UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark one)

[x]                   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended              June 30, 1999
--------------------------------------------------------------------------------

                                       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                        0-11176
--------------------------------------------------------------------------------

                            NTS-PROPERTIES III
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

 Georgia                                             61-1017240
--------------------------------------------------------------------------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

10172 Linn Station Road
Louisville, Kentucky                                   40223
--------------------------------------------------------------------------------
(Address of principal executive                      (Zip Code)
offices)

Registrant's telephone number,
including area code                                (502) 426-4800
--------------------------------------------------------------------------------

                                Not Applicable
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report

Indicate by check mark whether the registrant (l) 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,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                                              YES  X   NO ____

Exhibit Index: See page 17
Total Pages: 18

<PAGE>


                                TABLE OF CONTENTS
                                -----------------


                                                                          Pages
                                                                          -----

                                     PART I

Item 1.     Financial Statements

            Balance Sheets and Statement of Partners' Equity
              as of June 30, 1999 and December 31, 1998                       3

            Statements of Operations
              For the three months and six months ended June 30,
              1999 and 1998                                                   4

            Statements of Cash Flows
              For the six months ended June 30, 1999 and 1998                 5

            Notes To Financial Statements                                   6-9

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                         10-16

Item 3. Quantitative and Qualitative Disclosures About
                 Market Risk                                                 16

                                     PART II

3.     Defaults upon Senior Securities                                       17

5.     Other Information                                                     17

6.     Exhibits and Reports on Form 8-K                                      17

Signatures                                                                   18


                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
                ------------------------------------------------

                                                 As of              As of
                                             June 30, 1999    December 31, 1998*
ASSETS
<CAPTION>
<S>                                          <C>              <C>
Cash and equivalents                          $   324,958      $   233,844
Cash and equivalents - restricted                  41,416          139,350
Accounts receivable, net of allowance
 for doubtful accounts of $8,625 at
 June 30, 1999 and $3,034 at
 December 31, 1998                                238,398          184,327
Land, buildings and amenities, net              9,401,871        9,834,002
Construction in progress                        1,341,445          385,332
Other assets                                      421,234          393,301
                                              -----------      -----------

  Total assets                                $11,769,322      $11,170,156
                                              ===========      ===========

LIABILITIES AND PARTNERS' EQUITY

Mortgages payable                             $ 7,330,953      $ 6,656,145
Accounts payable - operations                      80,048          40,632
Accounts payable - construction                   230,608          180,272
Security deposits                                 108,936           98,611
Other liabilities                                 168,297           73,550
                                              -----------      -----------

                                                7,918,842        7,049,210

Partners' equity                                3,850,480        4,120,946
                                              -----------      -----------

                                              $11,769,322      $11,170,156
                                              ===========      ===========
</TABLE>

<TABLE>
<CAPTION>

                                      Limited         General
                                      Partners        Partner          Total
                                   ------------    ------------     -----------
PARTNERS' EQUITY
<S>                                <C>             <C>             <C>

Initial equity                     $ 15,600,000    $  8,039,710    $ 23,639,710
Adjustment to historical basis               --      (5,455,030)     (5,455,030)
                                   ------------    ------------     -----------

                                   $ 15,600,000    $  2,584,680    $ 18,184,680

Net income (loss) -prior years          374,637      (2,488,305)     (2,113,668)
Net (loss) - current year              (100,167)        (45,296)       (145,463)
Cash distributions declared to
 date                               (11,349,844)       (206,985)    (11,556,829)
Repurchase of limited partnership
 units                                 (518,240)             --        (518,240)
                                   ------------    ------------     -----------

Balances at June 30, 1999          $  4,006,386    $   (155,906)   $  3,850,480
                                   ============    ============     ===========
</TABLE>

*Reference is made to the audited financial statements in the Form 10-K as filed
with the Commission on March 31, 1999.

                                       3

<PAGE>

<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------
<CAPTION>

                                         Three Months Ended        Six Months Ended
                                              June 30,                 June 30,
                                         ------------------        -----------------

                                         1999         1998         1999        1998
                                         --------------------    -------------------
REVENUES:
<S>                                  <C>          <C>          <C>           <C>
  Rental income, net of provision
   for doubtful accounts of $12,194
   (1999) and $0 (1998)              $   685,886  $   953,550  $ 1,434,641   $ 1,800,542
  Rental income - affiliated              73,834       73,834      147,668       149,590
  Interest and other income                  979        2,986        2,090         7,042
                                      ----------   ----------   ----------    ----------

                                         760,699    1,030,370    1,584,399     1,957,174

EXPENSES:
  Operating expenses                     249,103      224,731      450,556       443,059
  Operating expenses - affiliated        103,254       89,106      245,257       211,820
 Write-off of unamortized tenant
  improvements                              --          8,438         --           8,438
  Amortization of capitalized
   leasing costs                           6,370        6,370       12,740        12,740
  Interest expense                       120,563      114,392      236,803       237,254
  Management fees                         41,094       50,922       77,242        99,364
  Real estate taxes                       50,196       52,042      101,757       103,770
  Professional and administrative
   expenses                               30,686       16,767       59,739        31,715
  Professional and administrative expenses -
     affiliated                           23,826       33,779       53,568        70,525
  Depreciation and amortization          244,446      243,635      492,200       472,466
                                      ----------   ----------   ----------    ----------

