<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                  March 31, 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 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)


                                 (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.

                                                                YES  X   NO
                                                                   -----   -----

<PAGE>


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


                                                                           Pages
                                                                           -----

                                     PART I

Item 1. Financial Statements

            Balance Sheets and Statement of Partners' Equity
              as of March 31, 2000 and December 31, 1999                       3

            Statements of Operations
             for the three months ended March 31, 2000 and 1999                4

            Statements of Cash Flows
             for the three months ended March 31, 2000 and 1999                5

            Notes To Financial Statements                                   6-10

Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations                            11-17

Item 3. Quantitative and Qualitative Disclosures About Market Risk            17


                                     PART II

Item 1. Legal Proceedings                                                     18

Item 2. Changes in Securities                                                 18

Item 3. Defaults Upon Senior Securities                                       18

Item 4. Submission of Matters to a Vote of Security Holders                   18

Item 5. Other Information                                                     18

Item 6. Exhibits and Reports on Form 8-K                                      18

Signatures                                                                    19

                                       2

<PAGE>


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

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

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

<CAPTION>

                                                 As of              As of
                                             March 31, 2000   December 31, 1999*
                                             --------------   ------------------
                                              (Unaudited)
ASSETS
------
<S>                                           <C>                    <C>
Cash and equivalents                          $   379,289            $   400,262
Cash and equivalents - restricted                  56,827                 40,080
Accounts receivable                                 7,433                 21,771
Land, buildings and amenities, net              9,620,809              9,688,537
Other assets                                      137,561                116,993
                                              -----------            -----------

  TOTAL ASSETS                                $10,201,919            $10,267,643
                                              ===========            ===========

LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Mortgages payable                             $ 4,792,688            $ 4,854,355
Accounts payable                                  102,236                 97,355
Security deposits                                  26,350                 26,475
Other liabilities                                  46,756                 24,646
                                              -----------            -----------
  TOTAL LIABILITIES                             4,968,030              5,002,831

COMMITMENTS AND CONTINGENCIES (Note 8)

Partners' equity                                5,233,889              5,264,812
                                              -----------            -----------
  TOTAL LIABILITIES AND PARTNERS' EQUITY      $10,201,919            $10,267,643
                                              ===========            ===========
</TABLE>

<TABLE>

                                     Limited            General
                                     Partners           Partner        Total
                                     --------           -------        -----
<CAPTION>

PARTNERS' EQUITY
----------------
<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 loss - current year                 (2,827)             (29)         (2,856)
Cash distributions declared to
 date                               (2,661,597)         (26,885)     (2,688,482)
Repurchase of Limited
 Partnership Units                    (415,080)            --          (415,080)
                                   ------------     ------------     -----------
Balances at March 31, 2000        $  5,286,657     $    (52,768)    $  5,233,889
                                   ============     ============     ===========
</TABLE>


* Reference  is made to the  audited  financial  statements  in the Form 10-K as
  filed with the 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
                            ------------------------

<CAPTION>

                                                     Three Months Ended
                                                          March 31,
                                                          ---------
                                                         (Unaudited)

                                                 2000                    1999
                                                 ----                    ----


REVENUES:
---------
<S>                                           <C>                     <C>
 Rental income                                $ 449,620               $ 465,661
 Interest and other income                        7,557                   2,905
 Gain on sale of assets                           4,118                    --
                                               ---------              ----------
                                                461,295                 468,566
                                               ---------              ----------
EXPENSES:
---------
 Operating expenses                              81,911                  95,417
 Operating expenses - affiliated                 55,880                  66,935
 Loss on disposal of assets                      19,843                    --
 Interest expense                                90,963                  95,495
 Management fees                                 24,024                  22,984
 Real estate taxes                               27,293                  27,136
 Professional and administrative
  expenses                                       30,763                  21,378
 Professional and administrative
  expenses - affiliated                          19,592                  20,049
 Depreciation and amortization                  113,882                 121,108
                                               ---------              ----------
                                                464,151                 470,502
                                               ---------              ----------

