<PAGE>
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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

For the quarterly period ended                 June 30, 2000
                              --------------------------------------------------

                                       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
incorporation or organization)                     Identification No.)

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

                                 (502) 426-4800
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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.
                                                  [X] Yes           [ ] No






<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                     PART I
                                     ------

                                                                          Pages
                                                                          -----

Item 1. Financial Statements

        Balance Sheets as of June 30, 2000 and December 31, 1999          3

        Statement of Partners' Equity as of June 30, 2000                 3

        Statements of Operations for the three months and six months ended
              June 30, 2000 and 1999                                      4

        Statements of Cash Flows for the six months ended
              June 30, 2000 and 1999                                      5

        Notes to Financial Statements                                     6-13

Item 2. Management's Discussion and Analysis of Financial Condition
                           and Results of Operations                      14-19

Item 3. Quantitative and Qualitative Disclosures About Market Risk        20

                                     PART II
                                     -------

Item 1. Legal Proceedings                                                 21

Item 2. Changes in Securities                                             21

Item 3. Defaults Upon Senior Securities                                   21

Item 4. Submission of Matters to a Vote of Security Holders               21

Item 5. Other Information                                                 21

Item 6. Exhibits and Reports on Form 8-K                                  21

Signatures                                                                22






                                        2

<PAGE>


PART I.  FINANCIAL INFORMATION
         ---------------------
Item 1.  Financial Statements
         --------------------

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


<CAPTION>
                                                 As of                 As of
                                                June 30,            December 31,
                                                  2000                 1999*
                                                  ----                 -----
                                               (Unaudited)

ASSETS
------
<S>                                             <C>                  <C>
Cash and equivalents                            $   385,910          $   400,262
Cash and equivalents - restricted                    50,924               40,080
Accounts receivable                                   5,255               21,771
Land, buildings and amenities, net                9,561,589            9,688,537
Other assets                                        117,385              116,993
                                                -----------          -----------

     TOTAL ASSETS                               $10,121,063          $10,267,643
                                                ===========          ===========

LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Mortgages payable                               $ 4,730,516          $ 4,854,355
Accounts payable                                     36,264               97,355
Security deposits                                    26,650               26,475
Other liabilities                                    77,974               24,646
                                                -----------          -----------
     TOTAL LIABILITIES                            4,871,404            5,002,831

COMMITMENTS AND CONTINGENCIES (Note 9)

PARTNERS' EQUITY                                  5,249,659            5,264,812
                                                -----------          -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY          $10,121,063          $10,267,643
                                                ===========          ===========
</TABLE>
<TABLE>

                          STATEMENT OF PARTNERS' EQUITY
                          -----------------------------

<CAPTION>

                                                     Limited           General
                                                     Partners          Partner            Total
                                                     --------          -------            -----

PARTNERS' EQUITY/(DEFICIT)
--------------------------
<S>                                               <C>               <C>               <C>
Capital contributions, net of  offering costs     $ 10,935,700      $        100      $ 10,935,800
Net loss - prior years                              (2,569,539)          (25,954)       (2,595,493)
Net income - current year                               40,572               410            40,982
Cash distributions declared to date                 (2,689,385)          (27,165)       (2,716,550)
Repurchase of Limited Partnership Units               (415,080)             --            (415,080)
                                                  -------------     -------------     -------------
BALANCES AT JUNE 30, 2000                         $  5,302,268      $    (52,609)     $  5,249,659
                                                  =============     =============     =============
</TABLE>


*    Reference is made to the audited financial statements in Form 10-K as filed
     with the Securities and Exchange Commission on March 29, 2000.

The  accompanying  notes to financial  statements  are an integral part of these
statements.



                                        3

<PAGE>

<TABLE>

                            NTS-PROPERTIES VII, LTD.
                            ------------------------
                            STATEMENTS OF OPERATIONS
                            ------------------------
                                   (UNAUDITED)
                                   -----------

<CAPTION>

                                                 Three Months Ended         Six Months Ended
                                                       June 30,                 June 30,
                                                       --------                 --------
                                                   2000         1999        2000         1999
                                                   ----         ----        ----         ----


REVENUES
--------
<S>                                              <C>          <C>          <C>          <C>
Rental income                                    $492,652     $491,470     $942,272     $946,001
Interest and other income                           6,260       10,242       13,818       12,543
Gain on sale of assets                                 --           --        4,118           --
                                                 --------     --------     --------     --------