                                         869,538      840,182    1,729,862     1,691,151
                                      ----------   ----------   ----------    ----------

 Net income (loss) before
  Extraordinary item                    (108,839)     190,188     (145,463)      266,023
 Extraordinary item - write-off of
  Unamortized loan costs                    --         65,258         --          65,258
                                      ----------   ----------   ----------    ----------

 Net income (loss)                   $  (108,839) $   124,930  $  (145,463)  $   200,765
                                      ==========   ==========   ==========    ==========

 Net income (loss) allocated to the
   limited partners:
   Income (loss) before extraordinary
     item                                (86,205)     212,081     (100,167)      310,953
   Extraordinary item                       --        (64,605)        --         (64,605)
                                      ----------   ----------   ----------    ----------

 Net income (loss)                   $   (86,205) $   147,476  $  (100,167)  $   246,348
                                      ==========   ==========   ==========    ==========

 Net income (loss) per limited
  Partnership unit:
 Income (loss) before extraordinary
  item                               $     (6.50) $     15.36  $     (7.54)  $    22.30
  Extraordinary item                         --         (4.68)         --         (4.63)
                                      ----------   ----------   ----------    ----------
 Net income (loss) per limited
  Partnership unit                   $     (6.50) $     10.68  $     (7.54)  $    17.67
                                      ==========   ==========   ==========    ==========
 Weighted average number of units         13,270       13,813       13,286       13,941
                                      ==========   ==========   ==========    ==========
                                                                                                                      ----------
</TABLE>





<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------
<CAPTION>
                                                             Six Months Ended
                                                                 June 30,
                                                  ------------------------------------

                                                  1999                            1998
                                                --------                        --------
<S>                                          <C>                               <C>

CASH FLOWS FROM OPERATING ACTIVITIES

 Net income (loss)                           $  (145,463)                      $ 200,765

 Adjustments to reconcile net income
  to net cash provided by operating
  activities:
 Provision for doubtful accounts                   8,625                            --
 Accrued interest on investment Securities          --                               923
 Amortization of capitalized leasing costs        12,740                          12,740
 Write-off of unamortized tenant
  improvements                                      --                             8,438
 Write-off of unamortized loan costs                --                            65,258
 Depreciation and amortization                   492,200                         472,466
 Changes in assets and liabilities:
 Cash and equivalents - restricted               (27,066)                        (13,139)
 Accounts receivable                             (62,697)                         52,285
 Other assets                                    (19,415)                        (41,319)
 Accounts payable - operations                    39,417                          53,856
 Security deposits                                10,325                          (2,353)
 Other liabilities                                94,747                          (8,232)
                                             -----------                        --------

 Net cash provided by operating
  activities                                     403,413                         801,688
                                             -----------                        --------
CASH FLOWS FROM INVESTING ACTIVITIES
 Additions to land, buildings, and amenities  (1,009,934)                       (953,453)
 Accounts payable - construction                  50,336                            --
 Decrease in cash and equivalents
  - restricted                                      --                           172,755
 Purchase of investment securities                  --                              --
 Maturity of investment securities                  --                           100,668
                                             -----------                        --------
 Net cash used in investing activities          (959,598)                       (680,030)
                                             -----------                        --------
CASH FLOWS FROM FINANCING ACTIVITIES
 Increase in mortgage payable                    787,107                       6,800,000
 Principal payments on mortgages payable        (112,299)                     (6,769,951)
 Increase in loan costs                          (27,509)                        (77,295)
 Repurchase of limited partnership units        (125,000)                        (75,000)
 Decrease (increase)in cash and equivalents
  - restricted                                   125,000                            --
                                             -----------                        --------
 Net cash provided by (used in)
  financing activities                           647,299                        (122,246)
                                             -----------                        --------
 Net increase (decrease) in cash
  and equivalents                                 91,114                            (588)

CASH AND EQUIVALENTS, beginning
 of Period                                       233,844                         266,940
                                             -----------                        --------
CASH AND EQUIVALENTS, end of period         $    324,958                       $ 266,352
                                             ===========                        ========

 Interest paid on a cash basis              $    236,803                       $ 212,650
                                             ===========                        ========
</TABLE>
                                       5

<PAGE>

                               NTS-PROPERTIES III
                               ------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

The financial  statements included herein should be read in conjunction with the
Partnership's  1998 Form 10-K as filed with the Commission on March 31, 1999. In
the opinion of the General Partner,  all adjustments  (only consisting of normal
recurring  accruals)  necessary  for a fair  presentation  have been made to the
accompanying financial statements for the three months and six months ended June
30, 1999 and 1998.

1.   Changes to the Names of Properties Held by the Partnership
     ----------------------------------------------------------

     In the second  quarter of 1999,  Plainview  Plaza II was renamed NTS Center
     and Plainview Triad North was renamed Plainview Center.