Net loss                                      $  (2,856)              $  (1,936)
                                               =========               =========
Net loss allocated to the
 Limited Partners                             $  (2,827)              $  (1,917)
                                               =========               =========
Net loss per Limited
 Partnership Unit                             $   (0.01)              $    --
                                               =========               =========
Weighted average number of
 Limited Partnership Units                      555,736                 573,514
                                               =========               =========

</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
                            ------------------------

<CAPTION>


                                                         Three Months Ended
                                                               March 31,
                                                               ---------
                                                              (Unaudited)

                                                         2000           1999
                                                         ----           ----

CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
<S>                                                   <C>            <C>
Net loss                                              $  (2,856)     $  (1,936)
Adjustments to reconcile net loss
 to net cash provided by
 operating activities:
  Loss on disposal of assets                             19,843           --
  Depreciation and amortization                         113,882        121,108
  Changes in assets and liabilities:
   Cash and equivalents - restricted                     (1,747)        (5,254)
   Accounts receivable                                   14,338        (18,966)
   Other assets                                         (21,920)       (16,259)
   Accounts payable                                       4,881         10,663
   Security deposits                                       (125)           800
   Other liabilities                                     22,110         27,132
                                                       ---------      ---------
  Net cash provided by operating activities             148,406        117,288
                                                       ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Additions to land, buildings and amenities              (64,645)       (25,466)
                                                       ---------      ---------
  Net cash used in investing activities                 (64,645)       (25,466)
                                                       ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Cash and equivalents - restricted                       (15,000)        60,000
Principal payments on mortgages payable                 (61,667)       (57,989)
Cash distributions                                      (28,067)       (29,079)
Repurchase of Limited Partnership Units                    --          (60,000)
                                                       ---------      ---------
  Net cash used in financing activities                (104,734)       (87,068)
                                                       ---------      ---------
  Net (decrease) increase in cash and equivalents       (20,973)         4,754

CASH AND EQUIVALENTS, beginning of period               400,262        398,001
                                                       ---------      ---------
CASH AND EQUIVALENTS, end of period                   $ 379,289      $ 402,755
                                                       =========      =========

Interest paid on a cash basis                         $  91,464      $ 129,057
                                                       =========      =========

</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  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
three months ended March 31, 2000 and 1999.

1.        Concentration of Credit Risk
          ----------------------------

          NTS-Properties VII, Ltd. owns and operates, through a joint venture, a
          commercial  rental property in Louisville,  Kentucky.  The sole tenant
          which occupies 100% of the property is a business which has operations
          in the  Louisville  area.  The  Partnership  also  owns  and  operates
          residential rental properties in Louisville and Lexington, Kentucky.

2.        Reclassifications of 1999 Financial Statements
          ----------------------------------------------

          Certain  reclassifications  have  been  made  to the  March  31,  1999
          financial  statements to conform with March 31, 2000  classifications.
          These   reclassifications   have  no  effect  on  previously  reported
          operations.

3.        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  Notes  to
          Financial Statements "6. Tender Offer").

4.        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 10-30 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 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 March 31, 2000
          and 1999 did not result in any impairment loss.


                                       6


<PAGE>

5.        Mortgages Payable
          -----------------

          Mortgages payable consist of the following:

                                                  March 31,         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.                          $   3,846,899        $   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.                                945,789              977,957
                                               ------------         ------------
                                              $   4,792,688        $   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 $4,643,000.

6.        Tender Offer
          ------------

          On March 24, 2000, the Partnership and ORIG, LLC., an affiliate of the
          Partnership (the "bidders"),  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  bidders  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-Properties  Associates
          VII, does not intend to  participate  in the Third Tender  Offer.  The
          Third Tender Offer will expire on June 27, 2000 unless extended.

7.        Related Party Transactions
          --------------------------

          Property  management  fees of $24,024 and $22,984 for the three months
          ended  March  31,  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.

                                        7

<PAGE>

7.        Related Party Transactions - Continued
          --------------------------------------

          The  Partnership  has  incurred  $2,422 and $548 for the three  months
          ended March 31, 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 three months ended March 31, 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.


