FORM 10-Q/A

                           Amendment No.1 to Form 10-Q

                       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 March 31, 2004
   --------------------------------------------------------------------------

                                       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
                                     0-19140
                     ---------------------------------------


                            CNL Income Fund VII, Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Florida                                       59-2963871
---------------------------------              ---------------------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)


        450 South Orange Avenue
           Orlando, Florida                                 32801
----------------------------------------       ---------------------------------
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number
(including area code)                                   (407) 540-2000
                                               ---------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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 ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act):Yes___ No X


<PAGE>


         This amendment on Form 10-Q/A to Form 10-Q of CNL Income Fund VII, Ltd.
(the  "Partnership"),  for the quarter ended March 31, 2004 incorporates certain
revisions  to  historical  financial  data and related  descriptions  but is not
intended to update  other  information  presented  in this report as  originally
filed,  except where  specifically  noted. This restatement  includes changes to
Part I  Items,  Item 1 and  Item  2.  See  Note  1 to  our  Condensed  Financial
Statements for further  discussion of this matter. We are not required to and we
have not updated any forward-looking  statements previously included in the Form
10-Q filed on May 14, 2004.

         This Form 10-Q/A also  includes  restatements  of  previously  reported
historical  financial data and related  descriptions for the quarter ended March
31, 2004. During the quarter ended September 30, 2004 the Partnership reassessed
the manner in which it had implemented  FASB  Interpretation  No. 46R during the
quarter ended March 31, 2004 and determined  that one additional  joint venture,
TGIF  Pittsburgh  Joint Venture,  should have been  consolidated.  The financial
statements  have been  restated for all periods  presented to  consolidate  this
joint venture.  The restatement had no effect on previously  reported net income
or partners' capital

<PAGE>
                                    CONTENTS



                                                                           Page

Part I.

     Item 1.   Financial Statements:

                   Condensed Balance Sheets                                1

                   Condensed Statements of Income                          2

                   Condensed Statements of Partners' Capital               3

                   Condensed Statements of Cash Flows                      4

                   Notes to Condensed Financial Statements                 5-7

     Item 2.   Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                     8-9

     Item 3.   Quantitative and Qualitative Disclosures About
                   Market Risk                                             9

     Item 4.   Controls and Procedures                                     10


Part II.

     Other Information                                                     11-12




<PAGE>
                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S><C>
                                                                             March 31,             December 31,
                                                                               2004                    2003
                                                                           (as restated)          (as restated)
                                                                         ------------------     ------------------
                               ASSETS

   Real estate properties with operating leases, net                         $  17,784,072          $  17,872,706
   Net investment in direct financing leases                                     3,021,881              3,057,744
   Investment in joint ventures                                                  4,289,303              4,298,683
   Cash and cash equivalents                                                     1,056,023                996,918
   Receivables                                                                          --                 94,390
   Accrued rental income                                                         1,201,583              1,188,303
   Other assets                                                                     73,328                 85,335
                                                                         ------------------     ------------------

                                                                             $  27,426,190          $  27,594,079
                                                                         ==================     ==================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable and accrued expenses                                      $     24,288          $       6,378
   Real estate taxes payable                                                         9,068                  3,656
   Distributions payable                                                           675,000                675,000
   Due to related parties                                                           29,061                 11,333
   Rents paid in advance                                                            66,205                 81,463
   Deferred rental income                                                           84,233                 85,574
                                                                         ------------------     ------------------
       Total liabilities                                                           887,855                863,404

   Minority interests                                                            3,360,318              3,361,915

   Partners' capital                                                            23,178,017             23,368,760
                                                                         ------------------     ------------------

                                                                             $  27,426,190          $  27,594,079
                                                                         ==================     ==================
</TABLE>
            See accompanying notes to condensed financial statements.

