Exhibit 99.0



DiVall Income Properties 3, L.P.



QUARTERLY NEWS



|                                       |  |                   
|-------------------------------------- |  | ------------------
|A publication of The Provo Group, Inc. |  | FIRST QUARTER 2002



Pending Sales to Allow
Partnership Liquidation Depend on Your Vote



Management currently has
all properties in the portfolio under contract. Before we can close on all the sale contracts and liquidate the portfolio, we must receive the consent of 51% of the partners. Please return the enclosed consent statement with your vote. Failure
to return a consent card will constitute a vote against the proposed sale. Please read the enclosed yellow sheet which summarizes the proposed liquidation and the enclosed consent statement which provides all the necessary information
in detail.



Phoenix Restaurants Bankruptcy Affects Quarterly Cash
Flow and Eliminates First Quarter Distribution



The average
distributions for 2001 and 2000 were $4.53 and $3.65 per unit. Due to the bankruptcy of our Dennys operator our budgeted distributions for 2002 were planned to be dramatically lower than in previous years. Last quarter the distribution was
$1.46 per unit and this quarter we anticipated paying a distribution of $.88 per unit. Unfortunately, for the first time since 1993, we are unable to pay a quarterly distribution. For more details on the bankruptcys impact on Partnership cash
flow see the continuation on page 2.



Article is continued
on Page 2



Secondary Market Transfer Activity Will Be Temporarily
Suspended



No secondary market transfers will be accepted for the
period from May 1, 2002 to August 15, 2002. With the proposed sales and related proposed liquidation of the Partnership, offers to purchase your units may be forthcoming. We want to be sure that long-standing investors are ultimately rewarded
(through a timely liquidation), for their patience. Cash will undoubtedly be accumulated during this period and should properly be received by our investors without a secondary market discount. Management will accept transfers in the case of an
emergency, such as a death. Our only goal is to protect the investor and to try and ensure his or her best financial result.



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|------ |  | -------- |  | ------
|PAGE 2 |  | DIVALL 3 |  | 1 Q 02



Phoenix Restaurants
Bankruptcy Affects Quarterly Cash Flow and Eliminates First Quarter Distribution

Continued From Front Page



| |  | Dennys Bankruptcy. When Phoenix Restaurant Group filed bankruptcy, we lost $9,445 in monthly income. Additionally, we were forced to pay real estate taxes and
maintenance expenses on behalf of the tenant. Most of the maintenance expenses we incurred post-bankruptcy and they were one time costs (fixing the roof, plumbing repairs, unpaid utilities). However, such costs all came during the first quarter.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Legal Expenses. We have contracted to sell all of the remaining properties in this Partnership. Therefore, we have incurred legal fees for the preparation and review
of the contracts. Additionally, we incurred legal fees during the bankruptcy filing to protect the Partnerships rights.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Although, we are still collecting rent from the two operating tenants, Hardees and Applebees; the rental stream does not provide for distributable cash flow.
As we have stressed over the years, the small size of the portfolio does not warrant the administrative burden of a public entity. That is why we have been so persistent in our recommendations that the properties should be sold and the partnership
liquidated. We wanted a bulk sale so we werent left with an even smaller number of properties that wouldnt cover costs. Well, the bankruptcies have forced us into that position anyway and accordingly, we are attempting to
close two simultaneous purchasers.



DISTRIBUTION HIGHLIGHTS



| |  |                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                               
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |       There was no distribution paid for the First Quarter.
       We
originally projected to pay a distribution of $15,000 or $.87 per unit. |  |       $718.00 to $559.00 range of distributions per unit from the first
unit sold to the last unit sold before the offering closed (April 1992), respectively. [NOTE: Distributions are from both cash flow from operations and net cash activity from financing and investing
activities.]



STATEMENTS
OF INCOME AND CASH FLOW HIGHLIGHTS



| |  | Operating Revenue was slightly higher than expected.This can be attributed to restitution payments made by Gary DiVall and other miscellaneous income.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Operating Expenses were 29% higher than expected. Legal fees were higher than originally projected, this is due to the Dennys bankruptcy and the anticipated
dissolution of the Partnership. Additionally, we had unexpected costs for the vacant Dennys in Colorado Springs. Roof repairs, cleaning expenses and plumbing repairs were all necessary in order to get the property ready for a sale or re-lease.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|       |  |          |  |       
|------ |  | -------- |  | ------
|PAGE 3 |  | DIVALL 3 |  | 4 Q 01



PROPERTY
HIGHLIGHTS



| |  | Hardees (Oak Creek, WI) has vacated the property. All four installments of the termination fee have been paid in full.
| | - | -----------------------------------------------------------------------------------------------------------------------



| |  | Dennys (Colorado Springs, CO)has vacated the property and filed bankruptcy. We have received verification from the courts for our claim. However, we are an
unsecured creditor in a large bankruptcy proceeding. Therefore, it is unknown what percentage (if any) of our claim will be ultimately paid.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Dennys (Englewood, CO)As indicated in the last Quarterly Newsletter, this property is no longer a part of the Partnership Portfolio.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



QUESTIONS & ANSWERS



When will I find out if the Partnership is liquidating?



