Form 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                  |X|   Quarterly  Report Pursuant to Section 13
                        or 15(d) of the Securities  Exchange Act
                        of 1934. For the quarterly  period ended
                        September 30, 2000

                  |_|   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 000-19160

                      ATEL Cash Distribution Fund III, L.P.
             (Exact name of registrant as specified in its charter)

  California                                                       94-3100855
  ----------                                                       ----------
(State or other jurisdiction of                               (I. R. S. Employer
incorporation or organization)                               Identification No.)

           235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (415) 989-8800
       ------------------------------------------------------------------



Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by  Section13  or 15(d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                     Yes |X|
                                     No  |_|


                                       1
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                          Part I. FINANCIAL INFORMATION

Item 1.                        Financial Statements.


















<PAGE>

                                      2
                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                  BALANCE SHEET

                               SEPTEMBER 30, 2000
                                   (Unaudited)


                                     ASSETS




Cash and cash equivalents                                             $ 326,393

Accounts receivable                                                      59,080
                                                                ----------------
                                                                      $ 385,473
                                                                ================



                        LIABILITIES AND PARTNERS' CAPITAL



Accounts payable, general partners                                    $ 103,776
                                                                ----------------
Total liabilities                                                       103,776

Partners' capital:
     General Partners                                                   264,279
     Limited Partners                                                    17,418
                                                                ----------------
Total partners' capital                                                 281,697
                                                                ----------------
                                                                      $ 385,473
                                                                ================

                             See accompanying notes



                                       3

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                INCOME STATEMENTS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Nine Months Ended                Three Months Ended
                                                                     September 30,                     September 30,
                                                                     -------------                     -------------
                                                                2000              1999             2000             1999
                                                                ----              ----             ----             ----
Revenues:
<S>                                                            <C>                 <C>             <C>               <C>
Lease income:
   Gain on sales of assets                                     $ 2,253,471          $ 38,505                          $ 81,854
   Operating                                                        60,000         1,125,221                           271,883
   Direct financing                                                  3,438            60,793                            18,659
   Leveraged                                                             -            15,842                             5,280
Other                                                               70,917             3,991            $ 802            1,706
Interest income                                                     57,391           253,645           20,582           72,578
                                                           ---------------- ----------------- ---------------- ----------------
                                                                 2,445,217         1,497,997           21,384          451,960
                                                           ---------------- ----------------- ---------------- ----------------
Expenses:
Management fees                                                    117,699           114,822          114,699           33,632
Administrative cost reimbursements                                  95,488           155,774            9,427           68,332
Professional fees                                                   53,395            22,251            8,850            6,885
Other                                                               38,216            71,198           16,922            8,030
Depreciation                                                        36,625           637,679                -          205,924
Taxes                                                                9,360            49,014                -           11,670
Interest expense                                                     5,746            18,425            3,056            3,243
                                                           ---------------- ----------------- ---------------- ----------------
                                                                   356,529         1,069,163          152,954          337,716
                                                           ---------------- ----------------- ---------------- ----------------
Net income (loss)                                              $ 2,088,688         $ 428,834       $ (131,570)       $ 114,244
                                                           ================ ================= ================ ================
Net income (loss):
     General Partners                                             $ 20,887           $ 4,288         $ (1,316)         $ 1,142
     Limited Partners                                            2,067,801           424,546         (130,254)         113,102
                                                           ---------------- ----------------- ---------------- ----------------
                                                               $ 2,088,688         $ 428,834       $ (131,570)       $ 114,244
                                                           ================ ================= ================ ================
Net income (loss) per limited partnership unit                      $ 0.28            $ 0.06          $ (0.02)          $ 0.02
Weighted average number of units
   outstanding                                                   7,376,284         7,376,284        7,376,284        7,376,284
</TABLE>




                             See accompanying notes


                                       4

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                             NINE MONTH PERIOD ENDED
                               SEPTEMBER 30, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Limited Partners      General
                                       Units            Amount          Partners           Total
                                       -----            ------          --------           -----
<S>                                     <C>              <C>               <C>             <C>
Balance December 31, 1999               7,376,284        $1,449,619        $ 243,392       $1,693,011
Distributions to limited partners                        (3,500,002)               -       (3,500,002)
Net income                                                2,067,801           20,887        2,088,688
                                  ---------------- ----------------- ---------------- ----------------
Balance September 30, 2000              7,376,284          $ 17,418        $ 264,279        $ 281,697
                                  ================ ================= ================ ================
</TABLE>