     TOTAL REVENUES                               498,912      501,712      960,208      958,544
                                                 --------     --------     --------     --------
EXPENSES
--------
Operating expenses                                 86,837      100,069      168,748      183,751
Operating expenses - affiliated                    65,839       65,018      121,719      131,953
Loss on disposal of assets                             76           --       19,919           --
Interest expense                                   90,237       95,933      181,200      191,427
Management fees                                    25,895       25,803       49,920       48,786
Real estate taxes                                  27,293       27,136       54,586       54,272
Professional and administrative
  expenses                                         21,801       27,124       52,565       48,502
Professional and administrative
  expenses - affiliated                            22,653       15,886       42,244       35,935
Depreciation and amortization                     114,443      120,732      228,325      241,841
                                                 --------     --------     --------     --------

     TOTAL EXPENSES                               455,074      477,701      919,226      936,467
                                                 --------     --------     --------     --------

Net income                                       $ 43,838     $ 24,011     $ 40,982     $ 22,077
                                                 ========     ========     ========     ========

Net income allocated to the Limited Partners     $ 43,400     $ 23,771     $ 40,572     $ 21,856
                                                 ========     ========     ========     ========

Net income per Limited Partnership Unit          $   0.08     $   0.04     $   0.07     $   0.04
                                                 ========     ========     ========     ========

Weighted average number of  Limited
   Partnership Units                              555,736      565,736      555,736      569,603
                                                 ========     ========     ========     ========
</TABLE>


The  accompanying  notes to financial  statements  are an integral part of these
statements.












                                        4

<PAGE>

<TABLE>

                            NTS-PROPERTIES VII, LTD.
                            ------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                                   (UNAUDITED)
                                   -----------

<CAPTION>

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

                                                                   2000              1999
                                                                   ----              ----


CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
<S>                                                             <C>               <C>
Net income                                                      $  40,982         $  22,077
Adjustments to reconcile net income to net cash provided
  by operating activities:
    Loss on disposal of assets                                     19,919                --
    Gain on sale of assets                                         (4,118)               --
    Depreciation and amortization                                 228,325           241,841
    Changes in assets and liabilities:
      Cash and equivalents - restricted                             4,156           (10,078)
      Accounts receivable                                          16,516           (20,852)
      Other assets                                                 (3,305)           (6,415)
      Accounts payable                                            (61,091)           (9,247)
      Security deposits                                               175             1,323
      Other liabilities                                            53,328            23,643
                                                                ----------        ----------
     Net cash provided by operating activities                    294,887           242,292
                                                                ----------        ----------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Proceeds from sale of assets                                        6,934                --
Additions to land, buildings and amenities                       (121,199)          (37,048)
                                                                ----------        ----------
     Net cash used in investing activities                       (114,265)          (37,048)
                                                                ----------        ----------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Cash and equivalents - restricted                                 (15,000)           60,000
Principal payment on mortgages payable                           (123,839)         (115,182)
Cash distributions                                                (56,135)          (57,650)
Repurchase of Limited Partnership Units                                --           (60,000)
                                                                ----------        ----------
     Net cash used in financing activities                       (194,974)         (172,832)
                                                                ----------        ----------
     Net (decrease) increase in cash and equivalents              (14,352)           32,412

CASH AND EQUIVALENTS, beginning of period                         400,262           398,001
                                                                ----------        ----------
CASH AND EQUIVALENTS, end of period                             $ 385,910         $ 430,413
                                                                ==========        ==========
Interest paid on a cash basis                                   $ 182,423         $ 191,428
                                                                ==========        ==========
</TABLE>


The  accompanying  notes to financial  statements  are an integral part of these
statements.






                                        5

<PAGE>

                            NTS-PROPERTIES VII, LTD.
                            ------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

The unaudited financial statements included herein should be read in conjunction
with the Partnership's  1999 Form 10-K as filed with the Securities and Exchange
Commission  on March 29,  2000.  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 six
months ended June 30, 2000 and 1999.

1.   Use of Estimates in the Preparation of Financial Statements
     -----------------------------------------------------------

     The  preparation  of financial  statements  in  conformity  with  Generally
     Accepted  Accounting   Principles  ("GAAP")  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

2.   Concentration of Credit Risk
     ----------------------------

     NTS-Properties  VII,  Ltd. owns and operates,  through a joint  venture,  a
     commercial  rental  property  in  Louisville,  Kentucky.  A  single  tenant
     occupies this commercial  property.  The Partnership also owns and operates
     residential rental properties in Louisville and Lexington, Kentucky.

3.   Reclassifications of 1999 Financial Statements
     ----------------------------------------------

     Certain  reclassifications  have been made to the June 30,  1999  financial
     statements  to  conform  with  the  June 30,  2000  classifications.  These
     reclassifications have no effect on previously reported operations.

4.   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 purchase of Limited  Partnership  Units
     through tender offers (See Note 7).

5.   Basis of Property and Depreciation
     ----------------------------------

     Land,   buildings  and  amenities  are  stated  at  historical  cost,  less
     accumulated  depreciation,  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 7-30 years for land
     improvements,  5-30 years for  buildings and  improvements,  5-30 years for
     amenities and the applicable lease term for tenant improvements.