2.   Use of Estimates in the Preparation of Financial Statements
     -----------------------------------------------------------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

3.   Concentration of Credit Risk
     ----------------------------

     NTS-Properties  III  is a  limited  partnership  which  owns  and  operates
     commercial  properties  in  Norcross,  Georgia,  a suburb of  Atlanta,  and
     Jeffersontown,  Kentucky, a suburb of Louisville.  One tenant in NTS Center
     occupies 46% of the office building's net rentable area.  Substantially all
     of the  Partnership's  tenants are local businesses or are businesses which
     have operations in the location in which they lease space.

4.   Cash and Equivalents - Restricted
     ---------------------------------

     Cash and  equivalents  -  restricted  represents  1)funds  which  have been
     escrowed  with a  mortgage  company  for NTS  Center's  property  taxes  in
     accordance with the loan  agreement,  and 2)funds which the Partnership has
     reserved for the repurchase of limited partnership Units (December 31, 1998
     balance only).

5.   Interest Repurchase Reserve
     ---------------------------

     Pursuant  to  Section  16.4  of  the  Partnership's  Amended  and  Restated
     Agreement of Limited Partnership,  the Partnership  established an Interest
     Repurchase  Reserve in 1995. During the years ended December 31, 1998, 1997
     and  1996,  the  Partnership   has  funded   $75,000,   $0,  and  $243,700,
     respectively,  to the reserve.  For the six months ending June 30, 1999 the
     Partnership has funded $125,000 to the reserve.  Through June 30, 1999, the
     Partnership  has repurchased a total of 2,330 Units for $518,240 at a price
     ranging  from  $208 to $250  per  Unit.  The  offering  price  per Unit was
     established  by the  General  Partner in its sole  discretion  and does not
     purport to  represent  the fair market  value or  liquidation  value of the
     Units.  Repurchased  Units are retired by the Partnership,  thus increasing
     the percentage of ownership of each remaining limited partner investor. The
     Interest  Repurchase Reserve was funded from cash reserves.  The balance in
     the reserve at June 30, 1999 was $0.

6.   Tender Offers
     -------------

     On September 30, 1998, the  Partnership  and ORIG, LLC, an affiliate of the
     Partnership,  (the  "Offerors")  commenced a Tender Offer to purchase up to
     1,000 Units of the  Partnership's  limited  Partnership Units at a price of
     $250 per Unit as of the date of the Offering.  The initial  expiration date
     of  the  Offer  was  December  29,  1998,  and  this  expiration  date  was
     subsequently extended through

                                       6
<PAGE>

6.   Tender Offers - continued
     -------------------------

     March 31, 1999. A total of 1,160 Units were tendered and all Units tendered
     were accepted by the Offerors.  The  Partnership  repurchased 500 Units and
     ORIG,  LLC  purchased  660 Units at a total cost of $290,000  plus Offering
     expenses.

     See Note 12, Subsequent  Events,  for information  regarding a Tender Offer
     which commenced July 27, 1999.

7.   Mortgages Payable
     -----------------

     Mortgages payable consist of the following:


                                                        June 30,    December 31,
                                                          1999         1998
                                                     ------------ --------------
     Mortgage  payable  to an  insurance  company
     bearing  interest  at  6.89%, maturing April 10,
     2015, secured by land and buildings             $ 6,543,846   $ 6,656,145

     $2,000,000  Mortgage  payable to a bank
     maturing March 1, 2001,  secured by land and
     buildings,  bearing a variable  interest of
     prime rate minus .25%. The current rate at
     June 30, 1999 as 7.5%.                              787,107       --
                                                      ----------    ----------

                                                     $ 7,330,953   $ 6,656,145
                                                      ==========    ==========

     Based on the borrowing  rates  currently  available to the  Partnership for
     mortgages with similar terms and average maturities, the fair value of long
     term debt approximates carrying value.

8.   Basis of Property
     -----------------

     Statement of Financial  Accounting Standards (SFAS) no. 121, Accounting for
     the  Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets  to be
     Disposed Of,  specifies  circumstances in which certain  long-lived  assets
     must be reviewed for impairment. If such review indicates that the carrying
     amount of an asset exceeds the sum of its expected  future cash flows,  the
     asset's  carrying  value  must  be  written  down  to  fair  market  value.
     Application  of this standard  during the three months and six months ended
     June 30, 1999 and 1998 did not result in an impairment loss.

9.   Reclassification of 1998 Financial Statements
     ---------------------------------------------

     Certain reclassifications have been made to the December 31, 1998 financial
     statements  to  conform  with  the  June 30,  1999  classifications.  These
     reclassifications have no effect on previously reported operations.

                                       7

<PAGE>


10.  Related Party Transactions
     --------------------------

     Property  management  fees of $77,242 and $99,364 for the six months  ended
     June 30, 1999 and 1998, respectively, were paid to NTS Development Company,
     an affiliate  of the General  Partner,  pursuant to an  agreement  with the
     Partnership.