                                        1
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
<S><C>
                                                                                         Quarter Ended
                                                                                           March 31,
                                                                                    2004               2003
                                                                               (as restated)      (as restated)
                                                                               ---------------    ---------------
  Revenues:
      Rental income from operating leases                                         $   578,187       $    574,844
      Earned income from direct financing leases                                       92,529             96,662
      Contingent rental income                                                          2,037                627
      Interest and other income                                                           202                536
                                                                               ---------------    ---------------
                                                                                      672,955            672,669
                                                                               ---------------    ---------------

  Expenses:
      General operating and administrative                                             81,994             71,001
      Property related                                                                  1,567              5,553
      State and other taxes                                                            28,966             31,806
      Depreciation and amortization                                                    89,546             90,525
                                                                               ---------------    ---------------
                                                                                      202,073            198,885
                                                                               ---------------    ---------------

  Income before minority interests and equity in earnings of
  unconsolidated joint ventures                                                       470,882            473,784

  Minority interests                                                                  (87,631)           (85,084)

  Equity in earnings of unconsolidated joint ventures                                 101,006            103,899
                                                                               ---------------    ---------------

  Net income                                                                      $   484,257       $    492,599
                                                                               ===============    ===============

  Income per limited partner unit                                              $        0.016       $      0.016
                                                                               ===============    ===============

  Weighted average number of limited partner
      units outstanding                                                            30,000,000         30,000,000
                                                                               ===============    ===============
</TABLE>
            See accompanying notes to condensed financial statements.

                                        2
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
<S><C>
                                                                           Quarter Ended           Year Ended
                                                                             March 31,            December 31,
                                                                                2004                  2003
                                                                        -------------------    ------------------
General partners:
    Beginning balance                                                      $       230,931        $      230,931
    Net income                                                                          --                    --
                                                                        -------------------    ------------------
                                                                                   230,931               230,931
                                                                        -------------------    ------------------
Limited partners:
    Beginning balance                                                           23,137,829            23,609,162
    Net income                                                                     484,257             2,228,667
    Distributions ($0.023 and $0.090 per
       limited partner unit, respectively)                                        (675,000)           (2,700,000)
                                                                        -------------------    ------------------
                                                                                22,947,086            23,137,829
                                                                        -------------------    ------------------

Total partners' capital                                                    $    23,178,017         $  23,368,760
                                                                        ===================    ==================
</TABLE>

            See accompanying notes to condensed financial statements.

                                        3
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S><C>
                                                                                         Quarter Ended
                                                                                           March 31,
                                                                                    2004               2003
                                                                                (as restated)      (as restated)
                                                                                --------------    ---------------

  Net cash provided by operating activities                                        $  823,333         $  803,839
                                                                                --------------    ---------------

  Cash Flows from Financing Activities:
      Distributions to limited partners                                              (675,000)          (675,000)
      Distributions to holders of minority interests                                  (89,228)           (89,658)
                                                                                --------------    ---------------
         Net cash used in financing activities                                       (764,228)          (764,658)
                                                                                --------------    ---------------

  Net increase in cash and cash equivalents                                            59,105             39,181

  Cash and cash equivalents at beginning of quarter                                   996,918            989,167
                                                                                --------------    ---------------

  Cash and cash equivalents at end of quarter                                     $ 1,056,023        $ 1,028,348
                                                                                ==============    ===============

  Supplemental schedule of non-cash financing activities:

         Distributions declared and unpaid at end of
            quarter                                                                $  675,000         $  675,000
                                                                                ==============    ===============
</TABLE>
            See accompanying notes to condensed financial statements.

                                        4
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2004 and 2003


1.       Basis of Presentation

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of the general partners, necessary for a fair
         statement of the results for the interim periods  presented.  Operating
         results for the quarter ended March 31, 2004,  may not be indicative of
         the results that may be expected for the year ending December 31, 2004.
         Amounts as of December 31, 2003, included in the financial  statements,
         have been derived from audited financial statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund VII, Ltd. (the  "Partnership")  for the year ended December
         31, 2003.