                                        6

<PAGE>


5.   Basis of Property and Depreciation - Continued
     ----------------------------------------------

     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 the carrying amount of an asset exceeds
     the sum of its expected future cash flows,  the asset's carrying value must
     be written  down to fair value.  Application  of this  standard  during the
     periods ended June 30, 2000 and 1999 did not result in any impairment loss.

6.   Mortgages Payable
     -----------------

     Mortgages payable consist of the following:


                                                    June 30,        December 31,
                                                      2000             1999
                                                      ----             ----

     Mortgage payable to an insurance company,
     bearing interest at a fixed rate of 7.37%,
     due October 15, 2012, secured by land
     and buildings.                                $ 3,817,584       $ 3,876,398

     Mortgage payable to an insurance company,
     bearing interest at a fixed rate of 8.5%,
     due November 15, 2005, secured by land
     and buildings.                                    912,932           977,957
                                                   -----------       -----------

                                                   $ 4,730,516       $ 4,854,355
                                                   ===========       ===========

     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 $4,583,000.

7.   Tender Offer
     ------------

     On March 24, 2000,  the  Partnership  and ORIG,  LLC.,  an affiliate of the
     Partnership  (the  "Offerors"),  filed a tender  offer (the  "Third  Tender
     Offer") with the  Securities and Exchange  Commission,  commencing on March
     27, 2000, to purchase 5,000 of the Partnership's  Limited Partnership Units
     at a price of $6.00  per Unit as of the  date of the  Third  Tender  Offer.
     Approximately  $48,000 ($30,000 to purchase 5,000 Units plus  approximately
     $18,000 for expenses associated with the Third Tender Offer) is required to
     purchase  all  5,000  Units.   The  Third  Tender  Offer  stated  that  the
     Partnership  will purchase the first 2,500 Units tendered and will fund its
     purchases and its portion of the expenses from cash reserves.  If more than
     2,500 Units are tendered ORIG, LLC. will purchase up to an additional 2,500
     Units.  If more than 5,000 Units are  tendered,  the Offerors may choose to
     acquire the additional  Units on a pro rata basis.  Units that are acquired
     by the Partnership  will be retired.  Units that are acquired by ORIG, LCC.
     will be held by it. The General  Partner,  NTS-Properties  Associates  VII,
     does not intend to participate in the Third Tender Offer.  The Third Tender
     Offer was scheduled to expire on June 27, 2000.




                                        7

<PAGE>


7.   Tender Offer - Continued
     ------------------------

     On June 23, 2000, the Partnership and ORIG, LLC filed an amendment,  to the
     Third Tender  Offer,  with the  Securities  and Exchange  Commission.  This
     amendment  supplements  and  amends  the Third  Tender  Offer to extend the
     expiration date of the Third Tender Offer to August 15, 2000, and to expand
     the  definition  of Offerors to include Mr. J.D.  Nichols and Mr.  Brian F.
     Lavin,  each an  affiliate  of the issuer.  As of the date of this  filing,
     32,873 Units have been tendered.

8.   Related Party Transactions
     --------------------------

     Property  management  fees of $49,920 and $48,786 for the six months  ended
     June 30, 2000 and 1999, respectively, were paid to NTS Development Company,
     an affiliate of the General  Partner.  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.  Also  pursuant  to an  agreement,  NTS  Development
     Company  will receive a repair and  maintenance  fee equal to 5.9% of costs
     incurred which relate to capital improvements.

     The  Partnership  has  incurred  $5,779 and $2,451 for the six months ended
     June 30, 2000 and 1999,  respectively,  as repair and maintenance fees, and
     has capitalized these costs as part of land,  buildings and amenities.  The
     Partnership  was also charged the  following  amounts from NTS  Development
     Company  for the six months  ended June 30,  2000 and 1999.  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.


                                              Six Months Ended
                                                  June 30,
                                                  --------
                                           2000                  1999
                                           ----                  ----

     Leasing                            $  11,911             $  21,221
     Administrative                        77,517                77,505
     Property Management                   73,969                67,536
     Other                                    682                 4,076
                                        ---------             ---------

                                        $ 164,079             $ 170,338
                                        =========             =========

     On February 7, 2000, ORIG, LLC. (the  "Affiliate")  purchased  Interests in
     the Partnership  and pursuant to an Agreement,  Bill of Sale and Assignment
     by and among the  Affiliate  and four  investors  in the  Partnership  (the
     "Purchase  Agreement").  The  Affiliate  purchased  2,251  Interests in the
     Partnership  for a total  consideration  of $15,082 or an average  price of
     $6.70 per Interest.  The Affiliate paid these investors a premium above the
     purchase price  previously  offered for Interests  pursuant to prior tender
     offers because this purchase allowed the Affiliate to purchase  substantial
     numbers of Interests  without  incurring the significant  expenses involved
     with a tender offer and multiple transfers.



