UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended              June 30, 1999
--------------------------------------------------------------------------------
                                       OR

[ ]                        TRANSITION REPORT PERSUANT 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 registrants specified in its charter)

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


   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 (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,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                                              YES  x   NO_______

Exhibit Index: See page 19
Total Pages: 20



<PAGE>






                                TABLE OF CONTENTS

                                                                          Pages

                                     PART I

Item 1.     Financial Statements

            Balance Sheets and Statement of Partners' Equity
              as of June 30, 1999 and December 31, 1998                        3

            Statements of Operations
              For the three months and six months ended
              June 30, 1999 and 1998                                           4

            Statements of Cash Flows
              For the six months ended June 30, 1999 and 1998                  5

            Notes To Financial Statements                                   6-11

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          12-18

Item 3. Quantitative and Qualitative Disclosures About Market Risk            18


                                     PART II

3.  Defaults upon Senior Securities                                           19
5.  Other Information                                                         19
6.  Exhibits and Reports on Form 8-K                                          19

Signatures                                                                    20


                                       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
                                      June 30, 1999           December 31, 1998*
ASSETS
<S>                                   <C>                            <C>

Cash and equivalents                  $    430,413                  $    398,001
Cash and equivalents - restricted           50,505                       100,427
Investment securities                          --                             --
Accounts receivable                         15,380                            --
Land, buildings and amenities, net       9,781,186                    10,036,720
Other assets                               193,451                       130,828
                                       -----------                   -----------
                                      $ 10,470,935                  $ 10,665,976
                                       ===========                   ===========

LIABILITIES AND PARTNERS' EQUITY

Mortgages payable                     $  4,973,026                  $  5,088,213
Accounts payable                            48,072                        57,319
Distributions payable                       28,572                        29,078
Security deposits                           29,724                        28,401
Other liabilities                           64,908                        41,265
                                       -----------                   -----------
                                         5,144,302                     5,244,276

Partners' equity                         5,326,633                     5,421,700
                                       -----------                   -----------

                                      $ 10,470,935                  $ 10,665,976
                                       ===========                   ===========


                                       Limited        General
                                      Partners        Partner              Total
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 income - current year                21,856             221          22,077
Cash distributions declared to
 date                                (2,577,737)        (26,038)     (2,603,775)
Repurchase of limited
 partnership Units                     (355,080)           --          (355,080)
                                     ------------     ------------   -----------
Balances at June 30, 1999           $  5,379,073    $    (52,440)   $  5,326,633
                                     ============    ============    ===========

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


</TABLE>

                                        3
<PAGE>
<TABLE>


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

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

<CAPTION>

                                                        Three Months Ended             Six Months Ended
                                                              June 30,                     June 30,
                                                    --------------------------------------------------------

                                                          1999          1998         1999          1998
                                                    --------------------------------------------------------
<S>                                                    <C>           <C>          <C>         <C>

REVENUES:
  Rental income                                         $ 491,470    $ 493,870    $ 946,001    $ 956,060
 Interest and other income                                 10,242        6,418       12,543       13,201
                                                         ---------    ---------    ---------    ---------

                                                          501,712      500,288      958,544      969,261

EXPENSES:
Operating expenses                                        100,069      141,709      183,751      225,897
Operating expenses - affiliated                            65,018       63,949      131,953      125,162
Write-off of unamortized land
improvements and amenities                                   --         10,743         --         10,743
Interest expense                                           95,933       99,364      191,427      198,242
Management fees                                            25,803       25,792       48,786       49,992
Real estate taxes                                          27,136       25,150       54,272       50,928
Professional and administrative
 expenses                                                  27,124       19,851       48,502       31,386
Professional and administrative
 expenses - affiliated                                     15,886       21,098       35,935       43,380
Depreciation and amortization                             120,732      119,788      241,841      241,693
                                                         ---------    ---------    ---------    ---------

                                                          477,701      527,444     936,467       977,423
                                                         ---------    ---------    ---------    ---------

Net income (loss)                                       $  24,011    $ (27,156)   $  22,077    $  (8,162)
                                                         =========    ========     =========    ========

Net income (loss) allocated to the limited
partners                                                $  23,771    $ (26,884)   $  21,856    $  (8,080)
                                                         =========    ========     =========    ========

Net income (loss) per limited
partnership unit                                        $    0.04    $   (0.05)   $    0.04    $   (0.01)
                                                         =========    ========     =========    ========

Weighted average number of units                          565,736      576,483      569,603      586,433
                                                         =========    ========     ========     ========
</TABLE>