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


                                               2000              1999
                                               ----              ----

            Leasing                         $  5,554           $  8,302
            Administrative                    38,046             25,630
            Property Management               31,605             52,073
            Other                                271              1,527
                                             -------            -------
                                            $ 75,476           $ 87,532
                                            ========           ========

          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  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.        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.

9.        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

                                        8

<PAGE>


9.        Segment Reporting - Continued
          -----------------------------

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

<TABLE>

                                            Three Months Ended March 31, 2000
                                            ---------------------------------

<CAPTION>


                                           Residential    Commercial     Total
                                           -----------    ----------     -----
<S>                                        <C>            <C>           <C>
Rental income                                 $386,913     $ 62,707     $449,620
Interest and other income                        1,622           29        1,651
Gain on sale of assets                           4,118         --          4,118
                                              --------     --------     --------

Total net revenues                            $392,653     $ 62,736     $455,389
                                              ========     ========     ========

Operating expenses and
 operating expenses - affiliated               129,884        7,907      137,791
Loss on disposal of assets                      19,843         --         19,843
Interest expense                                70,515       20,448       90,963
Management fees                                 20,073        3,951       24,024
Real estate taxes                               22,828        4,465       27,293
Depreciation and amortization                   87,271       22,902      110,173
                                              --------     --------     --------

Net income                                    $ 42,239     $  3,063     $ 45,302
                                              ========     ========     ========
</TABLE>
<TABLE>

                                            Three Months Ended March 31, 1999
                                            ---------------------------------
<CAPTION>


                                          Residential    Commercial      Total
                                          -----------    ----------      -----

<S>                                         <C>           <C>           <C>
Rental income                               $391,097      $ 74,564      $465,661
Interest and other income                      2,905          --           2,905
                                            --------      --------      --------
Total net revenues                          $394,002      $ 74,564      $468,566
                                            ========      ========      ========


Operating expenses and
 operating expenses - affiliated             151,273        11,079       162,352
Interest expense                                --          23,175        23,175
Management fees                               18,743         4,241        22,984
Real estate taxes                             22,710         4,426        27,136
Depreciation and amortization                 94,971        22,902       117,873
                                            --------      --------      --------
Net income                                  $106,305      $  8,741      $115,046
                                            ========      ========      ========

</TABLE>


                                        9
<PAGE>


9.        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  ended  March 31, 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
                                                          March 31,
                                                          ---------
<CAPTION>


                                                     2000                1999
                                                     ----                ----

NET REVENUES
------------
<S>                                               <C>                 <C>
Total revenues for reportable segments            $ 455,389           $ 468,566
Other income for Partnership                          8,969               8,742
Eliminations                                         (3,063)             (8,742)
                                                   ---------           ---------
Total consolidated net revenues                   $ 461,295           $ 468,566
                                                   =========           =========

INTEREST EXPENSE
----------------
Interest expense for reportable segments          $  90,963           $  23,175
Interest expense for Partnership                       --                72,320
                                                   ---------           ---------
Total interest expense                            $  90,963           $  95,495
                                                   =========           =========

DEPRECIATION AND AMORTIZATION
-----------------------------
Total depreciation and amortization for
 reportable segments                              $ 110,173           $ 117,873
Depreciation and amortization for
 Partnership                                          7,623               7,157
Eliminations                                         (3,914)             (3,922)
                                                   ---------           ---------
Total depreciation and amortization               $ 113,882           $ 121,108
                                                   =========           =========

NET INCOME (LOSS)
-----------------
Total net income for reportable segments          $  45,302           $ 115,046
Net loss for Partnership                            (49,009)           (112,162)
Eliminations                                            851              (4,820)
                                                   ---------           ---------
Total net loss                                    $  (2,856)          $  (1,936)
                                                   =========           =========

</TABLE>

                                       10

<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 revisions 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 judgment,  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 HealthPlan 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.



