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, 1997

      |_|   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 Section 13 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  |_|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


<PAGE>

                          Part I. FINANCIAL INFORMATION

Item 1.                     Financial Statements.


<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                 BALANCE SHEETS

                               SEPTEMBER 30, 1997
                                   (Unaudited)


                                     ASSETS




Cash and cash equivalents                                            $3,315,738

Accounts receivable                                                     508,715

Investment in leases                                                 19,096,379
                                                                ----------------
                                                                    $22,920,832
                                                                ================



                        LIABILITIES AND PARTNERS' CAPITAL



Non-recourse debt                                                    $3,165,311
Accrued interest                                                         29,135
Accounts payable:
     General Partners                                                   124,985
     Other                                                              124,197
Unearned operating lease income                                         259,038
                                                                ----------------
Total liabilities                                                     3,702,666

Partners' capital:
     General Partners                                                   145,367
     Limited Partners                                                19,072,799
                                                                ----------------
Total partners' capital                                              19,218,166
                                                                ----------------
                                                                    $22,920,832
                                                                ================

                             See accompanying notes





<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                INCOME STATEMENTS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Nine Months Ended                  Three Months Ended
                                                                     September 30,                       September 30,
                                                               1997              1996               1997              1996
<S>                                                           <C>                <C>                  <C>             <C>       
Revenues:
Lease income:
   Operating                                                  $5,647,733         $7,580,444         $1,661,728        $2,472,318
   Direct financing                                              228,725            339,307             62,548           104,253
   Leveraged                                                      29,461             63,773              7,365            21,258
   Gain on sales of assets                                       608,992            902,477                668           720,598
Other                                                              1,701                993                951             1,185
Interest income                                                   92,500             41,678             38,724            15,864
                                                          ---------------   ----------------   ----------------  ----------------
                                                               6,609,112          8,928,672          1,771,984         3,335,476
                                                          ---------------   ----------------   ----------------  ----------------
Expenses:
Depreciation                                                   3,609,021          5,507,064          1,025,491         1,705,699
Interest expense                                                 259,436            516,778             59,244           126,999
Management fees                                                  415,165            537,724            121,004           164,227
Administrative cost reimbursements                               192,612            181,917             67,634            72,993
Professional fees                                                 26,538             35,266             13,840            13,662
Provision for losses                                              43,337             90,212              9,242            34,330
Taxes                                                             75,738             47,579              2,006              (399)
Other                                                             77,090             61,163             12,589            22,462
                                                          ---------------   ----------------   ----------------  ----------------
                                                               4,698,937          6,977,703          1,311,050         2,139,973
                                                          ---------------   ----------------   ----------------  ----------------
Income before extraordinary item                               1,910,175          1,950,969            460,934         1,195,503
Extraordinary gain on early extinguishment of debt                     -             97,608                  -            97,608
                                                          ---------------   ----------------   ----------------  ----------------
Net income                                                    $1,910,175         $2,048,577           $460,934        $1,293,111
                                                          ===============   ================   ================  ================
Net income:
     General Partners                                            $19,102            $20,486             $4,609           $12,931
     Limited Partners                                          1,891,073          2,028,091            456,325         1,280,180
                                                          ---------------   ----------------   ----------------  ----------------
                                                              $1,910,175         $2,048,577           $460,934        $1,293,111
                                                          ===============   ================   ================  ================
Income before extraordinary item per limited
   partnership unit                                                $0.26              $0.26              $0.06             $0.16
Extraordinary gain on early extinguishment of
   debt per limited partnership unit                                -                  0.01               -                 0.01
                                                          ---------------   ----------------   ----------------  ----------------
Net income per limited partnership unit                            $0.26              $0.27              $0.06             $0.17
                                                          ===============   ================   ================  ================
Weighted average number of units
   outstanding                                                 7,376,284          7,377,151          7,376,284         7,376,284
</TABLE>