                                       4
<PAGE>

<TABLE>

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

                            STATEMENTS OF CASH FLOWS
                            ------------------------
<CAPTION>


                                                       Six Months Ended
                                                           June 30,

                                         --------------------------------------

                                               1999                         1998
                                          --------------------------------------
<S>                                         <C>                      <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                           $ 22,077                 $    (8,162)
Adjustments to reconcile net income
 (loss) to net cash provided by
  operating activities:
  Accrued interest on investment securities        --                      1,737
  Write-off of unamortized land
  improvements and amenities                       --                     10,743
    Depreciation and amortization             241,841                    241,693
    Changes in assets and liabilities
    Cash and equivalents - restricted          49,922                     (6,507)
    Accounts receivable                       (20,852)                    (2,602)
    Other assets                               (6,415)                      (480)
    Accounts payable                           (9,247)                    36,212
    Security deposits                           1,323                    (4,175)
    Other liabilities                          23,643                     50,653
                                               ------                  ---------
    Net cash provided by operating activities 302,292                    319,112
                                              -------                  ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and
amenities                                     (37,048)                   (90,496)
Purchase of investment securities                  --                   (200,000)
Maturity of investment securities                  --                    536,392
                                              --------                 ---------



   Net cash provided by (used in)investing
     activities                               (37,048)                   245,896
                                               -------                 ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Cash and equivalents - restricted                  --                    127,650
Principal payments on mortgages
payable                                      (115,182)                  (106,137)
Cash distributions                            (57,650)                  (118,950)
Repurchase of limited partnership Units       (60,000)                  (134,892)
Payment of loan costs                              --                     (5,172)
                                             --------                 ----------

   Net cash used in financing activities     (232,832)                  (237,501)
                                             --------                  ---------

   Net increase in cash and equivalents        32,412                    327,507


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

CASH AND EQUIVALENTS, end of period         $ 430,413                  $ 492,221
                                              ========                  ========

Interest paid on a cash basis               $ 191,428                  $ 200,145
                                              ========                  ========

</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 and six
months ended June 30, 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 and six months ended June 30, 1999 or during the twelve months ended
     December 31, 1998. The  Partnership  held no securities at June 30, 1999 or
     at December 31, 1998.

3.   Basis of Property and Depreciation
     ----------------------------------

     Land, buildings and amenities are stated at cost to the Partnership.  Costs
     directly associated with the acquisition, development and construction of a
     project are capitalized.  Depreciation is computed using the  straight-line
     method over the  estimated  useful lives of the assets which are 5-30 years
     for land  improvements,  5-30 years for  buildings and  improvements,  5-30
     years for amenities and the applicable lease term for tenant improvements.

     Statement of Financial  Accounting Standards (SFAS) No. 121, Accounting for
     the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets  to be
     Disposed Of,  specifies  circumstances in which certain  long-lived  assets
     must be reviewed for impairment. If such review indicates that the carrying
     amount of an asset exceeds the sum of its expected  future cash flows,  the
     asset's  carrying value must by written down to fair value.  Application of
     this standard  during the three months ended June 30, 1999 and 1998 did not
     result in an impairment loss.


                                       6
<PAGE>
4.   Mortgages Payable
     -----------------

     Mortgages payable consist of the following:


                                                        June 30,    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.                   $ 3,932,739    $ 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.                     1,040,287      1,100,383
                                                       ----------     ----------

                                                      $ 4,973,026    $ 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 $5,200,000.

5.   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 June 30, 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

                                       7
<PAGE>


5.   Interest Repurchase Reserve - continued
     ---------------------------------------

     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.

6.   Related Party Transactions
     --------------------------

     Property   management  fees  of  $48,786  and  $49,992  were  paid  to  NTS
     Development  Company,  an affiliate of the General Partner,  during the six
     months ended June 30, 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 six
     months ended June 30, 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                          $  21,221                $  17,023
             Administrative                      77,505                   55,243
             Property manager                    67,536                   95,677
             Other                                4,076                    1,568
                                               --------                 --------
                                              $ 170,338                $ 169,511
                                               ========                 ========

7.   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.

     The financial information of the operating segments has 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.