                                       11

<PAGE>

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

The  occupancy  levels at the  Partnership's  properties  as of March 31 were as
follows:


                                                    2000                1999
                                                    ----                ----

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

   The Park at the Willows (1)                       73%                 96%

   Park Place Apartments Phase II                    83%                 83%

   Property Owned in Joint Venture with
   ------------------------------------
   NTS-Properties IV and NTS-Properties Plus Ltd.
   ----------------------------------------------
   (Ownership % at March 31, 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 ended March 31 were as follows:


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


                                                   2000                1999
                                                   ----                ----

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

   The Park at the Willows (1)                      72%                  90%

   Park Place Apartments Phase II                   82%                  82%

   Property Owned in Joint Venture with
   ------------------------------------
   NTS-Properties IV and NTS-Properties Plus Ltd.
   ----------------------------------------------
   (Ownership % at March 31, 2000)
   -------------------------------

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

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



                                       12

<PAGE>

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

Rental and other income generated by the Partnership's  properties for the three
months ended March 31, 2000 and 1999 was as follows:

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


                                                       2000              1999
                                                       ----              ----

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

   The Park at the Willows                           $  70,170        $  91,361

   Park Place Apartments Phase II                    $ 322,483        $ 302,641

   Property Owned in Joint Venture with
   ------------------------------------
   NTS-Properties IV and NTS-Properties Plus Ltd.
   ----------------------------------------------
   (Ownership % at March 31, 2000)
   -------------------------------

   Blankenbaker Business Center 1A (31.34%) (1)      $  62,736         $ 74,564

   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 ended March 31, 2000 and 1999.

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 results of  operations  for
the periods  ending March 31, 2000 and 1999.  Items that did not have a material
impact on operations  for the periods  listed above have been excluded from this
discussion.

Rental income decreased  approximately  $16,000 or 3% for the three months ended
March 31, 2000, as compared to the same period in 1999, as a result of decreased
average  occupancy  levels at The Park at the Willows and decreased  common area
expense  reimbursements  at  Blankenbaker  Business  Center  1A.  The  lease  at
Blankenbaker Business Center 1A provides for the tenant to contribute toward the
payment of increases in common area maintenance expenses,  insurance,  utilities
and real estate taxes.  These decreases are partially offset by increased rental
rates at Park Place Apartments Phase II.

Operating expenses decreased  approximately  $13,500 or 14% for the three months
ended March 31, 2000, as compared to the same period in 1999, mainly as a result
of decreased  cable expense at Park Place  Apartments  Phase II (starting in the
year 2000 residents are now  responsible  for their own cable).  The decrease is
partially offset by increased  repairs and maintenance  costs at The Park at the
Willows due to turnover of units and increased  landscaping  costs at Park Place
Apartments Phase II and Blankenbaker Business Center 1A.

                                       13

<PAGE>

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

Operating expenses - affiliated decreased  approximately  $11,000 or 16% for the
three months ended March 31, 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 of the  Partnership,  on behalf of
the Partnership.

The loss on disposal  of assets of  approximately  $19,800 for the three  months
ended  March 31,  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.

Professional and administrative  expenses increased  approximately $9,400 or 44%
for the three  months  ended March 31,  2000,  as compared to the same period in
1999.  This  increase  is due  primarily  to  increased  legal costs and outside
accounting costs.

Depreciation and amortization  expense decreased  approximately $7,200 or 6% for
the three months  ended March 31, 2000,  as compared to the same period in 1999,
as a result of a portion of the assets with shorter  lives at the  Partnership's
residential  properties having become fully depreciated.  The decrease is also a
result of the  retirement  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  equipment,  net of  retirements,  at  Park  Place
Apartments Phase II.

Depreciation  is computed  using the  straight-line  method  over the  estimated
useful  lives of the assets  which are 10-30 years for land  improvements,  5-30
years  for  buildings  and  improvements,  5-30  years  for  amenities  and  the
applicable  lease  term  for  tenant  improvements.  The  aggregate  cost of the
Partnership's properties for Federal tax purposes is approximately $13,920,000.

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

Cash flows provided by (used in):


                                              2000                       1999
                                              ----                       ----

   Operating activities                    $ 148,406                  $ 117,288
   Investing activities                      (64,645)                   (25,466)
   Financing activities                     (104,734)                   (87,068)
                                            ---------                  ---------
   Net (decrease) increase in cash and
    equivalents                            $ (20,973)                 $   4,754
                                            =========                  =========

Net cash provided by operating activities increased approximately $31,100 or 26%
for the three  months  ended March 31,  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 in the first quarter
2000 as compared to the first quarter in 1999.