                                        8

<PAGE>

9.   Commitments and Contingencies
     -----------------------------

     The  Partnership,  as an  owner  of real  estate,  is  subject  to  various
     environmental laws of the federal and local governments.  Compliance by the
     Partnership with existing laws has not had a material adverse effect on the
     Partnership's  financial condition and results of operations.  However, the
     Partnership cannot predict the impact of new or changed laws or regulations
     on its  current  properties  or on  properties  that it may  acquire in the
     future.

     The Partnership does not believe there is any litigation threatened against
     the Partnership other than routine  litigation  arising out of the ordinary
     course of business,  some of which is expected to be covered by  insurance,
     none  of  which  is  expected  to have a  material  adverse  effect  on the
     consolidated financial statements of the Partnership.

     The Partnership  plans to replace the roofs at Park Place  Apartments Phase
     II (17 buildings) all of which were installed using shingles  produced by a
     single manufacturer. The shingles appear to contain defects which may cause
     them  to  fail  before  the  end of  their  expected  useful  life.  As the
     manufacturer has declared bankruptcy, the Partnership does not expect to be
     able to recover any of the costs of the roof replacements.  The Partnership
     does  not  have  sufficient  working  capital  to  make  all  of  the  roof
     replacements at once and intends to make the replacements  over the next 36
     months.  The total costs of  replacing  all of the roofs is estimated to be
     $340,000 ($20,000 per building).  As of June 30, 2000, no roof replacements
     have been started.

10.  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
     communities  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.















                                        9

<PAGE>


10.  Segment Reporting - Continued
     -----------------------------

     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 reports financial information
     for  the  purposes  of  assisting  in  making  operating   decisions.   The
     Partnership's   management  evaluated   performance  based  on  stand-alone
     operating segment net income.


<TABLE>
                                              Three Months Ended June 30, 2000
                                              --------------------------------

                                             Residential  Commercial     Total
                                             -----------  ----------     -----
<CAPTION>

<S>                                            <C>         <C>          <C>
Rental income                                  $414,695    $ 77,957     $492,652
Interest and other income                         1,252          22        1,274
                                               --------    --------     --------
     Total net revenues                        $415,947    $ 77,979     $493,926
                                               --------    --------     --------
Operating expenses and operating expenses -
  affiliated                                   $144,203    $  8,473     $152,676
Loss on disposal of assets                           --          76           76
Interest expense                                 70,481      19,756       90,237
Management fees                                  21,646       4,249       25,895
Real estate taxes                                22,828       4,465       27,293
Depreciation and amortization                    87,651      22,884      110,535
                                               --------    --------     --------
     Total expenses                            $346,809    $ 59,903     $406,712
                                               --------    --------     --------
     Net income                                $ 69,138    $ 18,076     $ 87,214
                                               ========    ========     ========

</TABLE>


<TABLE>

                                              Three Months Ended June 30, 1999
                                              --------------------------------

                                             Residential   Commercial    Total
                                             -----------   ----------    -----
<CAPTION>

<S>                                            <C>         <C>          <C>
Rental income                                  $416,906    $ 74,564     $491,470
Interest and other income                         3,142           7        3,149
                                               --------    --------     --------
     Total net revenues                        $420,048    $ 74,571     $494,619
                                               --------    --------     --------
Operating expenses and operating expenses -
  affiliated                                   $154,956    $ 10,131     $165,087
Interest expense                                     --      22,542       22,542
Management fees                                  21,329       4,474       25,803
Real estate taxes                                22,710       4,426       27,136
Depreciation and amortization                    95,025      22,902      117,927
                                               --------    --------     --------
     Total expenses                            $294,020    $ 64,475     $358,495
                                               --------    --------     --------
     Net income                                $126,028    $ 10,096     $136,124
                                               ========    ========     ========

</TABLE>




                                       10
<PAGE>

10.  Segment Reporting  - Continued
     ------------------------------
<TABLE>

                                                Six Months Ended June 30, 2000
                                                ------------------------------

                                             Residential   Commercial    Total
                                             -----------   ----------    -----
<CAPTION>

<S>                                            <C>         <C>          <C>
Rental income                                  $801,608    $140,664     $942,272
Interest and other income                         2,876          50        2,926
Gain on sale of assets                            4,118          --        4,118
                                               --------    --------     --------
     Total net revenues                        $808,602    $140,714     $949,316
                                               --------    --------     --------
Operating expenses and operating expenses -
  affiliated                                   $274,087    $ 16,380     $290,467
Loss on disposal of assets                       19,843          76       19,919
Interest expense                                140,996      40,204      181,200
Management fees                                  41,720       8,200       49,920
Real estate taxes                                45,656       8,930       54,586
Depreciation and amortization                   174,921      45,786      220,707
                                               --------    --------     --------
     Total expenses                            $697,223    $119,576     $816,799
                                               --------    --------     --------
     Net income                                $111,379    $ 21,138     $132,517
                                               ========    ========     ========