                                 Six Months Ended June 30, 1999
                         Residential             Commercial                TOTAL
Rental income             $796,874                 $149,128             $946,002
Other income                 5,444                        7                5,451
                           -------                  -------              -------

Total net revenues         802,318                  149,135              951,453
                           =======                  =======              =======

Operating expenses         294,495                   21,209              315,704
Interest expense                --                   45,717               45,717
Management fees             40,072                    8,715               48,787
Real estate taxes           45,420                    8,852               54,272
Depreciation expense       189,996                   45,804              235,800
                           -------                  -------              -------
Net income (loss)          232,335                   18,838              251,173
                           =======                   ======              =======

                                       8
<PAGE>


7. Segment Reporting - continued
   -----------------------------

                                   Six Months Ended June 30, 1998
                               Residential       Commercial                TOTAL
Rental income                   $812,531           $143,529             $956,060
Other income                       2,590                 --                2,590
                                 -------            -------              -------

Total net revenues               815,121            143,529              958,650
                                 =======            =======              =======

Operating expenses               327,629             23,430              351,059
Write off of unamortized loan
 improvements and amenities       10,739                 --               10,739
Interest expense                      --             50,080               50,080
Management fees                   41,060              8,932               49,992
Real estate taxes                 41,149              9,779               50,928
Depreciation expense             190,440             45,805              236,245
                                 -------            -------              -------
Net income (loss)                204,104              5,503              209,607
                                 =======            =======              =======


                                 Three Months ended June 30, 1999

                               Residential       Commercial                TOTAL
Rental income               $    416,906       $     74,564          $   491,470
Other income                       3,143                  7                3,150
                                 -------            -------              -------

Total net revenues               420,049             74,571              494,620
                                 =======            =======              =======

Operating expenses               154,956             10,131              165,087
Interest expense                      --             22,542               22,542
Management fees                   21,330              4,474               25,804
Real estate taxes                 22,710              4,426               27,136
Depreciation expense              95,025             22,902              117,927
                                 -------             ------              -------

Net Income (Loss)                126,028             10,096              136,124
                                 =======             ======              =======

                                  Three Months Ended June 30, 1998
                                Residential      Commercial                TOTAL
Rental income                    $424,777           $69,093             $493,870
Other income                        1,731                --                1,731
                                  -------            -------             -------

Total net revenues                426,508            69,093              495,601
                                  =======            ======              =======

Operating expenses                195,216            10,442              205,658
Write off of unamortized loan
  improvements and  amenities      10,739                --               10,739
Interest expense                       --            24,504               24,504
Management fees                    21,326             4,466               25,792
Real estate taxes                  20,712             4,438               25,150
Depreciation expense               94,206            22,902              117,108
                                   ------            ------              -------

Net income (loss)                  84,309             2,341               86,650
                                   ======            ======              =======



                                       9
<PAGE>

7. Segment Reporting - continued
   -----------------------------

A  reconciliation  of the totals  reported  for the  operating  segments  to the
applicable  line items in the  consolidated  financial  statements for the three
months and six months  ended June 30, 1999 and 1998 is necessary  given  amounts
recorded at the Partnership level and not allocated to the operating  properties
for internal reporting purposes.

<TABLE>
                                                       Six Months ended June 30,
                                               ---------------------------------
                                                          1999              1998

                                               ---------------------------------
<CAPTION>
<S>                                                   <C>             <C>

NET REVENUES
Total revenues for reportable segments                $   951,453     $  958,650
Other income for partnership                               25,930         16,115
Eliminations                                              (18,839)        (5,504)
                                                       ----------       --------

Total consolidated net revenues                           958,544        969,261
                                                       ==========       ========

INTEREST EXPENSE
Interest expense for reportable segments                   45,717         50,080
Interest expense for partnership                          145,710        148,162
                                                       ----------       --------

Total interest expense                                    191,427        198,242
                                                       ==========       ========

DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for
reportable segments                                      235,800         236,245
Depreciation and amortization for
partnership                                               13,884          13,292
Eliminations                                              (7,843)         (7,844)
                                                       ----------       --------

Total depreciation and amortization                      241,841         241,693
                                                       ==========       ========

NET INCOME (LOSS)
Total net income (loss) for reportable
segments                                                  251,173        209,607
Net income (loss) for partnership                        (218,101)      (220,105)
Eliminations                                              (10,995)         2,336
                                                       ----------       --------

Total net income (loss)                                    22,077         (8,162)
                                                       ==========       ========
</TABLE>


                                       10
<PAGE>


7. Segment Reporting - continued


<TABLE>

                                                     Three Months ended June 30,
                                                    ----------------------------
                                                        1999                1998
                                                    ----------------------------
<CAPTION>
<S>                                                 <C>               <C>

NET REVENUES
Total revenues for reportable segments              $   494,620       $  495,601
Other income for partnership                             17,188            7,027
Eliminations                                            (10,096)          (2,340)
                                                     ----------        ---------