     The fee is equal to 5% of gross revenues from the Partnership's properties.
     Also  permitted by an  agreement,  NTS  Development  Company will receive a
     repair and  maintenance fee equal to 5.9% of costs incurred which relate to
     capital  improvements.  The Partnership  incurred  $70,922 and $51,082 as a
     repair and  maintenance  fee during the six months  ended June 30, 1999 and
     1998,  respectively,  and has  capitalized  this  cost  as a part of  land,
     buildings and amenities. As permitted by an agreement, the Partnership also
     was charged the following amounts from NTS Development  Company for the six
     months ended June 30, 1999 and 1998. These charges include items which have
     been  expensed  as  operating  expenses   affiliated  or  professional  and
     administrative  expenses - affiliated and items which have been capitalized
     as  other  assets,  land,  buildings  and  amenities,  or  construction  in
     progress. These charges were as follows:

                                                  1999              1998
                                            ---------------   ----------------
                Leasing                        $  98,727         $ 80,372
                Administrative                    69,848           85,429
                Property manager                 123,456          114,288
                Other                             62,633           36,861
                                                --------          -------

                                               $ 354,664         $316,950
                                                ========          =======

     During the six months ended June 30, 1999 and 1998, NTS Development Company
     leased  20,368  square  feet in NTS  Center at a rental  rate of $14.50 per
     square foot. The Partnership received  approximately  $148,000 and $150,000
     in rental payments from NTS Development Company during the six months ended
     June 30, 1999 and 1998,  respectively.  The lease term for NTS  Development
     Company ends on March 31, 2002.

11   Commitments and Contingencies
     -----------------------------

     One tenant at Plainview Center occupied  approximately 65% of the building.
     During the third quarter of 1997, the Partnership  received notice that the
     tenant would vacate the property at the end of the lease term, August 1998.
     The Partnership was able to negotiate a 30 day renewal  extension  (through
     September 30, 1998) with the tenant for approximately  63,000 leased square
     feet.   The   Partnership   was  also  able  to  negotiate  a  renewal  for
     approximately 11,000 square feet of the original 63,000 square feet through
     March 31, 1999. Costs associated with this renewal were not significant. As
     a result of this tenant  vacating the remainder of their space on March 31,
     1999,  there will likely be a protracted  period for the property to become
     fully leased again and substantial  funds will likely be needed for leasing
     expenses; especially those needed to refinish space for new tenants.

     At Plainview  Center,  the  Partnership  is renovating  the common area and
     exterior building.  These renovations will be designed to make the property
     more marketplace competitive and enhance its value. The estimated cost of

                                       8

<PAGE>

11.  Commitments and Contingencies - continued
     -----------------------------------------

     the renovations which began during 1998 is approximately $1,250,000 and the
     renovation  is  expected to be  completed  by the end of the 3rd quarter of
     1999. The renovation and leasing costs  discussed above will be funded from
     the loan  proceeds of a $2,000,000  note payable  obtained on March 2, 1999
     and cash reserves. If necessary,  it may be possible for the Partnership to
     increase the note payable secured by Plainview Center. However, there is no
     assurance that additional  financing will be available when needed, or that
     any financing will be on favorable terms.

12.  Subsequent Events
     -----------------

     On July 1, 1999 Gregory A. Wells was hired as Executive  Vice  President by
     NTS Capital Corporation,  General Partner of NTS-Properties Associates, the
     General Partner of  NTS-Properties  III. Mr. Wells will serve as the senior
     Accounting and Financial Officer of NTS Capital Corporation.

     On July 27,  1999,  the  Partnership  and ORIG,  LLC, an  affiliate  of the
     Partnership,  ("the  Offerors")  commenced a Tender Offer to purchase up to
     1,000 of the Partnership's limited partnership Units at a price of $250 per
     Unit.  Although the  Partnership  and ORIG,  LLC believe that this price is
     appropriate,  the price of $250 per Unit may not equate to the fair  market
     value or the liquidation value of the Unit, and is less than the book value
     per Unit as of the  offering  date.  Approximately  $270,000  ($250,000  to
     purchase  1,000 Units plus  approximately  $20,000 for expenses  associated
     with the Offer) is required to purchase all 1,000  Units.  The offer stated
     that the  Partnership  will purchase the first 500 Units  tendered and fund
     its purchases and its portion of the expenses from cash  reserves.  If more
     than 500 Units are  tendered,  ORIG,  LLC will purchase up to an additional
     500 Units. If more than 1,000 Units are tendered, the Partnership and ORIG,
     LLC  may  choose  to  acquire  the  additional  Units  on the  same  terms.
     Otherwise,  tendered  Units will be  purchased  on a pro rata basis.  Up to
     1,000 Units that are  acquired by the  Partnership  will be retired.  Units
     that are  acquired by ORIG,  LLC will be held by it. The  General  Partner,
     NTS-Properties  Associates,  does not intend to  participate  in the Tender
     Offer.  The expiration  date of the original Offer will be October 29, 1999
     unless extended.