         The Partnership accounts for its 83% interest in San Antonio #849 Joint
         Venture,  its 79%  interest in CNL  Mansfield  Joint  Venture,  its 56%
         interest in Duluth Joint  Venture,  its 68.75%  interest in CNL VII, XV
         Columbus Joint Venture, its 79% interest in Arlington Joint Venture and
         its  36.88%  interest  in  TGIF  Pittsburgh  Joint  Venture  using  the
         consolidation  method.  Minority interests represent the minority joint
         venture partners' proportionate share of the equity in the consolidated
         joint ventures. All significant  intercompany accounts and transactions
         have been eliminated.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
         revision to FASB  Interpretation  No. 46 (originally  issued in January
         2003)  ("FIN  46R"),  "Consolidation  of  Variable  Interest  Entities"
         requiring  existing  unconsolidated  variable  interest  entities to be
         consolidated by their primary beneficiaries. The primary beneficiary of
         a variable  interest entity is the party that absorbs a majority of the
         entity's expected losses,  receives a majority of its expected residual
         returns, or both, as a result of holding variable interests,  which are
         the ownership,  contractual,  or other pecuniary interests in an entity
         that change with  changes in the fair value of the  entity's net assets
         excluding  variable  interests.  Prior to FIN 46R, a company  generally
         included  another  entity  in  its  financial  statements  only  if  it
         controlled the entity through voting interests.  Application of FIN 46R
         is  required  in  financial  statements  of public  entities  that have
         interests in variable  interest entities for periods ending after March
         15,  2004.  The  Partnership  has adopted FIN 46R as of March 31, 2004,
         which   resulted   in   the   consolidation   of   certain   previously
         unconsolidated  joint  ventures.  FIN 46R  does not  require,  but does
         permit  restatement  of previously  issued  financial  statements.  The
         Partnership has restated prior year's financial  statements to maintain
         comparability between the periods presented.  These restatements had no
         effect on partners' capital or net income.

         This Form 10-Q/A includes changes made to the Form 10-Q for the quarter
         ended  March  31,  2004 as filed on May 14,  2004 and it also  includes
         restatements  of  previously   reported   financial  data  and  related
         descriptions  for the quarter  ended March 31,  2003.  The  Partnership
         determined  that upon  adoption  of FIN 46R that one  additional  joint
         venture previously  accounted for on the equity method should have been
         consolidated.  The restatements  had no effect on partners'  capital or
         net  income.  The  following  is  a  summary  of  the  effects  of  the
         restatement  on  the  Partnership's   previously   reported   financial
         statements:

                                       5
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2004 and 2003


1.       Basis of Presentation - Continued
<TABLE>
<CAPTION>
<S><C>
                    Restatements on Condensed Balance Sheets

                                                              March 31, 2004                 December 31, 2003
                                                       ------------------------------  ------------------------------
                                                                                             As
                                                                                         previously
                                                            As                            reported
                                                        previously           As            in the           As
                                                         reported         restated       Form 10-Q        restated
                                                       -------------    -------------  -------------  ---------------

Real estate properties with operating leases, net      $ 15,440,197     $ 17,784,072    $15,516,336   $   17,872,706
Investment in joint ventures                              5,215,444        4,289,303      5,226,092        4,298,683
Cash and cash equivalents                                 1,054,996        1,056,023        995,838          996,918
Accrued rental income                                     1,063,858        1,201,583      1,059,756        1,188,303
Accounts payable and accrued expenses                        24,288           24,288          6,324            6,378
Due to related parties                                       28,938           29,061         11,333           11,333
Minority interests                                        1,803,955        3,360,318      1,803,381        3,361,915


                 Restatements on Condensed Statements of Income

                                                                            For the quarter
                                                                         ended March 31, 2004

                                                                           As
                                                                       previously          As
                                                                        reported        restated
                                                                     -------------    ------------

               Rental income from operating leases                    $   504,037      $  578,187

               Expenses:
                   General operating and administrative                    81,697          81,994
                   Depreciation and amortization                           77,051          89,546

               Minority interests                                         (48,902)        (87,631)

               Equity in earnings of unconsolidated joint ventures        123,635         101,006

</TABLE>
                                       6
<PAGE>

                            CNL INCOME FUND VII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2004 and 2003

1.       Basis of Presentation - Continued
<TABLE>
<CAPTION>
<S><C>
                                                                            For the quarter
                                                                         ended March 31, 2003

                                                                             As
                                                                         previously
                                                                          reported
                                                                           in the             As
                                                                         Form 10-Q         restated
                                                                       -------------     ------------

               Rental income from operating leases                      $    500,694     $   574,844

               Expenses:
                   Property related                                            5,509           5,553
                   Depreciation and amortization                              78,030          90,525

               Minority interests                                            (46,195)        (85,084)

               Equity in earnings of unconsolidated joint ventures           126,621         103,899
</TABLE>


2.       Reclassification

         Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2004 presentation.  These  reclassifications
         had no effect on total partners' capital or net income.