Total consolidated net revenues                         501,712          500,288
                                                     ==========        =========

INTEREST EXPENSE
Interest expense for reportable segments                 22,542           24,504
Interest expense for partnership                         73,391           74,860
                                                      ---------        ---------

Total interest expense                                   95,933           99,364
                                                      =========        =========

DEPRECIATION AND AMORTIZATION
Total depreciation and amortization for
reportable segments                                     117,927          117,108
Depreciation and amortization for
partnership                                               6,727            6,602
Eliminations                                             (3,922)          (3,922)
                                                      ---------        ---------

Total depreciation and amortization                     120,732          119,788
                                                      =========        =========

NET INCOME (LOSS)
Total net income (loss) for reportable
segments                                                136,124           86,650
Net income (loss) for partnership                      (105,939)        (115,383)
Eliminations                                             (6,174)           1,577
                                                      ---------        ---------

Total net income (loss)                                  24,011          (27,156)
                                                      =========        =========
</TABLE>

8.     Subsequent Event
       ----------------

On July 1, 1999,  Gregory A. Wells was hired as Executive  Vice President by NTS
Capital  Corporation,  General  Partner of  NTS-Properties  Associates  VII, the
General  Partner  of  NTS-Properties  VII.  Mr.  Wells  will serve as the senior
Accounting and Financial Officer of NTS Capital Corporation.



                                       11
<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  also  follow.
Management's   analysis  should  be  read  in  conjunction  with  the  financial
statements in Item 1 and the cautionary statements below.

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.



                                       12
<PAGE>

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

The occupancy levels at the Partnership's properties  as  of  June  30  were  as
follows:
                                                        1999                1998
                                              ----------------------------------
Wholly-owned Properties

The Park at the Willows                                  94%                 90%

Park Place Apartments Phase II                           88%                 84%

Property Owned in Joint Venture with
NTS-Properties IV and NTS-Properties
Plus Ltd. (Ownership % at June 30, 1999)

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

The average  occupancy levels at the  Partnership's  properties during the three
months and six months ended June 30 were as follows:
                                         Three Months                 Six Months
                                        Ended June 30,            Ended June 30,
                                   1999          1998         1999          1998
                               -------------------------------------------------
Wholly-owned Properties

The Park at the Willows             95%           91%          92%           92%

Park Place Apartments Phase II      86%           85%          84%           84%

Property owned in Joint Venture with
NTS-Properties IV and NTS-Properties
Plus Ltd. (Ownership %at June 30, 1999)
Blankenbaker Business Center 1A (31%)100%        100%         100%          100%

Rental and other income generated by the Partnership's  properties for the three
months and six months ended June 30, 1999 and 1998 was as follows:

                                          Three Months                Six Months
                                         Ended June 30,           Ended June 30,
                                        1999      1998         1999         1998
                                    --------------------------------------------
Wholly-owned Properties

The Park at the Willows               $89,274   $97,990     $173,413    $183,023

Park Place Apartments Phase II       $330,775  $328,518     $628,905    $632,098

Property owned in Joint Venture with
NTS-Properties IV and NTS-Properties  Plus
Ltd. (Ownership % at June 30, 1999)
Blankenbaker Business Center 1A
(31%)(1)                             $74,571   $69,093     $149,135     $143,529



                                       13
<PAGE>


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

(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
       and six months ended June 30, 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  June 30, 1999 and 1998.  Items that did not have a material
impact on operations for the periods listed above have been eliminated from this
discussion.

Operating  expenses decreased  approximately  $41,600 or 29% and $42,100 or 19%,
respectively,  for the  three  months  and six  months  ended  June 30,  1999 as
compared  to the same  periods  in  1998.  This  decrease  is due  primarily  to
decreased  building  repairs and landscaping at Park Place  Apartments Phase II,
decreased  landscaping expense at the Park at the Willows,  and decreased repair
and maintenance costs at Blankenbaker Business Center 1A.

Professional and Administrative  expenses increased  approximately $7,300 or 37%
and $17,100 or 55%, respectively, for the three months and six months ended June
30,  1999 as  compared  to the same  periods in 1998.  These  increases  are due
primarily to increased legal costs,  outside accounting costs and printing costs
incurred for the Tender Offer.

Professional and administrative  expenses - affiliated  decreased  approximately
$5,200 or 25% and  $7,400 or 17%,  respectively,  for the three  months  and six
months ended June 30, 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.