                             See accompanying notes

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                             NINE MONTH PERIOD ENDED
                               SEPTEMBER 30, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Limited Partners        General
                                      Units             Amount            Partners            Total
<S>                                    <C>              <C>                   <C>            <C>        
Balance December 31, 1996              7,376,284        $22,955,215           $126,265       $23,081,480
Distributions to limited partners                        (5,773,489)                 -        (5,773,489)
Net income                                                1,891,073             19,102         1,910,175
                                  ---------------   ----------------   ----------------  ----------------
Balance September 30, 1997             7,376,284        $19,072,799           $145,367       $19,218,166
                                  ===============   ================   ================  ================

</TABLE>










                             See accompanying notes

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                            STATEMENTS OF CASH FLOWS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                  Nine Months Ended                  Three Months Ended
                                                                    September 30,                       September 30,
                                                               1997              1996               1997              1996
                                                               ----              ----               ----              ----
Operating activities:
<S>                                                           <C>                <C>                  <C>             <C>       
Net income                                                    $1,910,175         $2,048,577           $460,934        $1,293,111

Adjustments to reconcile net income to net cash provided 
   by operations:
     Depreciation                                              3,609,021          5,507,064          1,025,491         1,705,699
     Leveraged lease income                                      141,883            (50,106)            (6,809)          (17,214)
     Gain on sales of assets                                    (608,992)          (902,477)              (668)         (720,598)
     Provision for losses                                         43,337             90,212              9,242            34,330
     Extraordinary gain on early extinguishment of
        non-recourse debt                                              -            (97,608)                 -           (97,608)
Changes in operating assets and liabilities:
   Accounts receivable                                           312,765            148,964           (279,348)         (120,258)
   Accounts payable, General Partner                              17,396              6,737             75,888            (4,479)
   Accounts payable, other                                      (135,245)           (68,431)          (103,650)           24,483
   Accrued interest                                              (31,027)           (30,621)            10,403             7,812
   Deposits due to lessees                                             -            (75,340)                 -           (75,340)
   Unearned operating lease income                                44,996            (81,854)           (82,097)         (177,352)
                                                          ---------------   ----------------   ----------------  ----------------
Net cash provided by operations                                5,304,309          6,495,117          1,109,386         1,852,586
                                                          ---------------   ----------------   ----------------  ----------------

Investing activities:
Proceeds from sales of equipment                               3,012,880          3,670,704            669,447         2,644,955
Reduction in net investment in direct financing
   leases                                                        908,501          1,193,581            301,041           325,976
Purchases of equipment on direct finance
   leases                                                              -           (120,000)                 -                 -
Principal payments received on notes
   receivable                                                          -             33,646                  -            11,215
                                                          ---------------   ----------------   ----------------  ----------------
Net cash provided by investing activities                      3,921,381          4,777,931            970,488         2,982,146
                                                          ---------------   ----------------   ----------------  ----------------
</TABLE>


<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                            STATEMENTS OF CASH FLOWS
                                   (CONTINUED)

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Nine Months Ended                  Three Months Ended
                                                                    September 30,                       September 30,
                                                               1997              1996               1997              1996
                                                               ----              ----               ----              ----
<S>                                                           <C>                <C>                <C>               <C>       
Financing activities:
Repayments of non-recourse debt                               (2,903,015)        (4,234,972)          (452,855)       (1,840,698)
Repurchases of units                                                   -             (8,608)                 -                 -
Distributions to limited partners                             (5,773,489)        (6,999,903)        (1,844,118)       (2,212,106)
                                                          ---------------   ----------------   ----------------  ----------------

Net cash used in financing activities                         (8,676,504)       (11,243,483)        (2,296,973)       (4,052,804)
                                                          ---------------   ----------------   ----------------  ----------------
Net increase (decrease) in cash and cash
   equivalents                                                   549,186             29,565           (217,099)          781,928
Cash and cash equivalents at beginning
   of period                                                   2,766,552          1,874,774          3,532,837         1,122,411
                                                          ---------------   ----------------   ----------------  ----------------

Cash and cash equivalents at end of period                    $3,315,738         $1,904,339         $3,315,738        $1,904,339
                                                          ===============   ================   ================  ================

Supplemental disclosures of cash flow information:

