

              None.

Items 1,2,4 and 5 are not applicable and have been omitted.


                                     - 17 -

<PAGE>



                                   SIGNATURES
                                   ----------

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


                                             NTS-PROPERTIES VII, LTD.
                                             ------------------------
                                                   (Registrant)

                                     By:     NTS-Properties Associates VII,
                                             General Partner
                                             By:   NTS Capital Corporation,
                                                   General Partner


                                                   ---------------------------- 
                                                   Brian F. Lavin
                                                   President and Chief Operating
                                                   Officer of NTS Capital
                                                   Corporation (acting Chief
                                                   Financial Officer)


Date:    May 14, 1999
         ------------



                                     - 18 -

<PAGE>


                                   SIGNATURES
                                   ----------

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


                                          NTS-PROPERTIES VII, LTD.
                                          ------------------------
                                                 (Registrant)

                                  By:     NTS-Properties Associates VII,
                                          General Partner
                                          By:   NTS Capital Corporation,
                                                General Partner


                                                /s/ Brian F. Lavin
                                                ------------------
                                                Brian F. Lavin
                                                President  and Chief Operating
                                                Officer of NTS Capital
                                                Corporation (acting Chief
                                                Financial Officer)



Date:    May 14, 1999
         ------------



                                     - 18 -