13.  Segment Reporting
     -----------------

     The  Partnership  adopted SFAS No. 131,  Disclosures  about  Segments of an
     Enterprise and Related Information, during the fourth quarter of 1998. SFAS
     No. 131  established  standards for reporting  information  about operating
     segments in annual financial  statements and requires selected  information
     about  operating  segments in interim  financial  reports issued to limited
     partners.  Operating  segments are defined as  components  of an enterprise
     about which separate  financial  information is available that is evaluated
     regularly by the chief operating  decision maker, or decision making group,
     in deciding how to allocate  resources  and in assessing  performance.  The
     standard also allows entities to aggregate operating segments into a single
     segment if the  segments  are similar in each of the six criteria set forth
     in SFAS No. 131. The  Partnership's  chief operating  decision-maker is the
     General Partner.  The Company's  reportable operating segments include only
     one segment - Commercial real estate operations.

                                       9

<PAGE>

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

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  is  structured in four major  sections.  The first section  provides
information related to occupancy levels and rental and other income generated by
the  Partnership's  properties.  The second analyzes  results of operations on a
consolidated  basis.  The final  sections  address  consolidated  cash flows and
financial   condition.   Discussion   of  certain   market  risks  also  follow.
Management's   analysis  should  be  read  in  conjunction  with  the  financial
statements in Item 1, and the cautionary statements below.

Cautionary Statements
---------------------

Some of the statements included in Item 2, Management's  Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  may be  considered  to be
"forward-looking  statements" since such statements relate to matters which have
not yet occurred.  For example,  phrases such as "the Partnership  anticipates",
"believes" or "expects" indicate that it is possible that the event anticipated,
believed or expected may not occur. Should such event not occur, then the result
which  the  Partnership  expected  also may not  occur  or occur in a  different
manner, which may be more or less favorable to the Partnership.  The Partnership
does not  undertake  any  obligations  to  publicly  release  the  result of any
revisions to these  forward-looking  statements  that may be made to reflect any
future events or circumstances.

Any forward-looking  statements included in Management's Discussion and Analysis
of Financial  Condition and Results of Operations,  or elsewhere in this report,
which reflect  management's best judgement based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking  statements as a result of a number of factors, including
but not  limited  to those  discussed  below.  Any  forward-looking  information
provided by the  Partnership  pursuant to the safe harbor  established by recent
securities legislation should be evaluated in the context of these factors.

The Partnership's principal activity is the leasing and management of commercial
office buildings and a business center. If a major commercial tenant defaults on
its  lease,  the  Partnership's  ability  to make  payments  due  under its debt
agreements,  payment of operating costs and other partnership  expenses would be
directly  impacted.  A lessee's  ability to make  payments  are subject to risks
generally  associated with real estate,  many of which are beyond the control of
the Partnership,  including general or local economic  conditions,  competition,
interest rates, real estate tax rates, other operating expenses and acts of God.

In the second  quarter of 1999,  Plainview  Plaza II was  renamed NTS Center and
Plainview Triad North was renamed Plainview Center.

                                       10

<PAGE>

The  occupancy  levels  at the  Partnership's  properties  as of June 30 were as
follows:

                                                     1999(1)         1998
                                                  --------------- -----------

NTS Center                                             100%          100%

Plainview Center(2)                                     21%           91%

Peachtree Corporate Center                              79%           86%

(1)     With the exception of Plainview  Center,  current  occupancy  levels are
        considered  adequate  to continue  the  operation  of the  Partnership's
        properties. See below for details.

(2)     The  decrease in  occupancy  is the result of a tenant  vacating  63,000
        square feet,  52,000 on September 30, 1998 and 11,000 on March 31, 1999.
        In the opinion of the General Partner of the  Partnership,  the decrease
        in period-ending  occupancy is only a temporary fluctuation and does not
        represent a permanent downward occupancy trend. The Partnership  expects
        there will be a protracted  period for Plainview  Center to become fully
        leased  again.  During  this  period,  which is  unknown  at this  time,
        Partnership  revenues in 1999 will most likely be  decreased as compared
        to revenues during 1998.

The Average  Occupancy levels at the  Partnership's  properties during the three
months and six months ended June 30 were as follows:

                               Three Months Ended            Six Months Ended
                                    June 30,                    June 30,
                              ---------------------         -------------------
                              1999             1998         1999           1998
                              -----            ----         ----           -----
NTS Center                    100%             100%         100%            96%
Plainview Center (3)           21%              89%          28%            88%
Peachtree Corporate Center     81%              86%          85%            87%

(3)      In the opinion of the General Partner of the Partnership,  the decrease
         in  average  occupancy  is only a  temporary  fluctuation  and does not
         represent a permanent downward occupancy trend.

The following is an analysis of material  changes in results of  operations  for
the periods  ending  June 30, 1999 and 1998.  Items that did not have a material
impact on operations for the periods listed above have been eliminated from this
discussion.