Cash paid for interest                                          $259,436           $516,778            $59,244          $126,999
                                                          ===============   ================   ================  ================

Supplemental schedule of non-cash transactions:

Gain on extinguishment of non-recourse debt                                         $97,608                              $97,608
                                                                            ================                     ================
</TABLE>

                             See accompanying notes

<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997
                                   (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,
                                           1996             Additions          of Leases         Dispositions         1997
                                           ----             ---------          ---------         ------------         ----
<S>                                        <C>                  <C>             <C>                <C>               <C>        
Net investment in operating
   leases                                  $21,853,800                          ($3,583,577)       ($1,938,942)      $16,331,281
Net investment in direct
   financing leases                          3,680,949                             (908,501)          (174,962)        2,597,486
Net investment in leveraged
   leases                                      757,654                             (141,883)                 -           615,771
Equipment held for sale or lease               419,898                              (25,444)          (289,984)          104,470
Reserve for losses                            (509,292)         ($43,337)                 -                  -          (552,629)
                                     ------------------   ---------------   ----------------   ----------------  ----------------
                                           $26,203,009          ($43,337)       ($4,659,405)       ($2,403,888)      $19,096,379
                                     ==================   ===============   ================   ================  ================
</TABLE>

The following  schedule provides an analysis of the Partnership's  investment in
property on operating leases by major  classifications  as of December 31, 1996,
acquisitions  and  dispositions  during the quarters ended March 31, June 30 and
September 30, 1997 and as of September 30, 1997.

<TABLE>
<CAPTION>
                                       December 31,           --------------- Dispositions ---------------        September 30,
                                           1996            1st Quarter        2nd Quarter        3rd Quarter          1997
                                           ----            -----------        -----------        -----------          ----
<S>                                        <C>               <C>                <C>                <C>               <C>        
Mining                                     $17,497,908         ($949,110)       ($1,649,183)       ($2,209,023)      $12,690,592
Manufacturing                               10,144,506           (86,943)        (1,113,778)          (468,782)        8,475,003
Aircraft                                     5,275,000                 -                  -                  -         5,275,000
Utilities                                    3,946,886                 -                  -                  -         3,946,886
Transportation                               3,923,808                 -                  -                  -         3,923,808
Printing                                     3,454,353                 -                  -                  -         3,454,353
Food processing                              2,438,524                 -                  -                  -         2,438,524
Materials handling                           1,958,393          (264,343)          (203,545)          (293,282)        1,197,223
Medical                                      2,155,489        (1,405,674)                 -                  -           749,815
Communications                                 355,870           (28,452)                 -                  -           327,418
                                     ------------------   ---------------   ----------------   ----------------  ----------------
                                            51,150,737        (2,734,522)        (2,966,506)        (2,971,087)       42,478,622
Less accumulated
   depreciation                            (29,296,937)          824,792            884,828          1,439,976       (26,147,341)
                                     ------------------   ---------------   ----------------   ----------------  ----------------
                                           $21,853,800       ($1,909,730)       ($2,081,678)       ($1,531,111)      $16,331,281
                                     ==================   ===============   ================   ================  ================
</TABLE>



<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997
                                   (Unaudited)


2. Investment in leases (continued):

At September 30, 1997,  the aggregate  amounts of future  minimum lease payments
are as follows:

                                                        Direct
                                        Operating     Financing         Total
                                        ---------     ---------         -----
Three months ending December 31, 1997  $1,658,364      $277,086    $1,935,450
        Year ending December 31, 1998   4,407,420     1,099,859     5,507,279
                                 1999     824,070       546,039     1,370,109
                                 2000           -       144,416       144,416
                                 2001           -        23,836        23,836
                           Thereafter           -        17,877        17,877
                                      ------------  ------------  ------------
                                       $6,889,854    $2,109,113    $8,998,967
                                      ============  ============  ============


3. Non-recourse debt:

Notes payable to financial  institutions are due in varying  monthly,  quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments  of lease payments and pledges of the assets which were purchased or
financed with the proceeds of the particular notes.  Interest rates on the notes
vary from 8% to 13.3%.

