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 March 31, 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

                                 MARCH 31, 2000
                                   (Unaudited)


                                     ASSETS


Cash and cash equivalents                                          $3,786,384

Accounts receivable                                                    87,870

Investments in leases                                                 717,145
                                                              ----------------
Total assets                                                       $4,591,399
                                                              ================


                        LIABILITIES AND PARTNERS' CAPITAL



Accounts payable                                                      236,241
                                                              ----------------
Total liabilities                                                     236,241

Partners' capital:
     General Partners                                                 270,013
     Limited partners                                               4,085,145
                                                              ----------------
Total partners' capital                                             4,355,158
                                                              ----------------
Total liabilities and partners' capital                            $4,591,399
                                                              ================

                             See accompanying notes.


                                       3
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                                INCOME STATEMENTS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2000 AND 1999
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                      2000                1999
                                                                      ----                ----
<S>                                                                     <C>                <C>
Revenues:
Lease revenues:
   Gain on sales of assets                                              $ 2,713,100          $ 3,677
   Operating leases                                                          30,000          461,446
   Direct financing leases                                                    3,438           23,811
   Leveraged leases                                                               -            5,281
Interest income                                                               5,867           90,096
Other                                                                            39              651
                                                              ---------------------- ----------------
                                                                          2,752,444          584,962
                                                              ---------------------- ----------------
Expenses:
Administrative cost reimbursements to General Partners                       41,486           24,695
Professional fees                                                            16,796            4,002
Depreciation and amortization                                                18,313          200,119
Other                                                                        11,037           14,532
Interest                                                                      1,791            9,076
Equipment and partnership management fees to General Partners                   874           52,726
Taxes on income and franchise fees                                                -           36,583
                                                              ---------------------- ----------------
                                                                             90,297          341,733
                                                              ---------------------- ----------------
Net income                                                              $ 2,662,147        $ 243,229
                                                              ====================== ================

Net income:
     General Partners                                                      $ 26,621          $ 2,432
     Limited Partners                                                     2,635,526          240,797
                                                              ---------------------- ----------------
                                                                        $ 2,662,147        $ 243,229
                                                              ====================== ================

Net income per Limited Partnership unit                                      $ 0.36           $ 0.03

Weighted average number of units outstanding                              7,375,284        7,375,284
</TABLE>


                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                        THREE MONTHS ENDED MARCH 31, 2000

<TABLE>
<CAPTION>
                                           Limited Partners         General
                               Units            Amount             Partners              Total
<S>                              <C>             <C>                     <C>             <C>
Balance December 31, 1999        7,375,284       $1,449,619              $ 243,392       $1,693,011
Net income                                        2,635,526                 26,621        2,662,147
                          ----------------- ---------------- ---------------------- ----------------
Balance March 31, 2000           7,375,284       $4,085,145              $ 270,013       $4,355,158
                          ================= ================ ====================== ================
</TABLE>

                             See accompanying notes.


                                       4
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                            STATEMENTS OF CASH FLOWS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 2000 AND 1999
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                               2000                1999
                                                                               ----                ----
Operating activities:
<S>                                                                              <C>                <C>
Net income                                                                       $ 2,662,147        $ 243,229

Adjustments to reconcile net income to net cash provided by operations:
   Depreciation and amortization                                                      18,313          200,119
   Gain on sale of assets                                                         (2,713,100)          (3,677)
   Leveraged lease income                                                                  -           (5,281)
   Changes in operating assets and liabilities:
     Accounts receivable                                                              (3,781)         (39,686)
     Accounts payable, general partner                                                     -         (318,134)
     Accounts payable, other                                                          85,848           80,614
     Accrued interest                                                                      -             (501)
     Unearned operating lease income                                                       -           28,427
                                                                       ---------------------- ----------------
Net cash (used in) provided by operations                                             49,427          185,110
                                                                       ---------------------- ----------------

Investing activities:
Proceeds from sales of lease assets                                                3,064,395          342,201
Reductions of net investment in direct financing leases                                    -          115,921
                                                                       ---------------------- ----------------
Net cash provided by investing activities                                          3,064,395          458,122
                                                                       ---------------------- ----------------

Financing activities:
Repayments of non-recourse debt                                                      (57,291)        (127,559)
Distributions to limited partners                                                          -       (2,766,044)
                                                                       ---------------------- ----------------
Net cash used in financing activities                                                (57,291)      (2,766,044)
                                                                       ---------------------- ----------------

Net decrease in cash and cash equivalents                                          3,056,531       (2,122,812)
Cash and cash equivalents at beginning of period                                     729,853       11,294,942
                                                                       ---------------------- ----------------
Cash and cash equivalents at end of period                                       $ 3,786,384       $9,172,130
                                                                       ====================== ================

Supplemental disclosures of cash flow information:
Cash paid during period for interest                                                 $ 1,791          $ 9,577
                                                                       ====================== ================
</TABLE>

                             See accompanying notes.


                                       5
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 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
10KSB.


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.  Contributions in
the  amount  of $600  were  received  as of  September  7,  1989,  $100 of which
represented  the  General  Partners'  continuing  interest,  and  $500 of  which
represented the Initial Limited Partners' capital investment.

Upon the sale of the  minimum  amount of Units of Limited  Partnership  interest
(Units) of $1,200,000 and receipt of the proceeds  thereof on March 1, 1990, the
Partnership commenced operations.

The Partnership's business consisted of leasing various types of equipment.