                             See accompanying notes


                            STATEMENTS OF CASH FLOWS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 2000 AND 1999

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Nine Months Ended                Three Months Ended
                                                                     September 30,                     September 30,
                                                                     -------------                     -------------
                                                                2000              1999             2000             1999
                                                                ----              ----             ----             ----
Operating activities:
<S>                                                            <C>                 <C>             <C>               <C>
Net income (loss)                                              $ 2,088,688         $ 428,834       $ (131,570)       $ 114,244

Adjustments to reconcile net income (loss) to
   net cash provided by operations:
     Depreciation                                                   36,625           637,679                -          205,924
     Leveraged lease income                                              -           (15,842)               -           (5,280)
     Gain on sales of assets                                    (2,253,471)          (38,505)               -          (81,854)
Changes in operating assets and liabilities:
   Accounts receivable                                              25,009             1,996          193,794           27,838
   Accounts payable, General Partner                               103,776          (326,710)         103,776           12,664
   Accounts payable, other                                        (150,393)          (38,573)        (190,027)         (16,384)
   Accrued interest                                                      -            (1,363)               -             (349)
   Unearned operating lease income                                       -           (22,746)               -          (91,738)
                                                           ---------------- ----------------- ---------------- ----------------
Net cash provided by operations                                   (149,766)          624,770          (24,027)         165,065
                                                           ---------------- ----------------- ---------------- ----------------

Investing activities:
Proceeds from sales of equipment                                 3,303,599           999,366                -          262,498
Reduction in net investment in direct financing
   leases                                                                -           353,855                -          116,878
                                                           ---------------- ----------------- ---------------- ----------------
Net cash provided by investing activities                        3,303,599         1,353,221                -          379,376
                                                           ---------------- ----------------- ---------------- ----------------




                                       5

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                            STATEMENTS OF CASH FLOWS
                                   (CONTINUED)

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 2000 AND 1999

                                   (Unaudited)


                                                                   Nine Months Ended                Three Months Ended
                                                                     September 30,                     September 30,
                                                                     -------------                     -------------
                                                                2000              1999             2000             1999
                                                                ----              ----             ----             ----
Financing activities:
Distributions to limited partners                               (3,500,002)       (8,304,354)      (3,500,002)      (2,767,565)
Repayments of non-recourse debt                                    (57,291)         (328,915)               -          (70,840)
                                                           ---------------- ----------------- ---------------- ----------------
Net cash used in financing activities                           (3,557,293)       (8,633,269)      (3,500,002)      (2,838,405)
                                                           ---------------- ----------------- ---------------- ----------------

Net decrease in cash and cash equivalents                         (403,460)       (6,655,278)      (3,524,029)      (2,293,964)
Cash and cash equivalents at beginning
   of period                                                       729,853        11,294,942        3,850,422        6,933,628
                                                           ---------------- ----------------- ---------------- ----------------

Cash and cash equivalents at end of period                       $ 326,393        $4,639,664        $ 326,393       $4,639,664
                                                           ================ ================= ================ ================

Supplemental disclosures of cash flow
   information:
Cash paid for interest                                             $ 5,746          $ 18,425          $ 3,056          $ 3,243
                                                           ================ ================= ================ ================
</TABLE>






                             See accompanying notes






                                       6
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000
                                   (Unaudited)


1.  Interim financial statements:

The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the General Partners,  necessary to a fair statement of financial
position and results of operations for the interim periods  presented.  All such
adjustments are of a normal recurring nature.  These unaudited interim financial
statements  should be read in  conjunction  with the most recent  report on Form
10K.