                                       11

<PAGE>

The rental and other income  generated by the  Partnership's  properties for the
three months and six months ended June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>

                                                 Three Months Ended                      Six Months Ended
                                                      June 30,                               June 30,
                                               1999               1998               1999                1998
                                        ------------------- ------------------ ------------------ -------------------
<S>                                             <C>                <C>                <C>                 <C>
NTS Center                                      $  383,816         $  391,380         $  773,331          $  734,744

Plainview Center                                $   75,275         $  342,714         $  201,501          $  638,450

Peachtree Corporate Center
                                                $  300,629         $  293,625         $  607,477          $  577,575
                                                 ---------          ---------          ---------           ---------

                                                $  759,720         $1,027,719         $1,582,309          $1,950,769
                                                 =========          =========          =========           =========
</TABLE>

Rental and other income decreased  approximately $268,000 or 26% and $368,000 or
19%  for the  three  months  and six  months  ended  June  30,  1999  and  1998,
respectively.  The  decreases  are  primarily  a result of a decrease in average
occupancy  at  Plainview  Center  following  the  move-out  of  one  tenant  who
previously occupied 63,000 square feet or 65% of the building.

The Partnership  expects there will be a protracted  period for Plainview Center
to become fully leased again. During this period, which is unknown at this time,
Partnership  revenues  in 1999 will most  likely be  decreased  as  compared  to
revenues during 1998.

In cases of tenants who cease making rental  payments or abandon the premises in
breach of the lease terms, the Partnership pursues collection through the use of
collection  agencies or other remedies  available by law when  practical.  There
have been no significant funds recovered as a result of these actions during the
three  months or six months  ended June 30,  1999 or 1998.  As of June 30,  1999
there were no on-going cases.

Operating  expenses  -  affiliated  increased  approximately  $14,000 or 16% and
$33,000  or 16% for the three  months and six months  ended  June 30,  1999,  as
compared  to the same  periods  in 1998.  The  increases  are  primarily  due to
increased  architectural  and leasing salaries at Plainview Center and increased
administrative  salaries at Peachtree  Corporate  Center.  Operating  expenses -
affiliated  are expenses  incurred  for  services  performed by employees of NTS
Development Company, an affiliate of the General Partner.

Management  fees are  calculated as a percentage of cash  collections;  however,
revenue  for  reporting  purposes  is on the  accrual  basis.  As a result,  the
fluctuations  of revenues  between  periods may differ from the  fluctuations of
management  fee expense.  The decreases of $10,000 or 19% and $22,000 or 22% for
the three  months and six months  ended June 30,  1999 as  compared  to the same
periods in 1998 are  primarily  a result of the  decreased  occupancy  rates and
related revenues at Plainview Center as described above.

Professional and administrative  expenses increased approximately $14,000 or 83%
and  $28,000 or 88% for the three  months and six months  ended June 30, 1999 as
compared to the same  periods in 1998.  The  increase  is  primarily a result of
costs incurred in connection with the Tender Offer (see discussion below).

                                       12

<PAGE>

Professional and administrative  expenses - affiliated  decreased  approximately
$10,000 or 30% and $17,000 or 24% for the three months and six months ended June
30,  1999 as compared to the same  periods in 1998,  primarily  as a result of a
decrease in salary costs.  Professional and administrative expenses - affiliated
are expenses  incurred for  services  performed by employees of NTS  Development
Company, an affiliate of the General Partner.

Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets which are 5-30 years for land improvements,  30 years
for  buildings,  5-30  years  for  building  improvements  and  5-30  years  for
amenities.  The aggregate cost of the  Partnership's  properties for Federal tax
purposes is approximately $26,341,200.

Consolidated Cash Flows and Financial Condition
-----------------------------------------------

Cash flows provided by (used in):


                                              1999                  1998
                                    --------------------- ----------------------

Operating activities                       $ 403,413              $ 801,688

Investing activities                        (959,598)              (680,030)

Financing activities                         647,299               (122,246)
                                            --------               --------

Net increase (decrease) in cash and
equivalents                                $  91,114              $    (588)
                                            ========               ========

Net cash provided by operating  activities decreased  approximately  $398,000 or
50% for the six months  ended June 30,  1999,  as compared to the same period in
1998. This decrease was primarily driven by a decrease in net income as a result
of decreased  revenues from Plainview  Center (as discussed  above),  as well as
negative changes in various working capital accounts.

Net cash used in investing  activities  increased by approximately  $280,000 for
the six months  ended June 30, 1999 as compared to the same period in 1998.  The
increase was primarily due to inflows from  investments  maturing and restricted
cash activity that was present in 1998 but not in 1999.

Net cash provided by (used in) financing  activities was $647,299 and $(122,246)
for the six months ended June 30, 1999 and 1998,  respectively.  The increase in
net  cash  provided  by  financing  activities  in 1999 is the  result  of a new
mortgage loan obtained March 2, 1999 to fund renovations at Plainview Center and
a reduction in loan costs in 1999.

The Partnership  indefinitely suspended distributions starting December 31, 1996
as a result of the anticipated  decrease in occupancy at Plainview Center.  Cash
reserves (which are unrestricted cash and equivalents and investment  securities
as shown on the  Partnership's  balance  sheet as of June 30) were  $324,958 and
$266,352 at June 30, 1999 and 1998, respectively.

In the next 12  months,  the  General  Partner  expects  the  demand  on  future
liquidity to increase as a result of future leasing activity driven primarily by
the decreased occupancy at Plainview Center.