Future minimum principal  payments of non-recourse debt as of September 30, 1997
are as follows:

                                         Principal    Interest        Total
                                         ---------    --------        -----
Three months ending December 31, 1997     $667,919     $75,271      $743,190
        Year ending December 31, 1998   12,083,685     132,689     2,216,374
                                 1999      356,416      22,119       378,535
                                 2000       57,291       2,374        59,665
                                       ------------  ----------  ------------
                                        $3,165,311    $232,453    $3,397,764
                                       ============  ==========  ============


4. 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 management of the Partnership.

The  General  Partners  and/or  Affiliates  earned   partnership  and  equipment
management  fees of  $415,165  in 1997 and  $537,724  in 1996,  pursuant  to the
Agreement of Limited Partnership.

The amounts  above are gross  amounts  incurred by the General  Partners  and/or
Affiliates, including commissions to broker dealers for the sales of Partnership
Units.



<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997
                                   (Unaudited)


5. Line of credit:

The  Partnership  participates  with the  General  Partner  and  certain  of its
Affiliates in a $90,000,000 revolving credit agreement with a group of financial
institutions  which  expires on October  28,  1998.  The  agreement  includes an
acquisition  facility to be used by the  Partnership  and  Affiliates to provide
bridge financing for assets on leases.  Draws on the acquisition facility by any

<PAGE>

individual  borrower  are  secured  only by that  borrower's  assets,  including
equipment and related leases.

The Partnership had no borrowings under the agreement during 1997.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower.  The  Partnership was in compliance with its covenants as of September
30, 1997.



<PAGE>

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

Capital Resources and Liquidity

During the third quarter of 1997, the Partnership's  primary source of liquidity
was operating  lease rents.  The liquidity of the  Partnership  will vary in the
future,  increasing  to the extent cash flows from leases exceed  expenses,  and
decreasing  as lease  assets  are  acquired,  as  distributions  are made to the
Limited Partners and to the extent expenses exceed cash flows from leases.

In the  event  the  Partnership's  reserves  were  found to be  inadequate,  the
Partnership  would  likely  be in a  position  to  borrow  against  its  current
portfolio  to meet such  requirements.  The  General  Partners  envision no such
requirements for operating purposes.

As  of  September  30,  1997,  the   Partnership   had  borrowed   approximately
$32,425,000.  The remaining  unpaid balance of such  borrowings at September 30,
1997 was  approximately  $3,165,000.  The  borrowings  are  non-recourse  to the
Partnership,  that is, the only recourse of the lender for a lessee default will
be to the equipment or corresponding lease acquired with the loan proceeds.  The
General  Partners  expect  that  aggregate  borrowings  in the  future  will  be
approximately  40% of aggregate  equipment cost. In any event,  the Agreement of
Limited  Partnership  limits  such  borrowings  to  40%  of the  total  cost  of
equipment, in aggregate.

The  Partnership  participates  with the  General  Partner  and  certain  of its
affiliates  in  a  $90,000,000   revolving  line  of  credit  with  a  financial
institution. The line of credit expires on October 28, 1998.

No  commitments  of capital  have been or are expected to be made other than for
the acquisition of additional equipment. As of September 30, 1997, there were no
such commitments.

The Partnership made distributions of cash from 1997 first quarter operations in
February,  March and April 1997. The Partnership made distributions of cash from
1997 second quarter  operations in May, June and July 1997. The Partnership made
distributions  of cash from 1997 third quarter  operations in August,  September
and October 1997. The amounts of the monthly distributions were each $0.0833 per
Unit. The amounts of the quarterly distributions were each $0.25 per Unit. These
distributions represent an annualized distribution rate of 10.0%.

If interest rates increase or decrease  significantly,  the lease rates that the
Partnership can obtain on future leases will be expected to increase or decrease
in parallel,  as the cost of capital is a  significant  factor in the pricing of
lease  financing.  Leases  already  in place,  for the most  part,  would not be
affected by changes in interest rates.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Partnership  inasmuch as the residual  (resale) values and rates on re-leases of
the  Partnership's  leased  assets may  increase as the costs of similar  assets
increase.  However,  the  Partnership's  revenues from existing leases would not
increase,  as such rates are generally fixed for the terms of the leases without
adjustment for inflation.