All consent cards are due on or before June 15, 2002. We should have all the votes tabulated
shortly thereafter. If we receive 51% of the partners approval, we will proceed toward closing the sales contracts. Assuming the buyers perform as contracted, we should close no later than July.



When will I receive my next distribution?



Your next distribution will be mailed on August 15, 2002. The results of the consent will be
disclosed to you in that Newsletter. If we received a majority vote to sell, more information on the sale will also be included in that Newsletter.



If you receive a majority vote to sell and the sales close, when will the Partnership be liquidated?



We expect to close on the sale of all the properties no later than July 2002. We will then
begin the wind-up process and expect to send the final distributions in October or November of this year.



TO CONTACT US:



|        |  |                                                  
|------- |  | -------------------------------------------------
|MAIL:   |  | Investor Relations, 101 W. 11thStreet, Suite 1110
|        |  | Kansas City, MO 64105                            
|PHONE:  |  | 800-547-7686 OR (816) 421-7444                   
|FAX:    |  | (816) 221.2130                                   
|E-MAIL: |  | mevans@theprovogroup.com                         



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DIVALL INCOME PROPERTIES 3 L.P.

STATEMENTS OF INCOME AND CASH FLOW CHANGES

FOR THE THREE MONTH PERIOD ENDED
MARCH 31, 2002



|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|------------------------------------------------------------- |  | --------------------- | ------- | - | -------------------- | - | ------- | ------------- |  | - | ------- | -
|                                                              |  | PROJECTED             |         |   | ACTUAL               |   |         | VARIANCE      | 
|                                                              |  | 1ST QUARTER03/31/2002 |         |   | 1STQUARTER03/31/2002 |   |         | BETTER(WORSE) | 
|OPERATING REVENUES                                            |  |                       |         |   |                      |   |         |               |  |   |         |  
|Rental income                                                 |  | $                     | 51,875  |   |                      | $ | 52,196  |               |  | $ | 321     |  
|Interest income                                               |  |                       | 5,400   |   |                      |   | 1,961   |               |  |   | (3,439  | )
|Other income                                                  |  |                       | 0       |   |                      |   | 4,866   |               |  |   | 4,866   |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|TOTAL OPERATING REVENUES                                      |  | $                     | 57,275  |   |                      | $ | 59,022  |               |  | $ | 1,747   |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|OPERATING EXPENSES                                            |  |                       |         |   |                      |   |         |               |  |   |         |  
|Insurance                                                     |  | $                     | 1,224   |   |                      | $ | 1,225   |               |  | $ | (1      | )
|Management fees                                               |  |                       | 17,525  |   |                      |   | 17,571  |               |  |   | (46     | )
|Overhead allowance                                            |  |                       | 1,414   |   |                      |   | 1,313   |               |  |   | 102     |  
|Advisory Board                                                |  |                       | 2,314   |   |                      |   | 2,519   |               |  |   | (205    | )
|Administrative                                                |  |                       | 6,289   |   |                      |   | 7,088   |               |  |   | (799    | )
|Professional services                                         |  |                       | 5,050   |   |                      |   | 4,795   |               |  |   | 255     |  
|Auditing                                                      |  |                       | 10,900  |   |                      |   | 10,145  |               |  |   | 755     |  
|Legal                                                         |  |                       | 2,250   |   |                      |   | 9,422   |               |  |   | (7,172  | )
|Defaulted tenants                                             |  |                       | 600     |   |                      |   | 12,080  |               |  |   | (11,480 | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|TOTAL OPERATING EXPENSES                                      |  | $                     | 47,566  |   |                      | $ | 66,157  |               |  | $ | (18,591 | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|INVESTIGATION AND RESTORATION EXPENSES                        |  | $                     | 0       |   |                      | $ | 0       |               |  | $ | 0       |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|NON-OPERATING EXPENSES                                        |  |                       |         |   |                      |   |         |               |  |   |         |  
|Depreciation                                                  |  | $                     | 14,647  |   |                      | $ | 14,647  |               |  | $ | (0      | )