                                       7
<PAGE>


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

         CNL Income Fund VII,  Ltd.  (the  "Partnership")  is a Florida  limited
partnership  that was organized on August 18, 1989, to acquire for cash,  either
directly or through joint venture and tenancy in common arrangements, both newly
constructed  and existing  restaurants,  as well as land upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators of national  and  regional  fast-food  restaurant  chains.  The leases
generally are triple-net  leases,  with the lessees  responsible for all repairs
and maintenance,  property taxes, insurance and utilities.  As of March 31, 2004
and  2003,  the  Partnership  owned 18  Properties  directly  and 17  Properties
indirectly through joint venture or tenancy in common arrangements.

         The  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations  presented  below  reflects  certain  restatements  to the
Partnership's  previous financial  statements as of March 31, 2004 and March 31,
2003 as described in Note 1 to the Partnership's condensed financial statements.
The restatement was necessary to consolidate an additional  joint venture,  TGIF
Pittsburgh Joint Venture,  previously accounted for under the equity method that
is required to be  consolidated  under FIN 46R. The restatement had no effect on
previously reported net income or partners' capital.

Capital Resources

         For the quarters  ended March 31, 2004 and 2003,  net cash  provided by
operating activities was $823,333 and $803,839, respectively.

         At March 31, 2004,  the  Partnership  had  $1,056,023  in cash and cash
equivalents,  as compared to $996,918 at December 31,  2003.  At March 31, 2004,
these funds were held in demand deposit accounts at a commercial bank. The funds
remaining  at  March  31,  2004,  after  payment  of  distributions   and  other
liabilities,  will be used to invest in an  additional  Property and to meet the
Partnership's working capital needs.

Short-Term Liquidity

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based  primarily  on current  cash from  operations,  the  Partnership  declared
distributions to the limited partners of $675,000 for each of the quarters ended
March 31,  2004 and 2003.  This  represents  distributions  for each  applicable
quarter of $0.023 per unit. No  distributions  were made to the general partners
for the quarters  ended March 31, 2004 and 2003. No amounts  distributed  to the
limited  partners for the quarters ended March 31, 2004 and 2003 are required to
be or have been treated by the  Partnership  as a return of capital for purposes
of  calculating  the  limited   partners'   return  on  their  adjusted  capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to the limited partners on a quarterly basis.

         Total liabilities,  including  distributions  payable, were $887,855 at
March 31, 2004,  as compared to $863,404 at December  31, 2003.  The increase in
liabilities  was the result of an  increase  in  accounts  payable  and  accrued
expenses,  real estate taxes payable,  and amounts due to related  parties.  The
increase  was  partially  offset by a  decrease  in rents paid in  advance.  The
general  partners  believe that the  Partnership  has sufficient cash on hand to
meet its current working capital needs.

                                       8
<PAGE>

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         Rental  revenues from  continuing  operations  were $670,716 during the
quarter ended March 31, 2004, as compared to $671,506  during the same period of
2003. Rental revenues from continuing  operations during the quarter ended March
31, 2004, as compared to the quarter ended March 31, 2003,  remained  relatively
constant, as there was no change in the leased property portfolio.

         In December 2003, Waving Leaves,  Inc., the tenant of the Properties in
Orrville,  Akron,  Minerva and  Seville,  Ohio filed for  Chapter 11  bankruptcy
protection  and rejected the lease of the Property in Orrville,  Ohio. As of May
3, 2004,  the  Partnership  has received from the guarantor all rental  payments
relating  to these four  leases.  The lost  revenues  that  would  result if the
guarantor were to cease making rental  payments on any of these leases will have
an  adverse  effect on the  results  of  operations  of the  Partnership  if the
Partnership is not able to re-lease the Properties in a timely manner.