                                       14

<PAGE>


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

The increase in net cash used in investing activities in the first quarter 2000,
as  compared  to the first  quarter  1999,  was mainly  the result of  increased
capital  expenditures for the clubhouse and fitness center renovation project at
Park Place Apartments Phase II.

The increase in net cash used in financing activities in the first quarter 2000,
as compared to the first quarter 1999, was mainly a result of reserving  $15,000
for the Third  Tender  Offer  (See  Notes to  Financial  Statements  "6.  Tender
Offer")that expires June 27, 2000.

During the three months ended March 31, 2000 and 1999, the Partnership used cash
flow from operations and cash on hand to pay a 1% (annualized) cash distribution
of $28,067 (2000) and $28,573 (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 $379,289 at March 31, 2000.

The table below  presents  that portion of the  distributions  that  represent a
return of capital on a Generally  Accepted  Accounting  Principle  basis for the
three months ended March 31, 2000 and 1999.


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

   Limited Partners:
          2000                $  (2,827)        $   27,787         $   27,787
          1999                   (1,917)            28,287             28,287

   General Partner:
          2000                $     (29)        $      280         $      280
          1999                      (19)               286                286

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).




                                       15

<PAGE>

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

On March  24,  2000,  the  Partnership  and  ORIG,  LLC.,  an  affiliate  of the
Partnership  (the  "bidders"),  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
bidders 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-Properties  Associates
VII, does not intend to participate in the Third Tender Offer.  The Third Tender
Offer will expire on June 27, 2000 unless extended.

In an effort to continue to improve occupancy 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  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.

Year 2000
---------

During  1999,  all  divisions  of  NTS  Corporation,   including  NTS-Properties
Associates  VII,  the General  Partner of the  Partnership,  reviewed the effort
necessary  to  prepare  NTS'  information   systems  (IT)  and   non-information
technology  with embedded  technology  (ET) for the Year 2000.  The  information
technology  solutions  were  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  development  during the
decade of the  1990's.  NTS'  property  management  staff  surveyed  vendors  to
evaluate  embedded  technology in its alarm systems,  HVAC  controls,  telephone
systems and other computer associated  facilities.  Some equipment was replaced,
while others had circuitry upgrades.

In 1999, the PILOT software system,  purchased in the early 1990's, was replaced
by a windows based network system both for NTS' headquarters functions and other
locations.  The real estate accounting system developed,  sold, and supported by
the Yardi Company of Santa Barbara, California was selected to replace PILOT.




                                       16

<PAGE>

Year 2000 - Continued
---------------------

The Yardi system was fully  implemented and operational as of December 31, 1999.
NTS' system for residential   apartment  locations was converted to GEAC's Power
Site System earlier in 1998.  There have been no Year 2000 related problems with
either system.

The cost of these advances in NTS' systems  technology are not all  attributable
to the Year 2000 issue  since NTS had already  identified  the need to move to a
network based system regardless of the Year 2000. The Partnership's share of the
costs involved were  approximately  $9,000 in 1998 and approximately  $36,000 in
1999.  These costs  include  primarily the purchase,  lease and  maintenance  of
hardware and software.

At the date of this filing the  Partnership  did not experience any  significant
operating issues relative to the Year 2000 issue. Despite diligent  preparation,
unanticipated  third-party  failures,  inability of our tenants to pay rent when
due, more general public  infrastructure  failures or failure of our remediation
efforts  as  planned  could have a  material  adverse  impact on our  results of
operations, financial conditions and/or cash flows in 2000 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. At
March 31, 2000, a hypothetical  100 basis point increase in interest rates would
result in approximately $246,000 decrease in the fair value of debt.



                                       17

<PAGE>


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

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

        None.

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

        None.

Item 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.





                                       18


<PAGE>

                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  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
                                     Senior Vice President and
                                     Chief Financial Officer of
                                     NTS Capital Corporation




Date: May 12, 2000

                                       19