Form 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

                  |_|    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



                                       1
<PAGE>

                          Part I FINANCIAL INFORMATION

Item 1.               Financial Statements.































                                       2
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                  BALANCE SHEET

                                  JUNE 30, 2000
                                   (Unaudited)


                                     ASSETS



Cash and cash equivalents                                           $3,850,422

Accounts receivable                                                    252,874
                                                               ----------------
                                                                    $4,103,296
                                                               ================


                       LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                      $190,027
                                                               ----------------
Total liabilities                                                      190,027

Partners' capital:
     General partners                                                  265,595
     Limited partners                                                3,647,674
                                                               ----------------
Total partners' capital                                              3,913,269
                                                               ----------------
                                                                    $4,103,296
                                                               ================


                        See notes to financial statements




                                       3
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                INCOME STATEMENTS

                        THREE AND SIX MONTH PERIODS ENDED
                             JUNE 30, 2000 AND 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Six Months Ended              Three Months Ended
                                                                 June 30,                          June 30,
                                                                 --------                          --------
Revenues:                                                 2000             1999             2000             1999
                                                          ----             ----             ----             ----
Lease revenues:
<S>                                                       <C>                <C>             <C>               <C>
   Gain (loss) on sales of assets                         $2,253,471         ($43,349)       ($459,629)        ($47,026)
   Operating leases                                           60,000          853,338           30,000          391,892
   Direct financing leases                                     3,438           42,134                -           18,323
   Leveraged leases                                                -           10,562                -            5,281
Interest income                                               36,809          181,067           30,942           90,971
Other                                                         70,115            2,285           70,076            1,634
                                                     ---------------- ---------------- ---------------- ----------------
                                                           2,423,833        1,046,037         (328,611)         461,075
                                                     ---------------- ---------------- ---------------- ----------------
Expenses:

Administrative cost reimbursements                            86,061           87,442           44,575           62,747
Professional fees                                             44,545           15,366           27,749           11,364
Depreciation                                                  36,625          431,755           18,312          231,636
Other                                                         21,294           63,168           10,257           48,636
Taxes                                                          9,360           37,344            9,360              761
Equipment and partnership management fees                      3,000           81,190            2,126           28,464
Interest expense                                               2,690           15,182              899            6,106
                                                     ---------------- ---------------- ---------------- ----------------
                                                             203,575          731,447          113,278          389,714
                                                     ---------------- ---------------- ---------------- ----------------
Net Income                                                $2,220,258         $314,590        ($441,889)         $71,361
                                                     ================ ================ ================ ================

Net income:
     General partners                                        $22,203           $3,146          ($4,419)            $714
     Limited partners                                      2,198,055          311,444         (437,470)          70,647
                                                     ---------------- ---------------- ---------------- ----------------
                                                          $2,220,258         $314,590        ($441,889)         $71,361
                                                     ================ ================ ================ ================

Net income per limited partnership unit                        $0.30            $0.04           ($0.06)           $0.01
Weighted average number of units
   outstanding                                             7,376,284        7,376,284        7,376,284        7,376,284
</TABLE>

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

                             SIX MONTH PERIOD ENDED
                                  JUNE 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
Net income                                       2,198,055           22,203        2,220,258
                          ---------------- ---------------- ---------------- ----------------
                          ---------------- ---------------- ---------------- ----------------
Balance June 30, 2000           7,376,284      $ 3,647,674        $ 265,595      $ 3,913,269
                          ================ ================ ================ ================
</TABLE>
                        See notes to financial statements


                                       4
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                            STATEMENTS OF CASH FLOWS

                        THREE AND SIX MONTH PERIODS ENDED
                             JUNE 30, 2000 AND 1999

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Six Months Ended              Three Months Ended
                                                                  June 30,                        June 30,
                                                          2000             1999             2000             1999
                                                          ----             ----             ----             ----
Operating activities:
<S>                                                       <C>                <C>             <C>                <C>
Net income                                                $2,220,258         $314,590        ($441,889)         $71,361