         The Partnership  earned  $101,006  attributable to net income earned by
unconsolidated  joint  ventures  during the  quarter  ended March 31,  2004,  as
compared  to  $103,899  during the same  period of 2003.  Net  income  earned by
unconsolidated  joint  ventures  during 2004,  as compared to the same period of
2003,  remained  relatively  constant,  as there were no changes in the property
portfolio owned by the joint ventures and tenancies in common.

         Operating expenses,  including  depreciation and amortization  expense,
were  $202,073  during the quarter ended March 31, 2004, as compared to $198,885
during the same period of 2003.  The increase in operating  expenses  during the
quarter ended March 31, 2004,  was partially  due to the  Partnership  incurring
additional general operating and administrative expenses, including legal fees.

         The general partners continuously  evaluate strategic  alternatives for
the  Partnership,  including  alternatives  to provide  liquidity to the limited
partners.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
revision to FASB Interpretation No. 46 (originally issued in January 2003) ("FIN
46R"),   "Consolidation  of  Variable  Interest  Entities"   requiring  existing
unconsolidated  variable  interest  entities to be consolidated by their primary
beneficiaries.  The primary  beneficiary  of a variable  interest  entity is the
party that  absorbs a  majority  of the  entity's  expected  losses,  receives a
majority  of its  expected  residual  returns,  or both,  as a result of holding
variable  interests,  which are the ownership,  contractual,  or other pecuniary
interests  in an  entity  that  change  with  changes  in the fair  value of the
entity's net assets excluding  variable  interests.  Prior to FIN 46R, a company
generally  included  another  entity  in its  financial  statements  only  if it
controlled  the  entity  through  voting  interests.  Application  of FIN 46R is
required in  financial  statements  of public  entities  that have  interests in
variable  interest  entities  for  periods  ending  after  March 15,  2004.  The
Partnership  has adopted  FIN 46R as of March 31,  2004,  which  resulted in the
consolidation of certain previously  unconsolidated joint ventures. FIN 46R does
not  require,  but  does  permit  restatement  of  previously  issued  financial
statements.  The Partnership has restated prior year's  financial  statements to
maintain comparability between the periods presented.  These restatements had no
effect on partners' capital or net income.

         This Form 10-Q/A includes a restatement of previously  issued financial
statements  for the three months ended March 31, 2004 and 2003 to consolidate an
additional joint venture,  TGIF Pittsburgh Joint Venture,  previously  accounted
for on the equity method.  These restatements had no effect on partners' capital
or net income.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.

                                       9
<PAGE>

ITEM 4.   CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officer of the  corporate  general  partner  has  evaluated  the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Quarterly  Report  on Form 10-Q and has  determined  that such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.

                                       10
<PAGE>


                           PART II. OTHER INFORMATION


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

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

Item 3.   Default 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)   Exhibits

                3.1     Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund  VII,  Ltd.  (Included  as  Exhibit  4.1 to
                        Registration  Statement  No.  33-31482  on Form S-11 and
                        incorporated herein by reference.)

                4.1     Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund  VII,  Ltd.  (Included  as  Exhibit  4.1 to
                        Registration  Statement  No.  33-31482  on Form S-11 and
                        incorporated herein by reference.)

                4.2     Amended and Restated Agreement of Limited Partnership of
                        CNL Income Fund VII,  Ltd.  (Included  as Exhibit 4.2 to
                        Form  10-K  filed  with  the   Securities  and  Exchange
                        Commission on April 1, 1996, and incorporated  herein by
                        reference.)

                10.1    Management  Agreement  between CNL Income Fund VII, Ltd.
                        and CNL Investment  Company (Included as Exhibit 10.1 to
                        Form  10-K  filed  with  the   Securities  and  Exchange
                        Commission on April 1, 1996, and incorporated  herein by
                        reference.)