                                       14
<PAGE>

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


Cash flows provided by (used in):


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

Operating activities                               $ 302,292           $ 319,112

Investing activities                                 (37,048)            245,896

Financing activities                                (232,832)          (237,501)
                                                    --------            --------

Net increase (decrease) in cash and
equivalents                                        $ 32,412            $ 327,507
                                                    ========            ========

Net cash provided by operating activities decreased  approximately $16,800 or 5%
for the six months  ended June 30,  1999 as compared to the same period in 1998.
The decrease in net cash provided by operating  activities was driven  primarily
by negative changes in working capital  accounts,  offset by increase net income
and a decrease in cash and equivalents - restricted.

Net cash  provided  by (used in)  investing  activities  totaled  ($37,048)  and
$245,896  for the six months  ended June 30,  1999 and 1998,  respectively.  The
decrease in net cash provided by investing  activities  for the six months ended
June 30 as  compared  to the same  period in 1998 is  primarily  a result of not
holding any investments during the six months ended June 30, 1999 and to reduced
capital  expenditures  in the six months  ended June 30, 1999 as compared to the
same period in 1998.

Net cash used in financing  activities totaled $232,832 and $237,501 for the six
months ended June 30, 1999 and 1998, respectively. The decrease in net cash used
in financing  activities was primarily due to a lower  distribution  to partners
and a lesser number of  partnership  units  repurchased  in the six months ended
June 30, 1999 as compared to the same period in 1998, offset by a smaller change
in cash and  equivalents-restricted  for the six months  ended June 30,  1999 as
compared to the same period 1998.

During the six months  ended June 30, 1999 the  Partnership  used cash flow from
operations  and  cash on  hand to pay a 1%  (annualized)  cash  distribution  of
$57,650  (1999) and a 1.50%  (annualized,  2% in the first quarter and 1% in the
second quarter) cash distribution of $87,602 (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 June 30) were  $430,413 and
$492,221 at June 30, 1999 and 1998, respectively.

Pursuant to Section 16.4 of the Partnership's Amended and Restated Agreement



                                       15
<PAGE>

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

Repurchase  Reserve. As of June 30, 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.

The table below  presents  that portion of the  distributions  that  represent a
return of capital on a Generally Accepted Accounting Principle basis for the six
months ended June 30, 1999 and 1998.


                              Net Income             Cash
                               (Loss)            Distributions         Return of
                              Allocated             Declared             Capital
                            ----------------------------------------------------
   Limited Partners:
         1999                $ 21,856            $   56,008            $  34,152
         1998                  (8,080)               86,726               86,726

   General Partner:
         1999                   $ 221            $      566            $     345
         1998                     (82)                  876                  876

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



                                       16
<PAGE>

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

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.

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 for the six months ended June 30, 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.

Year 2000
---------

All  divisions of NTS,  General  Partner of the  Partnership,  are reviewing the
effort  necessary to prepare its  information  systems (IT) and  non-information
technology  with embedded  technology  (ET) for the Year 2000.  The  information
technology  solutions have been addressed separately 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 NTS' 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. NTS' 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 NTS' 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 NTS'
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.



                                       17
<PAGE>

Year 2000 - continued
---------------------

The cost of these advances in NTS' 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  its  vendors  to  evaluate
embedded technology in its 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.

NTS is also currently  addressing the Year 2000 readiness of third parties whose
business interruption could have a material negative impact on its 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 its current state of readiness,  the need does
not presently  exist for a contingency  plan.  NTS will continue to evaluate the
need for such a plan.

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
         ----------------------------------------------------------

Our primary risk  exposure with regards to financial  instruments  is changes in
interest rates. All of the Partnership's debt bears interest at a fixed rate.





                                       18
<PAGE>


PART II.  OTHER INFORMATION

3.  Defaults upon Senior Securities

       None

5.     Other Information
       -----------------

       In  anticipation  of retirement,  Mr. Richard Good, the Vice Chairman and
       former President of NTS Capital Corporation and NTS Development  Company,
       has begun to decrease his  responsibilities  with the Partnership and its
       affiliates.  In conjunction with Mr. Good's  decreased  responsibilities,
       Mr. Brian Lavin was appointed  President and Chief  Operating  Officer of
       NTS Development Company and NTS Capital Corporation in February, 1999.

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 and 4 are not applicable and have been omitted.





                                       19
<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/ Gregory A. Wells
                                                        --------------------
                                                        Gregory A. Wells
                                                        Executive Vice President
                                                        of     NTS       Capital
                                                        Corporation



Date:  August 13, 1999


                                       20
<PAGE>