Adjustment to reconcile net income to net cash
   provided by operations:
     Depreciation                                             36,625          431,755           18,312          231,636
     Leveraged lease income                                        -          (10,562)               -           (5,281)
     Gain on sales of assets                              (2,253,471)          43,349          459,629           47,026
   Changes in operating assets and liabilities:
      Accounts receivable                                   (168,785)         (25,842)        (165,004)          13,844
      Accounts payable, general partner                            -         (339,374)               -          (21,240)
      Accounts payable, other                                 39,634          (22,189)         (46,214)        (102,803)
      Accrued interest                                             -           (1,014)               -             (513)
      Unearned operating lease income                              -           68,992                -           40,565
                                                     ---------------- ---------------- ---------------- ----------------
Net cash provided by operating activities                   (125,739)         459,705         (175,166)         274,595
                                                     ---------------- ---------------- ---------------- ----------------

Investing activities:

Proceeds from sales of lease assets                        3,303,599          736,868          239,204          394,667
Reduction in net investment in direct
   financing leases                                                -          236,977                -          121,056
                                                     ---------------- ---------------- ---------------- ----------------
Net cash provided by investing activities                  3,303,599          973,845          239,204          515,723
                                                     ---------------- ---------------- ---------------- ----------------

Financing activities:

Distributions to limited partners                                  -       (5,536,789)               -       (2,770,745)
Repayments of long-term non-recourse debt                    (57,291)        (258,075)               -         (130,516)
                                                     ---------------- ---------------- ---------------- ----------------

Net cash used in financing activities                        (57,291)      (5,794,864)               -       (2,901,261)
                                                     ---------------- ---------------- ---------------- ----------------

Net increase (decrease) in cash and
   cash equivalents                                        3,120,569       (4,361,314)          64,038       (2,110,943)
Cash and cash equivalents at
   beginning of period                                       729,853       11,294,942        3,786,384        9,044,571
                                                     ---------------- ---------------- ---------------- ----------------
Cash and cash equivalents at end of
   period                                                 $3,850,422       $6,933,628       $3,850,422       $6,933,628
                                                     ================ ================ ================ ================

Supplemental disclosures of cash flow information:
Cash paid during period for interest                          $2,690          $15,182             $899           $6,106
                                                     ================ ================ ================ ================
</TABLE>

                        See notes to financial statements


                                       5
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2000
                                   (Unaudited)


1. Summary of significant accounting policies:

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. Organization and partnership matters:

ATEL Cash  Distribution Fund III, L.P. (the  Partnership),  was formed under the
laws of the State of California in September  1989, for the purpose of acquiring
equipment to engage in equipment leasing and sales activities.

The Partnership's  business consisted of leasing various types of equipment.  As
of June 30, 2000,  all of the  Partnership's  leases and related assets had been
sold.

Pursuant to the Agreement of Limited  Partnership,  the General Partners receive
compensation  and   reimbursements  for  services  rendered  on  behalf  of  the
Partnership (Note 5.)


3. Investment in leases:

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

<TABLE>
<CAPTION>
                                                             Depreciation
                                                             Expense or
                                          December 31,      Amortization                        June 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)               -
Equipment held for sale or lease                    2,500                -           (2,500)               -
                                          ---------------- ---------------- ---------------- ----------------
                                              $ 1,086,753        $ (36,625)     $(1,050,128)             $ -
                                          ================ ================ ================ ================
</TABLE>


                                       6
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2000
                                   (Unaudited)


3. Investment in leases (continued):

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


<TABLE>
<CAPTION>
                               December 31,                      Dispositions       June 30,
                                   1999          1st Quarter      2nd Quarter         2000
                                   ----          -----------      -----------         ----
<S>                                <C>             <C>              <C>                      <C>
Mining equipment                   $3,757,698      $(2,505,036)     $(1,252,662)             $ -
Less accumulated depreciation      (3,022,240)       2,086,723          935,517                -
                              ---------------- ---------------- ---------------- ----------------
                                     $735,458        ($418,313)       ($317,145)             $ -
                              ================ ================ ================ ================
</TABLE>

Equipment on operating leases was acquired in 1990, 1991, 1992, 1993 and 1995.

At June 30, 2000, aggregate amounts of future minimum lease payments were zero.


4. Non-recourse debt:

At  December  31,  1999,  non-recourse  debt  consists  of a note  payable  to a
financial  institution  of $57,291.  The note was due in  quarterly  payments of
$29,832 through its due date of June 2000. Interest on the note was at a rate of
11%.  The note was secured by an  assignment  of lease  payments and a pledge of
assets. The note was repaid in the first quarter of 2000.