</TABLE>


<TABLE>

                                                Six Months Ended June 30, 1999
                                                ------------------------------

                                             Residential  Commercial     Total
                                             -----------  ----------     -----
<CAPTION>

<S>                                            <C>         <C>          <C>
Rental income                                  $796,873    $149,128     $946,001
Interest and other income                         5,444           7        5,451
                                               --------    --------     --------
     Total net revenues                        $802,317    $149,135     $951,452
                                               --------    --------     --------
Operating expenses and operating expenses -
  affiliated                                   $294,495    $ 21,209     $315,704
Interest expense                                     --      45,717       45,717
Management fees                                  40,071       8,715       48,786
Real estate taxes                                45,420       8,852       54,272
Depreciation and amortization                   189,996      45,804      235,800
                                               --------    --------     --------
     Total expenses                            $569,982    $130,297     $700,279
                                               --------    --------     --------
     Net income                                $232,335    $ 18,838     $251,173
                                               ========    ========     ========


</TABLE>









                                       11

<PAGE>


10.  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, 2000 and 1999 is necessary given
     amounts  recorded  at  the  Partnership  level  and  not  allocated  to the
     operating properties for internal reporting purposes.

<TABLE>

                                                                 Three Months Ended June 30,
                                                                 ---------------------------
                                                                     2000             1999
                                                                     ----             ----
<CAPTION>

NET REVENUES
------------
<S>                                                               <C>              <C>
Total revenues for reportable segments                            $ 493,926        $ 494,619
Other income for Partnership                                          4,986           17,188
Eliminations                                                             --          (10,095)
                                                                  ----------       ----------
     Total consolidated net revenues                              $ 498,912        $ 501,712
                                                                  ==========       ==========


INTEREST EXPENSE
----------------
Interest expense for reportable segments                          $  90,237        $  22,542
Interest expense for Partnership                                         --           73,391
                                                                  ----------       ----------
     Total interest expense                                       $  90,237        $  95,933
                                                                  ==========       ==========
DEPRECIATION AND AMORTIZATION
-----------------------------
Total depreciation and amortization for reportable segments       $ 110,535        $ 117,927
Depreciation and amortization for Partnership                         7,830            6,727
Eliminations                                                         (3,922)          (3,922)
                                                                  ----------       ----------
     Total depreciation and amortization                          $ 114,443        $ 120,732
                                                                  ==========       ==========
NET INCOME (LOSS)
-----------------
Total net income for reportable segments                          $  87,214        $ 136,124
Net loss for Partnership                                            (29,223)        (105,939)
Eliminations                                                        (14,153)          (6,174)
                                                                  ----------       ----------
     Total net income                                             $  43,838        $  24,011
                                                                  ==========       ==========

</TABLE>
















                                       12

<PAGE>


10. Segment Reporting  - Continued
    ------------------------------

<TABLE>
                                                                  Six Months Ended June 30,
                                                                  -------------------------
                                                                     2000             1999
                                                                     ----             ----
<CAPTION>

NET REVENUES
------------
<S>                                                               <C>              <C>
Total revenues for reportable segments                            $ 949,316        $ 951,452
Other income for Partnership                                         10,892           25,930
Eliminations                                                             --          (18,838)
                                                                  ----------        ----------
     Total consolidated net revenues                              $ 960,208         $ 958,544
                                                                  ==========        ==========

INTEREST EXPENSE
----------------
Interest expense for reportable segments                          $ 181,200        $  45,717
Interest expense for Partnership                                         --          145,710
                                                                  ----------       ----------
     Total interest expense                                       $ 181,200        $ 191,427
                                                                  ==========       ==========
DEPRECIATION AND AMORTIZATION
-----------------------------
Total depreciation and amortization for reportable segments       $ 220,707        $ 235,800
Depreciation and amortization for Partnership                        15,453           13,884
Eliminations                                                         (7,835)          (7,843)
                                                                  ----------       ----------
     Total depreciation and amortization                          $ 228,325        $ 241,841
                                                                  ==========       ==========
NET INCOME (LOSS)
-----------------
Total net income for reportable segments                          $ 132,517        $ 251,173
Net loss for Partnership                                            (78,232)        (218,101)
Eliminations                                                        (13,303)         (10,995)
                                                                  ----------       ----------
     Total net income                                             $  40,982        $  22,077
                                                                  ==========       ==========
</TABLE>


11.  Recent Accounting Pronouncement
     -------------------------------

     The  Emerging  Issues  Task  Force  ("EITF")  of the  Financial  Accounting
     Standards  Board  ("FASB")  has  reached a  consensus  on Issue  No.  00-1,
     "Applicability  of the Pro Rata Method of  Consolidation  to Investments in
     Certain  Partnerships  and Other  Unincorporated  Joint Ventures." The EITF
     reached  a  consensus  that  a  proportionate   gross  financial  statement
     presentation   (referred  to  as   "proportionate   consolidation"  in  the
     Partnership's  1999  Form  10-K  Notes  to  Financial  Statements)  is  not
     appropriate for an investment in an  unincorporated  legal entity accounted
     for by the equity  method of  accounting,  unless the investee is in either
     the  construction  industry  or an  extractive  industry  where  there is a
     longstanding practice of its use.