|Amortization                                                  |  |                       | 264     |   |                      |   | 264     |               |  |   | (0      | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|TOTAL NON-OPERATING EXPENSES                                  |  | $                     | 14,911  |   |                      | $ | 14,911  |               |  | $ | (0      | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|TOTAL EXPENSES                                                |  | $                     | 62,477  |   |                      | $ | 81,068  |               |  | $ | (18,591 | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|NET INCOME (LOSS)                                             |  | $                     | (5,202  | ) |                      | $ | (22,046 | )             |  | $ | (16,844 | )
|                                                              |  |                       |        
|                                                              |  |                       |         |   |                      |   |         | VARIANCE      | 
|OPERATING CASH RECONCILIATION:                                |  |                       |         |   |                      |   |         |               |  |   |         |  
|Depreciation and amortization                                 |  |                       | 14,911  |   |                      |   | 14,911  |               |  |   | 0       |  
|Recovery of amounts previously written off                    |  |                       | 0       |   |                      |   | 0       |               |  |   | 0       |  
|(Increase) Decrease in current assets                         |  |                       | 13,359  |   |                      |   | (2,479  | )             |  |   | (15,838 | )
|Increase (Decrease) in current liabilities                    |  |                       | (23,582 | ) |                      |   | (16,012 | )             |  |   | 7,570   |  
|(Increase) Decrease in cash reserved for payables             |  |                       | 33,144  |   |                      |   | 16,012  |               |  |   | (17,132 | )
|Advance from/(to) future cash flows for current distributions |  |                       | (56,900 | ) |                      |   | (39,900 | )             |  |   | 17,000  |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|Net Cash Provided From (Used in) Operating Activities         |  | $                     | (24,270 | ) |                      | $ | (49,514 | )             |  | $ | (25,244 | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|CASH FLOWS FROM (USED IN) INVESTING AND FINANCING ACTIVITIES  |  |                       |         |   |                      |   |         |               |  |   |         |  
|Investment in Indemnification Trust (interest earnings)       |  |                       | (4,500  | ) |                      |   | (1,524  | )             |  |   | 2,976   |  
|Principal Payments Received                                   |  |                       | 45,250  |   |                      |   | 45,250  |               |  |   | 0       |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|Net Cash Provided from Investing And Financing Activities     |  | $                     | 40,750  |   |                      | $ | 43,726  |               |  | $ | 2,976   |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|Total Cash Flow (Deficit) For Quarter                         |  | $                     | 16,480  |   |                      | $ | (5,788  | )             |  | $ | (22,268 | )
|                                                              |  |                       |        
|Cash Balance Beginning of Period                              |  |                       | 240,879 |   |                      |   | 240,148 |               |  |   | (731    | )
|Less 4th quarter distributions paid 2/02                      |  |                       | (40,000 | ) |                      |   | (25,000 | )             |  |   | 15,000  |  
|Change in cash reserved for payables or distributions         |  |                       | 23,756  |   |                      |   | 23,888  |               |  |   | 132     |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|Cash Balance End of Period                                    |  | $                     | 241,115 |   |                      | $ | 233,248 |               |  | $ | (7,867  | )
|                                                              |  |                       |        
|Cash reserved for 1st quarter L.P. distributions              |  |                       | (15,000 | ) |                      |   | 0       |               |  |   | 15,000  |  
|Cash advanced from (reserved for) future distributions        |  |                       | (56,900 | ) |                      |   | (39,900 | )             |  |   | 17,000  |  
|Cash reserved for payment of payables                         |  |                       | (38,709 | ) |                      |   | (62,645 | )             |  |   | (23,936 | )
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|Unrestricted Cash Balance End of Period                       |  | $                     | 130,507 |   |                      | $ | 130,703 |               |  | $ | 197     |  
|                                                              |  |                       |         |   |                      |   |         |               |  |   |         |  
|                                                              |  |                       |        
|                                                              |  | PROJECTED             |         |   | ACTUAL               |   |         | VARIANCE      | 
|* Quarterly Distribution                                      |  | $                     | 15,000  |   |                      | $ | 0       |               |  | $ | (15,000 | )
|Mailing Date                                                  |  |                       | 5/15/02 |   |                      |   |         |               |  |   |        |  

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|* | Refer to distribution letter for detail of quarterly distribution.
|- | ------------------------------------------------------------------