                                       7
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 2000
                                   (Unaudited)


5.  Related party transactions:

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 during the six
month periods ended June 30, 2000 and 1999 as follows:

                                             2000             1999
                                             ----             ----
Reimbursement of administrative costs          $ 86,061         $ 87,442
Incentive and equipment management fees           3,000           81,190
                                        ---------------- ----------------
                                                $89,061         $168,632
                                        ================ ================


6.  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.  During  the  third  quarter,  the  General  Partners  plan that the
Partnership will make a liquidating  distribution of  approximately  $3,500,000,
which represents about 4.7% of the original invested capital of the Partnership.

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 June 30, 1999, 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 June 30,
1999, there were no such commitments.

In the first six months of 2000, the Partnership made no distributions.

The Partnership made distributions of cash from 1999 first quarter operations in
February,  March and April 1999. The Partnership made distributions of cash from
1999 second  quarter  operations in May, June and July 1999.  The amounts of the
monthly  distributions  were each $0.125 per Unit.  The amounts of the quarterly
distributions  were each  $0.375  per Unit.  These  distributions  represent  an
annualized distribution rate of 15.0%.

Cash Flows, 2000 vs. 1999:

Six months:

Cash flows from operations decreased due to decreases in lease rents compared to
1999.  The decreases  were due to lease asset sales since the second  quarter of
1999.

Cash flows from the sales of assets  increased by  $2,566,731  compared to 1999.
The increase was due to increased sales  activities and the final asset sales in
2000.  Cash flows from the  reduction of the  Partnership's  net  investment  in
direct  financing  leases  decreased  compared to 1999 as a result of  equipment
sales over the last twelve months. All such assets had been sold by December 31,
1999.

There were no  financing  sources  of cash flows in 2000 or 1999.  There were no
distributions  in the first six months of 2000.  Debt payments for the six month
period  decreased due to scheduled debt payments and the final  repayment of all
remaining debt in the first quarter of 2000.

Three months:

Cash flows from  operations  decreased  in the three  month  period for the same
reasons noted above for the six month period.

Cash flows from investing  activities consisted of proceeds from sales of assets
( in both 2000 and 1999) and from reductions in the Partnership's net investment
in  direct  financing  leases  (1999  only).  Proceeds  from the sales of assets
decreased  due  to  reduced  sales  activities.  Direct  financing  lease  rents
decreased for the same reasons as noted above for the six month period.

There were no financing sources of cash in 2000 or 1999. Debt payments decreased
compared to 1999 since all  remaining  debt had been repaid in the first quarter
of 2000.



                                       9
<PAGE>

Results of Operations

Operations  in the second  quarter of 2000 resulted in a net loss of $441,889 of
compared  to net income of $71,361 in 1999.  Net income for the first six months
of 2000 was $2,220,258 compared to $314,590 in 1999.

2000 vs. 1999:

Lease revenues decreased in both the three and six month periods compared to the
prior year.  This is the result of asset sales  since June 30,  1999.  All lease
assets were sold prior to June 30, 2000. Interest income has decreased from 1999
to 2000 for both the three and six month periods.  This a direct  consequence of
having  maintained  lower average cash balances  during the 2000 periods than in
the 1999 periods.

Operating  lease  revenues  have shown a net decrease for both the three and six
month  periods.  The original cost of the  underlying  assets has decreased from
$11,378,493 at June 30, 1999 to zero at June 30, 2000. The decreased  amounts of
equipment  owned  by  the  Partnership   also  gave  rise  to  the  decrease  in
depreciation expense.

As scheduled  debt payments have been made,  debt balances have been reduced and
this has caused interest expense to decline from 1999 to 2000.

Equipment  management fees are based on the Partnership's  lease rents. As those
rents have decreased,  the fees have also decreased.  Incentive  management fees
are  based  on the  amounts  of  distributions  of  cash  flows  generated  from
operations.  In the first six months of 2000, there were no distributions to the
Limited Partners, and hence, no incentive management fees.




                                       10
<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, June 30, 2000.
                        Income  statement  for the six and three  month  periods
                        ended June 30,  2000 and 1999.  Statement  of changes in
                        partners' equity for the six month period ended June 30,
                        2000.  Statements  of cash  flows  for the six and three
                        month periods ended June 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


                                       11
<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:
August 11, 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 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


                                       12