     The  consensus is  applicable to financial  statements  for annual  periods
     ending  after  June  15,  2000.  Upon  application  of the  consensus,  all
     comparative  financial  statements  shall be restated  to conform  with the
     consensus.  The  application  of  this  consensus  will  not  result  in  a
     restatement  of  previously   reported   partners'  equity  or  results  of
     operations,  but will result in a recharacterization or reclassification of
     certain financial  statements'  captions and amounts. The Partnership plans
     to restate its financial  statements using the equity method to account for
     its joint venture investments for the year ending December 31, 2000.



                                       13

<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  ("MD&A") 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.  A  discussion  of  certain  market  risks also
follows.  MD&A should be read in  conjunction  with the Financial  Statements in
Item 1 and the Cautionary Statements below.

Cautionary Statements
---------------------

Some  of  the  statements  included  in  this  Item 2 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 revision to these forward-looking statements that may be made to reflect any
future events or circumstances.

Any  forward-looking  statements  included in MD&A, 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  liquidity,  capital  resources and results of operations are
subject to a number of risks and uncertainties including, but not limited to the
following:  the ability of the  Partnership  to achieve  planned  revenues;  the
ability of the Partnership to make payments due under its debt  agreements;  the
ability of the  Partnership  to negotiate  and  maintain  terms with vendors and
service providers for operating expenses;  competitive pressures from other real
estate  companies,  including  large  commercial  and  residential  real  estate
companies,  which may  affect  the nature  and  viability  of the  Partnership's
business  strategy;  trends in the economy as a whole which may affect  consumer
confidence and demand for the types of rental property held by the  Partnership;
the  ability of the  Partnership  to predict  the  demand  for  specific  rental
properties;  the  ability  of the  Partnership  to attract  and retain  tenants;
availability  and costs of management and labor employed;  real estate occupancy
and  development  costs,   including  the  substantial  fixed  investment  costs
associated with renovations  necessary to obtain new tenants and retain existing
tenants;  and the risk of a major commercial  tenant defaulting on its lease due
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>



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

The  occupancy  levels  at the  Partnership's  properties  as of June 30 were as
follows:


                                                    Six Months Ended June 30,
                                                    -------------------------
                                                    2000                1999
                                                    ----                ----

Wholly-owned Properties
-----------------------

The Park at the Willows (1)                          77%                 94%
Park Place Apartments Phase II                       88%                 88%

Property Owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties Plus, Ltd.
----------------------------------------------
(Ownership % at June 30, 2000)
------------------------------

Blankenbaker Business Center 1A (31.34%)            100%                100%

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

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             Ended
                                                    June 30,          June 30,
                                                    --------          --------
                                                   2000    1999    2000    1999
                                                   ----    ----    ----    ----

Wholly-owned Properties
-----------------------

The Park at the Willows (1)                         74%     95%     73%     92%
Park Place Apartments Phase II                      87%     86%     84%     84%

Property Owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties Plus, Ltd.
----------------------------------------------
(Ownership % at June 30, 2000)
------------------------------

Blankenbaker Business Center 1A (31.34%)           100%    100%    100%    100%

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

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

                                              Three Months         Six Months
                                                 Ended               Ended
                                                June 30,            June 30,
                                                --------            --------
                                              2000     1999      2000     1999
                                              ----     ----      ----     ----

Wholly-owned Properties
-----------------------

The Park at the Willows                     $ 76,153 $ 89,274  $146,323 $173,413
Park Place Apartments Phase II              $339,795 $330,775  $662,278 $628,905

Property Owned in Joint Venture with
------------------------------------
NTS-Properties IV and NTS-Properties
------------------------------------
Plus, Ltd. (Ownership % at June 30, 2000)
-----------------------------------------
                                            $ 77,978 $ 74,571  $140,714 $149,135
Blankenbaker Business Center 1A (31.34%) (1)

(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 31.34%  during the three  months and six
     months ended June 30, 2000 and 1999.