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DIVALL INCOME PROPERTIES 3 LIMITED PARTNERSHIP

2002 PROPERTY SUMMARY

AND RELATED
RECEIPTS



PROJECTIONS FOR

DISCUSSION PURPOSES



PORTFOLIO(Note 1)

|                                |  |                |  |             |  |                |           |        |   |        |                     |           |  |         |  |                               |  |                     |   |         |           |  |           |  |                |   |         |  
|------------------------------- |  | -------------- |  | ----------- |  | -------------- | --------- | ------ | - | ------ | ------------------- | --------- |  | ------- |  | ----------------------------- |  | ------------------- | - | ------- | --------- |  | --------- |  | -------------- | - | ------- | -
|                                |  |                |  | REAL ESTATE |  |                | EQUIPMENT |        |   | TOTALS |                    
|CONCEPT                         |  | LOCATION       |  | COST        |  | ANNUALBASERENT |           | %YIELD |   |        | LEASEEXPIRATIONDATE |           |  | COST    |  | PRINCIPALRETURNEDAS OF 1/1/94 |  | ANNUALLEASERECEIPTS |   | %RETURN |           |  | COST      |  | ANNUALRECEIPTS |   | %RETURN |  
|APPLEBEES (6)                  |  | PITTSBURGH,PA  |  | 891,333     |  | 116,040        |           | 13.02  | % |        |                     |           |  | 290,469 |  | 172,713                       |  |                     |   | 0.00    | %         |  | 1,239,896 |  | 116,040        |   | 9.36    | %
|                               |  |               |  |             |  |                |           |        |   |        |                     |           |  | 58,094  |  | 30,059                        |  |                     |   | 0.00    | %         |  |           |  |                |   |         |  
|VACANT (5)                      |  | CO SPRINGS,CO  |  | 580,183     |  | 0              |           | 0.00   | % |        |                     |           |  | 210,976 |  | 48,179                        |  | 0                   |   | 0.00    | %         |  | 791,159   |  | 0              |   | 0.00    | %
|HARDEES (3) (6)                |  | ST. FRANCIS,WI |  | 1,194,381   |  | 92,004         |           | 7.70   | % |        | (2                  | )         |  | 369,688 |  | 93,755                        |  | 0                   |   | 0.00    | %         |  | 1,648,569 |  | 92,004         |   | 5.58    | %
|                               |  |               |  |             |  |                |           |        |   |        | (2                  | )         |  | 84,500  |  | 19,024                        |  | 0                   |   | 0.00    | %         |  |           |  |                |   |         |  
|VACANT (4) (6)                  |  | OAK CREEK,WI   |  | 1,341,906   |  | 0              |           | 0.00   | % |        |                     |           |  | 482,078 |  | 91,527                        |  | 0                   |   | 0.00    | %         |  | 1,929,472 |  | 0              |   | 0.00    | %
|                               |  |               |  |             |  |                |           |        |   |        |                     |           |  | 105,488 |  | 20,028                        |  | 0                   |   | 0.00    | %         |  |           |  |                |   |         |  
|                                |  |                |  |             |  |                |           |        |   |        |                     |           |  |         |  |                               |  |                     |   |         |           |  |           |  |                |   |         |  
|PORTFOLIO TOTALS (4 Properties) |  | 4,007,803      |  | 208,044     |  | 5.19           | %         |        |   |        |                     | 1,601,293 |  | 475,285 |  | 0                             |  | 0.00                | % |         | 5,609,096 |  | 208,044   |  | 3.71           | %
|                                |  |                |  |             |  |                |           |        |   |        |                     |           |  |         |  |                               |  |                     |   |         |           |  |           |  |                |   |         |  

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|Note 1: | This property summary includes only property and equipment held by the Partnership at March 31, 2002.
|------- | -----------------------------------------------------------------------------------------------------

|2: | The lease was terminated and the equipment sold to Hardees Food Systems in conjunction with their assumption of the Terratron leases.
|-- | --------------------------------------------------------------------------------------------------------------------------------------

|3: | This lease was assumed by Hardees Food Systems at rental rates lower than those stated in the original lease.
|-- | --------------------------------------------------------------------------------------------------------------

|4: | The lease with Hardees Food Systems was terminated as of April 30, 2001.
|-- | -------------------------------------------------------------------------

|5: | The lease with Dennys- Colorado Springs was terminated in the Fourth Quarter of 2001 due to bankruptcy proceedings. Management has executed a contract to sell the vacant
property at a purchase price of $775,000.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6: | Management has accepted an offer to sell the properties at an aggregate purchase price of $2,775,000. However, it is expressly conditioned upon the Limited Partners approval to sell
all of the Partnerships properties and subsequently liquidate and dissolve the Partnership not later than December 31, 2002.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------