<PAGE>

1997 vs. 1996 - nine months

During the nine month period ended September 30, 1997, 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  primarily  of  direct
financing  lease rents  accounted  for as  reductions  of the net  investment in
direct  financing  leases and the proceeds from sales of lease assets.  Proceeds
from sales of assets  decreased by $549,323  compared to 1996.  Asset sales have
decreased as fewer leases matured and the related assets were subsequently sold.
Asset sales are not expected to be consistent  from one period to another.  Cash
flows from  direct  financing  leases have also  decreased  as a result of lease
terminations and asset sales.

In 1997 and  1996,  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  due  to  reductions  in  the  per  Unit
distribution rates compared to 1996.


1997 vs. 1996 - three months

During  the  third  quarter,  the  Partnership's  primary  source  of cash  from
operations was operating lease rents.

Sources  of  cash  from  investing  activities  consisted  primarily  of  direct
financing  lease rents  accounted  for as  reductions  of the net  investment in
direct  financing  leases and the  proceeds  from sales of lease assets as noted
above for the nine month period. These cash flows decreased compared to 1996 for
the reasons noted above for the nine month period.

In 1997 and  1996,  there  were no  financing  sources  of cash.  Repayments  of
non-recourse  debt and distributions to limited partners  decreased  compared to
1996 for the reasons noted above for the nine month period.


Results of Operations

Operations  in the third  quarter of 1997  resulted  in net  income of  $460,934
compared to $1,293,111 in 1996. Net income for the first nine months of 1997 was
$1,910,175 compared to $2,048,577 in 1996.

1997 vs. 1996

Nine months:

Operating  lease  revenues   decreased  by  $1,932,711   compared  to  1996  and
depreciation expense decreased by $1,898,043. Both of these decreases are due to
scheduled terminations of operating leases over the last year and the subsequent
sales of the related assets.


<PAGE>

Effective  January 1, 1996, the Partnership  suspended the recognition of income
under its lease  with  Barney's,  Inc.  The  non-recourse  debt  related to this
transaction was also put in a non-accrual  status, that is, interest expense was
no longer accrued. In July 1996, the underlying assets were sold to an unrelated
third party and the related debt was  extinguished as a part of the transaction.
The Partnership recorded a gain on the sale of the assets of $417,925.  The sale
resulted  in the debt  being  extinguished  for less than its  carrying  amount,
resulting  in  an  extraordinary   gain  of  $97,608.   There  were  no  similar
transactions in 1997.

Interest  expense has decreased due to scheduled  reductions of debt balances in
the nine month period.

Management fees are based on the Partnership's revenues and its distributions to
its Limited Partners.  Both lease revenues and distributions to Limited Partners
decreased compared to 1996. These decreases resulted in a decrease in management
fees of approximately $123,000.

Three months:

Operating  lease  revenues  decreased  by  $810,590  compared  to  1996.  Direct
financing lease revenues  decreased  $41,705  compared to 1996.  These decreases
resulted  from the same  factors  discussed  above  relating  to the nine  month
period. Gains or losses on equipment sales have fluctuated significantly for the
reasons noted above.

Depreciation expense decreased by $680,208 from 1996 to 1997 for the three month
periods. This decrease resulted from the factors discussed above as they related
to the nine month period.  Management  fees also decreased by $43,223 due to the
factors noted above relating to the nine month period.


<PAGE>

                            PART II OTHER INFORMATION

Item 1.     LEGAL PROCEEDINGS.

              Inapplicable.

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, 1997.

              Income  statements  for the nine and  three  month
              periods ended September 30, 1997 and 1996.

              Statement of changes in partners'  capital for the
              nine month period ended September 30, 1997.

              Statements  of cash  flows  for the nine and three
              month periods ended September 30, 1997 and 1996.

              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


<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 12, 1997

                      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/ F. RANDALL BIGONY
                 -------------------------------------------------------
                 F. RANDALL BIGONY
                 Principal financial officer
                 of registrant



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