                                       15

<PAGE>


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

Current  occupancy  levels are considered  adequate to continue the operation of
the Partnership's  properties without the need of any additional financing.  See
the  Consolidated  Cash Flows and  Financial  Condition  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 the results of  operations
for the  periods  ending  June 30,  2000  and  1999.  Items  that did not have a
material  impact on operations  for the periods  listed above have been excluded
from this discussion.

Operating expenses decreased  approximately $13,200 or 13% and $15,000 or 8% for
the three months and six months ended June 30, 2000,  respectively,  as compared
to the same periods in 1999,  mainly as a result of decreased  cable  expense at
Park  Place  Apartments  Phase II  (starting  in the  year  2000  residents  are
responsible  for  their  own  cable).  The  decrease  is also  due to  decreased
landscaping (switched to a monthly service contract in 2000) and utilities (Park
Place  Apartments  Phase III now shares in the common  area  expenses  with Park
Place  Apartments  Phases  I and II) at Park  Place  Apartments  Phase  II.  The
decrease  is  partially  offset  by  increased  landscaping  (switched  lawncare
providers)  and  increased  repairs  and  maintenance  costs (due to turnover of
apartments) at The Park at the Willows.

Operating expenses - affiliated  decreased  approximately  $10,200 or 8% for the
six months  ended June 30,  2000,  as compared to the same period in 1999,  as a
result of decreased  personnel  costs at Park Place  Apartments  Phase II due to
changes  in staff,  and  decreased  overhead  costs  allocated  at  Blankenbaker
Business  Center  1A due to  personnel  status  changes.  Operating  expenses  -
affiliated  are expenses  incurred  for  services  performed by employees of NTS
Development Company, an affiliate of the General Partner.

The loss on disposal of assets of approximately $19,900 for the six months ended
June 30,  2000,  is the result of the  retirement  of assets that were not fully
depreciated. The retirements were the result of exterior renovations at The Park
at The Willows.

Interest expense decreased  approximately $5,700 or 6% and $10,200 or 5% for the
three months and six months ended June 30,  2000,  respectively,  as compared to
the same periods in 1999.  This  decrease is due to principal  payments  made on
mortgages payable.

Professional and administrative  expenses decreased  approximately $5,300 or 20%
for the three  months  ended June 30,  2000,  as  compared to the same period in
1999.  This  decrease  is due  primarily  to  decreased  information  processing
services, legal fees related to tender offers and outside accounting fees.

Professional and administrative  expenses increased  approximately  $4,000 or 8%
for the six months ended June 30, 2000,  as compared to the same period in 1999,
as a result of increased general legal costs.


                                       16

<PAGE>

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

Professional and administrative  expenses - affiliated  increased  approximately
$6,800 or 43% and $6,300 or 18% for the three  months and six months  ended June
30, 2000, respectively,  as compared to the same periods in 1999, primarily as a
result of increased finance and accounting salary costs due to changes in staff.
Professional and administrative  expenses - affiliated are expenses incurred for
services performed by employees of NTS Development  Company, an affiliate of the
General Partner.

Depreciation and amortization  expense decreased  approximately $6,300 or 5% and
$13,500  or 6% for the  three  months  and  six  months  ended  June  30,  2000,
respectively,  as  compared to the same  periods in 1999,  as a result of assets
with shorter lives at the  Partnership's  residential  properties  having become
fully  depreciated.  The  decrease  is also a result  of the  sale of  clubhouse
furniture,  of which some was not fully  depreciated,  at Park Place  Apartments
Phase II. The  decrease is partially  offset by the  addition of fitness  center
renovation  costs,  landscaping  costs,  and the cost of a traffic light at Park
Place  Apartments  Phase II, and  exterior  renovation  costs at The Park at the
Willows.

Consolidated Cash Flows and Financial Condition
-----------------------------------------------

Cash flows provided by (used in):


                                                       Six Months Ended June 30,
                                                       -------------------------
                                                          2000           1999
                                                          ----           ----

Operating activities                                   $ 294,887      $ 242,292
Investing activities                                    (114,265)       (37,048)
Financing activities                                    (194,974)      (172,832)
                                                       ----------     ----------
     Net (decrease) increase in cash and equivalents   $ (14,352)     $  32,412
                                                       ==========     ==========

Net cash provided by operating activities increased approximately $52,600 or 22%
for the six months ended June 30, 2000,  as compared to the same period in 1999.
The increase in net cash provided by operating  activities was driven  primarily
by increased collection of accounts receivable and increased escrow for property
taxes in 2000.  The  increase  is  partially  offset by a decrease  in  accounts
payable in 2000.

The increase in net cash used in investing  activities  for the six months ended
June 30, 2000, as compared to the same period in 1999,  was mainly the result of
increased  capital  expenditures for the clubhouse,  fitness center and exterior
renovation  projects at Park Place Apartments Phase II and studio renovations at
The Park at the Willows.