                                       13

<PAGE>

Consolidated Cash Flows and Financial Condition - continued
-----------------------------------------------------------

Demand on future  liquidity  is also  expected  to  increase  as a result of the
common area and  exterior  building  renovation  which is  currently  ongoing at
Plainview  Center.  The renovations have been designed to make the property more
competitive  and enhance its value.  The  estimated  cost of the  renovation  is
approximately  $1,250,000. It is anticipated that the cash flow from operations,
cash reserves and funds  available on the $2,000,000 loan obtained March 2, 1999
will be sufficient to meet the needs of the Partnership.  Through June 30, 1999,
the  Partnership  has  incurred  approximately   $1,040,000  of  the  $1,250,000
estimated Plainview Center renovation.  As of June 30, 1999, the Partnership had
no material commitments for tenant finish improvements.

Due to the fact that no distributions were made during the six months ended June
30, 1999 or 1998, the table which  represents  that portion of the  distribution
that represents a return of capital on a Generally Accepted Accounting Principle
basis has been omitted.

Pursuant to Section 16.4 of the Partnership's  Amended and Restated Agreement of
Limited Partnership,  the Partnership established an Interest Repurchase Reserve
in  1995.  During  the  years  ended  December  31,  1998,  1997 and  1996,  the
Partnership has funded $75,000, $0, and $243,700,  respectively, to the reserve.
For the six months ending June 30, 1999 the  Partnership  has funded $125,000 to
the reserve.  Through June 30, 1999, the  Partnership has repurchased a total of
2,330 Units for  $518,240  at a price  ranging  from $208 to $250 per Unit.  The
offering  price per Unit was  established  by the  General  Partner  in its sole
discretion  and  does  not  purport  to  represent  the  fair  market  value  or
liquidation   value  of  the  Units.   Repurchased  Units  are  retired  by  the
Partnership,  thus  increasing  the  percentage  of ownership of each  remaining
limited partner investor.  The Interest  Repurchase Reserve was funded from cash
reserves. The balance in the reserve at June 30, 1999 was $0.

On  July  27,  1999,  the  Partnership  and  ORIG,  LLC,  an  affiliate  of  the
Partnership,  ("the Offerors")  commenced a Tender Offer to purchase up to 1,000
of the  Partnership's  limited  partnership  Units at a price of $250 per  Unit.
Although the  Partnership  and ORIG, LLC believe that this price is appropriate,
the  price  of $250  per Unit may not  equate  to the fair  market  value or the
liquidation  value of the Unit,  and is less than the book  value per Unit as of
the offering date. Approximately $270,000 ($250,000 to purchase 1,000 Units plus
approximately  $20,000 for  expenses  associated  with the Offer) is required to
purchase all 1,000 Units.  The offer stated that the  Partnership  will purchase
the first 500 Units  tendered  and fund its  purchases  and its  portion  of the
expenses from cash reserves. If more than 500 Units are tendered, ORIG, LLC will
purchase up to an additional  500 Units.  If more than 1,000 Units are tendered,
the Partnership and ORIG, LLC may choose to acquire the additional  Units on the
same terms.  Otherwise,  tendered Units will be purchased on a pro rata basis up
to 1,000 Units that are acquired by the Partnership will be retired.  Units that
are  acquired  by  ORIG,   LLC  will  be  held  by  it.  The  General   Partner,
NTS-Properties  Associates,  does not intend to participate in the Tender Offer.
The  expiration  date of the  original  Offer will be October  29,  1999  unless
extended.

                                       14

<PAGE>

Consolidated Cash Flows and Financial Condition - continued
-----------------------------------------------------------

On  September  30,  1998,  the  Partnership  and ORIG,  LLC, an affiliate of the
Partnership,  (the "Offerors")  commenced a Tender Offer to purchase up to 1,000
Units of the Partnership's limited Partnership Units at a price of $250 per Unit
as of the date of the  Offering.  The initial  expiration  date of the Offer was
December 29, 1998, and this expiration date was  subsequently  extended  through
March 31, 1999. A total of 1,160 Units were tendered and all Units tendered were
accepted by the Offerors.  The  Partnership  repurchased 500 Units and ORIG, LLC
purchased 660 Units at a total cost of $290,000 plus Offering expenses.

The following  describes the efforts being taken by the  Partnership to increase
the occupancy levels at the  Partnership's  properties.  At Peachtree  Corporate
Center in Norcross,  Georgia,  the  Partnership has an on-site leasing agent, an
employee of NTS Development  Company (an affiliate of the General Partner),  who
makes calls to potential tenants, negotiates lease renewals with current tenants
and manages local  advertising with the assistance of NTS Development  Company's
marketing  staff.  The  leasing  and  renewal  negotiations  for NTS  Center and
Plainview  Center are handled by leasing  agents,  employees of NTS  Development
Company, located in Louisville,  Kentucky. The leasing agents are located in the
same city as both  commercial  properties.  All  advertising  for the Louisville
properties is also  coordinated by NTS  Development  Company's  marketing  staff
located in Louisville, Kentucky.