3. Investment in leases:

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

<TABLE>
<CAPTION>
                                                                    Depreciation
                                                                    Expense or           Reclassi-
                                                  December 31,         Lease           fications and         March 31,
                                                      1999         Amortization        Dispositions            2000
                                                      ----         ------------    -   -------------           ----

<S>                                                   <C>               <C>                   <C>               <C>
Assets held for lease or sale                            $ 2,500                               $ 397,500        $ 400,000
Net investment in operating leases                       735,458        $ (18,313)              (400,000)         317,145
Net investment in direct financing leases                348,795                -               (348,795)               -
                                                ----------------- ---------------- ---------------------- ----------------
                                                      $1,086,753        $ (18,313)            $ (351,295)       $ 717,145
                                                ================= ================ ====================== ================
</TABLE>


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


                                       6
<PAGE>

                                          ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 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,
depreciation and dispositions  during the quarter ended March 31, 2000 and as of
March 31, 2000.

<TABLE>
<CAPTION>
                                                                       Reclassi-
                                  December 31,                       fications and         March 31,
                                    1999         Depreciation        Dispositions            2000
                                    ----         ------------    -   -------------           ----
<S>                                 <C>               <C>                    <C>               <C>
Mining equipment                    $3,757,698                            $ (2,505,036)      $1,252,662
Less accumulated depreciation       (3,022,240)       $ (18,313)             2,105,036         (935,517)
                              ----------------- ---------------- ---------------------- ----------------
                                     $ 735,458        $ (18,313)            $ (400,000)       $ 317,145
                              ================= ================ ====================== ================
</TABLE>

At March 31, 2000, the aggregate amounts of future minimum lease payments are as
follows:

                                   Year ending
                                   December 31,
                                   ------------
                                          2000          $ 90,000
                                          2001            20,000
                                                -----------------
                                                       $ 110,000
                                                =================



                                       7
<PAGE>

                      ATEL CASH DISTRIBUTION FUND III, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2000
                                   (Unaudited)


4.  Related party transactions:

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

The Limited Partnership Agreement allows for the reimbursement of costs incurred
by ATEL in providing administrative services to the Partnership.  Administrative
services provided include  partnership  accounting,  investor  relations,  legal
counsel  and lease  and  equipment  documentation.  ATEL is not  reimbursed  for
services where it is entitled to receive a separate fee as compensation for such
services,  such as acquisition and disposition of equipment.  Reimbursable costs
incurred  by ATEL are  allocated  to the  Partnership  based  upon  actual  time
incurred by employees working on partnership  business and an allocation of rent
and other costs based on utilization studies.

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

<TABLE>
<CAPTION>
                                                                                           2000                1999
                                                                                           ----                ----
<S>                                                                                             <C>              <C>
Incentive  management  fees  (computed  as  5% of  distributions  of  cash  from
operations,  as defined in the  Limited  Partnership  Agreement)  and  equipment
management  fees  (computed as 5% of gross revenues from  operating  leases,  as
defined in the Limited Partnership Agreement plus 2% of gross revenues from full
payout leases, as defined in the Limited Partnership Agreement).                                   $ 874         $ 52,726


Administrative costs reimbursed to General Partner                                                41,486           24,695
                                                                                   ---------------------- ----------------
                                                                                                $ 42,360         $ 77,421
                                                                                   ====================== ================
</TABLE>



                                       8
<PAGE>

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

Capital Resources and Liquidity

In the first  quarter  of 2000,  the  Partnership's  primary  source of cash was
proceeds from the sales of lease assets.  During the first quarter of 1999,  the
Partnership's  primary  source  of cash was rents  from  operating  leases.  The
liquidity of the Partnership  will vary in the future,  increasing to the extent
that rents and proceeds  from the sales of lease  assets  exceed  expenses,  and
decreasing as  distributions  are made to the Limited Partners and to the extent
expenses exceed rents and the proceeds from the sales of lease assets.

As of March 31, 2000, the  Partnership had borrowed  approximately  $32,425,000,
all of which has been repaid.

The  Partnership is in the process of winding down its  operations.  It has only
one  revenue  producing  lease and its only  other  remaining  lease  assets are
expected to be sold by July 2000, At that time, the General Partners expect that
the Partnership will be terminated.

Cash Flows

Cash flows from operations  decreased by $135,683 compared to 1999. The decrease
resulted from a decrease in operating lease revenues. In both years, the primary
operating source of cash was operating lease revenues.

Cash flows provided by investing  activities increased by $2,606,273 compared to
1999.  This increase was due asset sales in February  2000.  Asset sales are not
currently  expected to be  consistent  from one period to another as they do not
occur at regular  intervals.  Asset sales over the remainder of the year are not
expected to be comparable to those in the first quarter.

There  were  no  financing  sources  of  cash  in  2000  or  1999.  Payments  of
non-recourse  debt have  decreased  as a result of certain  of the  non-recourse
notes being fully paid off since the first quarter of 1999.


Results of Operations

Operations  in the first  quarter of 2000  resulted in net income of  $2,662,147
compared to $243,229 in 1999.

Operating lease revenues  declined from $461,446 in 1999 to $30,000 in 2000. The
decrease is the result of scheduled lease  terminations  and subsequent sales of
the related lease assets. Revenues from direct finance leases has also decreased
as a result of terminations and asset sales. Lease revenues for the remainder of
2000 are expected to be similar to the first quarter.

Depreciation and amortization  expense  decreased by $181,606  compared to 1999.
The decrease  resulted  from sales of assets which were  previously on operating
leases.  Interest  expense has decreased as the  Partnership  has made scheduled
debt payments and has reduced the overall amounts of its non-recourse debt since
1999.

Management fees are related to the Partnership's  revenues and have decreased as
a result of the decreases of those revenues compared to 1999.
                           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, March 31, 2000
                      Income statements for the three month periods ended March
                         31, 2000 and 1999
                      Statements of changes in partners' equity for the three
                         month period ended March 31, 2000
                      Statements of cash flows for the three month periods ended
                         March 31, 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




                                       9
<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:
May 12, 2000

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





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



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



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



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