2. Investment in leases:

The Partnership's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                             Depreciation
                                                              Expense or        Reclass-
                                           December 31,      Amortization     ifications &     September 30,
                                               1999           of Leases       Dispositions         2000
                                               ----           ---------      --------------        ----
<S>                                             <C>               <C>             <C>                     <C>
Net investment in operating leases              $ 735,458         $ (36,625)      $ (698,833)             $ -
Net investment in direct financing leases         348,795                 -         (348,795)               -
Net investment in leveraged leases                      -                 -                -                -
Equipment held for sale or lease                    2,500                 -           (2,500)               -
                                          ---------------- ----------------- ---------------- ----------------
                                              $ 1,086,753         $ (36,625)     $(1,050,128)             $ -
                                          ================ ================= ================ ================
</TABLE>

The following  schedule provides an analysis of the Partnership's  investment in
property on operating leases by major  classifications  as of December 31, 1999,
dispositions during the nine months ended September 30, 2000 and as of September
30, 2000.


<TABLE>
<CAPTION>
                                          December 31,                       September 30,
                                              1999          Dispositions          2000
                                              ----         --------------         ----
<S>                                           <C>              <C>                       <C>
Mining                                        $ 3,757,698      $(3,757,698)              $ -
                                        ------------------ ---------------- -----------------
                                                3,757,698       (3,757,698)                -
Less accumulated depreciation                  (3,022,240)       3,022,240                 -
                                        ------------------ ---------------- -----------------
                                                $ 735,458       $ (735,458)              $ -
                                        ================== ================ =================
</TABLE>


                                       7


<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000
                                   (Unaudited)


3.  Commitments, management and report of fees:

The terms of the  Agreement  of Limited  Partnership  provide  that the  General
Partners  and/or  Affiliates are entitled to receive  certain fees for equipment
acquisition, management and resale and for management of the Partnership.

The General Partners and/or  Affiliates  earned the following fees,  commissions
and reimbursements, pursuant to the Limited Partnership Agreement as follows:

                                               2000             1999
                                               ----             ----
Incentive and equipment management fees         $ 117,699        $ 114,822
Reimbursement of administrative costs              95,488          155,774
                                          ---------------- ----------------
                                                $ 213,187        $ 270,596
                                          ================ ================


4.  Partners' capital:

The Partnership Net Profits, Net Losses, and Tax Credits are to be allocated 99%
to the Limited Partners and 1% to the General Partners.

As more  fully  described  in the  Partnership  Agreement,  available  Cash from
Operations and Cash from Sales or Refinancing shall be distributed as follows:

First, 5% of  Distributions  of Cash from Operations to the General  Partners as
Incentive Management Compensation.

Second,  the balance to the Limited  Partners  until the Limited  Partners  have
received  aggregate  Distributions,  as  defined,  in an  amount  equal to their
Original  Invested  Capital,  as  defined,  plus  an  8%  per  annum  cumulative
(compounded daily) return on their Adjusted Invested Capital, as defined.

Third, the General Partners will receive as Incentive  Management  Compensation,
the following:

     (A)  10% of remaining Cash from Operations, as defined,

     (B) 15% of remaining Cash from Sales or Refinancing, as defined.

Fourth, the balance to the Limited Partners.







                                       8


<PAGE>

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

Capital Resources and Liquidity

As of June 30, 2000,  the  Partnership  disposed of the last of its lease assets
and ceased  operations  in its  primary  business,  equipment  leasing and sales
activities.

Funds which have been  received,  but which have not yet been  distributed,  are
invested in interest-bearing accounts.

The  Partnership's  primary  source of liquidity  during the first six months of
2000 were proceeds from sales of assets.

The Partnership currently has available adequate reserves to meet contingencies.

As  of  September  30,  2000,  the   Partnership   had  borrowed   approximately
$32,425,000,  all of which has been  repaid.  The General  Partners  expect that
there will be no additional borrowings.

No  commitments of capital have been or are expected to be made. As of September
30, 2000, there were no such commitments.

During  August  2000,  the  Partnership  made  a  liquidating   distribution  of
approximately $3,500,000,  which represented about 4.7% of the original invested
capital of the Partnership.


2000 vs. 1999:

During the nine month period ended September 30, 2000, the Partnership's primary
source of cash from  operating  activities  was lease  rents.  Lease  rents have
decreased compared to the prior year as a result of scheduled lease terminations
and asset sales in the last year.