The increase in net cash used in financing  activities  for the six months ended
June 30,  2000,  as compared to the same period in 1999,  was mainly a result of
reserving $15,000 for the Third Tender Offer (See Notes to Financial  Statements
- Note 7) that expires  August 15,  2000.  The increase is also due to increased
principal payments made on mortgages payable.



                                       17

<PAGE>


Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

During the six months ended June 30, 2000 and 1999,  the  Partnership  used cash
flow from operations and cash on hand to pay a 1% (annualized) cash distribution
of $56,135 (2000) and $57,145 (1999), respectively.  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  as  shown  on  the
Partnership's balance sheet) were $385,910 at June 30, 2000.

The table below  presents  that portion of the  distributions  that  represent a
return of capital on a GAAP  basis for the six  months  ended June 30,  2000 and
1999.


                                Net Income   Cash Distributions      Return of
                                Allocated         Declared            Capital
                                ---------         --------            -------

Limited Partners:
                    2000         $ 40,572          $ 55,574          $ 15,002
                    1999           21,856            56,574            34,718

General Partner:
                    2000         $    410          $    561          $    151
                    1999              221               571               350

The demand on future  liquidity  is  anticipated  to increase as a result of the
replacement of the roofs at Park Place Apartments Phase II (17 buildings) all of
which were  installed  using  shingles  produced by a single  manufacturer.  The
shingles  appear to contain  defects which may cause them to fail before the end
of their expected useful life. As the manufacturer has declared bankruptcy,  the
Partnership  does not expect to be able to recover  any of the costs of the roof
replacements.  The Partnership does not have sufficient  working capital to make
all of the roof  replacements at once and intends to make the replacements  over
the next 36 months.  The total costs of replacing  all of the roofs is estimated
to be  $340,000  ($20,  000  per  building).  As  of  June  30,  2000,  no  roof
replacements have been started.

On March  24,  2000,  the  Partnership  and  ORIG,  LLC.,  an  affiliate  of the
Partnership  (the  "Offerors"),  filed a tender offer (the "Third Tender Offer")
with the  Securities and Exchange  Commission,  commencing on March 27, 2000, to
purchase  5,000 of the  Partnership's  Limited  Partnership  Units at a price of
$6.00 per Unit as of the date of the Third Tender Offer.  Approximately  $48,000
($30,000  to  purchase  5,000  Units plus  approximately  $18,000  for  expenses
associated with the Third Tender Offer) is required to purchase all 5,000 Units.
The Third Tender Offer stated that the Partnership will purchase the first 2,500
Units  tendered and will fund its purchase and its portion of the expenses  from
cash reserves.  If more than 2,500 Units are tendered,  ORIG, LLC. will purchase
up to an  additional  2,500 Units.  If more than 5,000 Units are  tendered,  the
Offerors may choose to acquire the additional  Units on a pro rata basis.  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-

                                       18

<PAGE>


Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

Properties  Associates  VII, does not intend to  participate in the Third Tender
Offer. The Third Tender Offer was scheduled to expire on June 27, 2000.

On June 23, 2000, the  Partnership  and ORIG,  LLC.  filed an amendment,  to the
Third Tender Offer, with the Securities and Exchange Commission.  This amendment
supplements  and amends the Third Tender Offer to extend the expiration  date of
the Third  Tender  Offer to August  15,  2000 and to expand  the  definition  of
Offerors to include Mr. J.D.  Nichols and Mr. Brian F. Lavin,  each an affiliate
of the issuer. As of the date of this filing, 32,873 Units have been tendered.

In an  effort to  continue  to  improve  occupancy  levels at the  Partnership's
residential  properties,  the Partnership has an on-site leasing staff,  who are
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  apartments  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.

























                                       19

<PAGE>


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

Our primary risk  exposure  with regard to financial  instruments  is changes in
interest rates. All of the Partnership's debt bears interest at a fixed rate. At
June 30, 2000, a  hypothetical  100 basis point increase in interest rates would
result in an approximate $240,000 decrease in the fair value of debt.









































                                       20

<PAGE>


PART II.          OTHER INFORMATION
                  -----------------

Item 1.           Legal Proceedings
                  -----------------

                  Not applicable.

Item 2.           Changes in Securities
                  ---------------------

                  Not applicable.

Item 3.           Defaults Upon Senior Securities
                  -------------------------------

                  Not applicable.

Item 4.           Submission of Matters to a Vote of Security Holders
                  ---------------------------------------------------

                  Not applicable.

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

                  Not applicable.

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

                  a)       Exhibits:

                           Exhibit 27.      Financial Data Schedule

                  b)       Reports on Form 8-K:

                           Not applicable.















                                       21

<PAGE>

                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                              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
                                      Senior Vice President and
                                      Chief Financial Officer of
                                      NTS Capital Corporation

Date: August 11, 2000






                                       22

<PAGE>