                10.2    Assignment of Management  Agreement  from CNL Investment
                        Company to CNL Income Fund Advisors,  Inc.  (Included as
                        Exhibit 10.2 to Form 10-K filed with the  Securities and
                        Exchange  Commission on March 30, 1995, and incorporated
                        herein by reference.)

                10.3    Assignment of Management  Agreement from CNL Income Fund
                        Advisors,  Inc. to CNL Fund Advisors,  Inc. (Included as
                        Exhibit 10.3 to Form 10-K filed with the  Securities and
                        Exchange  Commission on April 1, 1996, and  incorporated
                        herein by reference.)

                10.4    Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 10, 2001, and incorporated
                        herein by reference.)

                10.5    Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 13, 2002, and incorporated
                        herein by reference.)

                                       11
<PAGE>

                31.1    Certification  of  Chief  Executive  Officer  and  Chief
                        Financial  Officer of Corporate General Partner Pursuant
                        to Rule 13a-14 as Adopted Pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002. (Filed herewith.)

                32.1    Certification  of  Chief  Executive  Officer  and  Chief
                        Financial  Officer of Corporate General Partner Pursuant
                        to 18 U.S.C. Section 1350 as Adopted Pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

          (b)   Reports on Form 8-K

                No reports on Form 8-K were filed during the quarter ended
                March 31, 2004.

                                       12
<PAGE>

                                   SIGNATURES


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

         DATED this 8th day of December, 2004


                               CNL INCOME FUND VII, LTD.

                               By:   CNL REALTY CORPORATION
                                     General Partner


                                     By:  /s/ Robert A. Bourne
                                         ---------------------------------------
                                          ROBERT A. BOURNE
                                          President and Chief Executive Officer


<PAGE>
                                  EXHIBIT INDEX

Exhibit Number

          (c)   Exhibits

                3.1     Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund  VII,  Ltd.  (Included  as  Exhibit  4.1 to
                        Registration  Statement  No.  33-31482  on Form S-11 and
                        incorporated herein by reference.)

                4.1     Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund  VII,  Ltd.  (Included  as  Exhibit  4.1 to
                        Registration  Statement  No.  33-31482  on Form S-11 and
                        incorporated herein by reference.)

                4.2     Amended and Restated Agreement of Limited Partnership of
                        CNL Income Fund VII,  Ltd.  (Included  as Exhibit 4.2 to
                        Form  10-K  filed  with  the   Securities  and  Exchange
                        Commission on April 1, 1996, and incorporated  herein by
                        reference.)

                10.1    Management  Agreement  between CNL Income Fund VII, Ltd.
                        and CNL Investment  Company (Included as Exhibit 10.1 to
                        Form  10-K  filed  with  the   Securities  and  Exchange
                        Commission on April 1, 1996, and incorporated  herein by
                        reference.)

                10.2    Assignment of Management  Agreement  from CNL Investment
                        Company to CNL Income Fund Advisors,  Inc.  (Included as
                        Exhibit 10.2 to Form 10-K filed with the  Securities and
                        Exchange  Commission on March 30, 1995, and incorporated
                        herein by reference.)

                10.3    Assignment of Management  Agreement from CNL Income Fund
                        Advisors,  Inc. to CNL Fund Advisors,  Inc. (Included as
                        Exhibit 10.3 to Form 10-K filed with the  Securities and
                        Exchange  Commission on April 1, 1996, and  incorporated
                        herein by reference.)

                10.4    Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 10, 2001, and incorporated
                        herein by reference.)

                10.5    Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 13, 2002, and incorporated
                        herein by reference.)

                31.1    Certification  of  Chief  Executive  Officer  and  Chief
                        Financial  Officer of Corporate General Partner Pursuant
                        to Rule 13a-14 as Adopted Pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002. (Filed herewith.)

                32.1    Certification  of  Chief  Executive  Officer  and  Chief
                        Financial  Officer of Corporate General Partner Pursuant
                        to 18 U.S.C. Section 1350 as Adopted Pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)


<PAGE>




                                  EXHIBIT 31.1




<PAGE>



                                  EXHIBIT 32.1