Sources of cash from investing  activities  consisted of the proceeds from sales
of lease assets. Proceeds from sales of assets increased compared to 1999. Asset
sales are not expected to be consistent  from one period to another.  Cash flows
from direct  financing  leases have decreased as a result of lease  terminations
and asset sales.

In 2000 and  1999,  there  were no  financing  sources  of cash.  Repayments  of
non-recourse  debt have decreased due to scheduled debt payments.  Distributions
to limited  partners have decreased.  The Partnership made only one distribution
to the limited partners in 2000.


Results of Operations

Operations  in the third  quarter  of 2000  resulted  in a net loss of  $131,570
compared to net income of $114,244 in 1999. Net income for the first nine months
of 2000 was $2,088,688 compared to $428,834 in 1999.

2000 vs. 1999:

Operating  lease  revenues  decreased  by  $1,065,221  (a decrease of about 95%)
compared to 1999 and depreciation  expense  decreased by $601,054 (a decrease of
about  94%).  Both of  these  decreases  are due to  scheduled  terminations  of
operating  leases  over the last year and the  subsequent  sales of the  related
assets.

Interest expense has decreased due to scheduled reductions of debt balances.

                                       9

<PAGE>

                            PART II OTHER INFORMATION

Item 1.                        LEGAL PROCEEDINGS.

On December  31,  1997,  Quaker Coal  Company  requested a  moratorium  on lease
payments from January  through  March 1998. No lease  payments were made through
June of 1998. As a result,  the General  Partner  declared the lease in default.
Subsequently,  the lessee made the outstanding  payments,  however,  the General
Partner  refused to waive the default and insisted on  additional  damages.  The
General  Partner sued the lessee for damages and was awaiting  judgment from the
court when on June 16,  2000,  the lessee filed for  protection  under the U. S.
Bankruptcy Act.

The  Partnership has filed a stipulation for relief from stay to allow the court
to issue its  ruling,  and has filed a request to  participate  on the  Official
Committee of Unsecured  Creditors.  The  Partnership has succeeded upon securing
the return of its equipment  which it is currently  liquidating.  The amounts of
these  damages have not been included in the  financial  statements  included in
Item 1 of this report,  however the  liklihood of recovery of amounts  above the
liquidation of the equipment is speculative.

Item 2.                        CHANGES IN SECURITIES.

                                 Inapplicable.

Item 3.                        DEFAULTS UPON SENIOR SECURITIES.

                                 Inapplicable.

Item 4.                        SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                               HOLDERS.
                                 Inapplicable.

Item 5.                        OTHER INFORMATION.

                                 Inapplicable.

Item 6.                        EXHIBITS AND REPORTS ON FORM 8-K.

                            (a)Documents filed as a part of this report
                            1.   Financial Statements
                                 Included in Part I of this report:

                                 Balance Sheet, September 30, 2000.

                                 Income  statements for the nine and three month
                                 periods ended September 30, 2000 and 1999.


                                 Statement of changes in  partners'  capital for
                                 the nine month period ended September 30, 2000.


                                 Statements of cash flows for the nine and three
                                 month periods ended September 30, 2000 and
                                 1999.


                                 Notes to the Financial Statements

                            2.   Financial Statement Schedules
                                 All other schedules for which provision is made
                                 in the applicable accounting regulations of the
                                 Securities and Exchange Commission are not
                                 required under the related instructions or are
                                 inapplicable, and therefore have been omitted.

                            (b)  Report on Form 8-K
                                 None

                                       10
<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.


Date:
November 9, 2000

                      ATEL CASH DISTRIBUTION FUND III, L.P.
                                  (Registrant)





                                    By:   /s/ A. J. BATT
                                        ---------------------------------------
                                        A. J. Batt
                                        General Partner of registrant



                                    By:   /s/ DEAN L. CASH
                                        ---------------------------------------
                                        Dean L. Cash
                                        General Partner of registrant



                                    By:   /s/ PARITOSH K. CHOKSI
                                        ---------------------------------------
                                        Paritosh K. Choksi
                                        Principal financial officer
                                        of registrant



                                    By:   /s/ DONALD E. CARPENTER
                                        ---------------------------------------
                                        Donald E. Carpenter
                                        Principal accounting
                                        officer of registrant