Leases at all the  Partnership's  properties  provide for tenants to  contribute
toward the payment of increases in common area maintenance expenses,  insurance,
utilities  and real  estate  taxes.  This lease  provision  should  protect  the
Partnership's operations from the impact of inflation and changing prices.

Year 2000
---------

All divisions of NTS, the General Partner of the Partnership,  are reviewing the
effort  necessary to prepare its  information  systems (IT) and  non-information
technology  with embedded  technology  (ET) for the Year 2000.  The  information
technology  solutions have been addressed separately for the Year 2000 since the
Partnership  saw the need to move to more  advanced  management  and  accounting
systems made available by new technology  and software  developments  during the
decade of the 1990's.

The PILOT software system, purchased in the early 1990's, is being replaced by a
windows  based  network  system both for NTS'  headquarters  functions and other
locations.  The real estate accounting system developed,  sold, and supported by
the Yardi Company of Santa Barbara,  California  will replace  PILOT.  The Yardi
system has been tested and is compatible with Year 2000 and beyond.  This system
is being  implemented  with the help of third  party  consultants  and should be
fully  operational  by the third quarter of 1999.  NTS' system for  multi-family
apartment  locations was  converted to GEAC's Power Site System  earlier in 1998
and is Year 2000 compliant.

The few remaining  systems not addressed by these conversions are being modified
by NTS' in-house staff of programmers. The Hewlett Packard 3000 system, used for
PILOT and custom  applications,  was  purchased in 1997 and will be part of NTS'
new network. It will be retained as long as necessary to

                                       15

<PAGE>

Year 2000 - continued
---------------------

assure smooth operations and has been upgraded to meet Year 2000 requirements.

All risks identified with information technology are believed to be addressed by
these plans.

The cost of these advances in our systems  technology is not all attributable to
the Year 2000  issue  since  NTS had  already  identified  the need to move to a
network  based system  regardless of the Year 2000.  The costs  involved will be
approximately  $45,000 over 1999.  Costs incurred through December 31, 1998 were
approximately $10,000. These costs primarily include hardware and software.

NTS  property  management  staff has been  surveying  its  vendors  to  evaluate
embedded technology in its alarm systems,  HVAC controls,  telephone systems and
other  computer  associated  facilities.  In a few  cases,  equipment  is  being
replaced. In some cases circuitry is being upgraded.  The cost involved is still
being evaluated. There are no known significant risks that are currently without
solutions.  Management  anticipates that applications  involving ET will be Year
2000 compliant by the third quarter of 1999.

NTS is also currently  addressing the Year 2000 readiness of third parties whose
business interruption could have a material negative impact on its business. All
significant  vendors and tenants have  indicated  that they will be compliant by
the end of 1999. Such assurances are being evaluated and documented.

Management has determined that at the current state of readiness,  the need does
not presently  exist for a contingency  plan.  NTS will continue to evaluate the
need for such a plan.

Despite diligent preparation,  unanticipated third-party failures,  inability of
our tenants to pay rent when due, more general public infrastructure failures or
failure to successfully  conclude NTS' remediation efforts as planned could have
a material  adverse impact on NTS' results of operations,  financial  conditions
and/or cash flows in 1999 and beyond.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
        ----------------------------------------------------------

Our primary  market risk  exposure  with  regards to  financial  instruments  is
changes in interest  rates.  All of the  Partnership's  debt bears interest at a
fixed  rate  with  the  exception  of the  $2,000,000  note  payable  which  the
Partnership  obtained on March 3, 1999.  At June 30,  1999, a  hypothetical  100
basis point increase in interest  rates would not result in  significant  market
risk exposure with regards to the Partnership's financial instruments.

                                       16

<PAGE>

PART II.  OTHER INFORMATION

     3.   Defaults upon Senior Securities
          -------------------------------

          None.

     5.   Other Information
          -----------------

          In anticipation of retirement, Mr. Richard Good, the Vice Chairman and
          former  President  of  NTS Capital  Corporation  and  NTS  Development
          Company,  has  begun  to  decrease  his   responsibilities   with  the
          Partnership  and  its  affiliates.  In  conjunction  with  Mr.  Good's
          decreased responsibilities, Mr.Brian Lavin was appointed President and
          Chief  Operating  Officer of NTS Development  Company  and NTS Capital
          Corporation in February, 1999.

     6.   Exhibits and Reports on Form 8-K
          --------------------------------

          (a)    Exhibits

                 Exhibit 27. Financial Data Schedule

          (b)    Reports on Form 8-K

                 None.

     Items 1,2 and 4 are not applicable and have been omitted.

                                       17

<PAGE>

                                   SIGNATURES
                                   ----------


Pursuant to the  requirements of Section 13 or 15(d) 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.


                                           NTS-PROPERTIES III
                                              (Registrant)

                                           BY:    NTS-Properties Associates,
                                                  General Partner
                                                  BY:   NTS Capital Corporation,
                                                        General Partner


                                                  /s/ Gregory A. Wells
                                                  --------------------
                                                  Gregory A. Wells
                                                  Executive Vice President
                                                  of NTS Capital Corporation

Date: August 13, 1999






                                       18






<PAGE>