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               September 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 the 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, KY                                            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 with
                               since last report.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by the 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 September 30, 1999 and December 31, 1998              3


          Statements of Operations
          For the three months and nine months ended
          September 30, 1999 and 1998                                 4


          Statements of Cash Flows
          For the nine months ended September 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

Item 1.   Legal Proceedings                                          17
Item 2.   Changes in Securities                                      17
Item 3.   Defaults Upon Senior Securities                            17
Item 4.   Submission of Matters to a Vote of Security Holders        17
Item 5.   Other Information                                          17
Item 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 STATEMENTS OF PARTNERS' EQUITY
           -------------------------------------------------
<CAPTION>
                                          As of               As of
                                   September 30, 1999   December 31, 1998
                                   ------------------   -----------------
ASSETS
------
<S>                                  <C>                <C>
Cash and equivalents                 $    226,108       $    233,844
Cash and equivalents - restricted         179,948            139,350
Accounts receivable, net of
 allowance for doubtful accounts of
 $16,954 at September 30, 1999 and
 $3,034 at December 31, 1998              180,671            184,327
Land, buildings and amenities, net      9,090,265          9,834,002
Construction in progress                1,685,222            385,332
Other assets                              506,021            393,301
                                      ------------       ------------
 Total assets                        $ 11,868,235       $ 11,170,156
                                      ============       ============

LIABILITIES AND PARTNERS' EQUITY
--------------------------------

Mortgages payable                    $  7,774,760       $  6,656,145
Accounts payable - operations             145,320             40,632
Accounts payable - construction           283,587            180,272
Security deposits                         140,161             98,611
Other liabilities                         159,433             73,550
                                      ------------       ------------
                                        8,503,261          7,049,210

Commitments and contingencies

Partners' equity                        3,364,974          4,120,946
                                      ------------       ------------
 Total liabilities and partners'
  equity                             $ 11,868,235       $ 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           (563,335)       (67,634)      (630,969)
Cash distributions declared
 to date                         (11,349,844)      (206,985)   (11,556,829)
Repurchase of limited
 partnership Units                      --         (518,240)      (518,240)
                                 ------------   ------------   ------------

Balances at September 30, 1999  $  3,543,218   $   (178,244)  $  3,364,974
                                 ============   ============   ============
</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         Nine Months Ended
                                  September 30,              September 30,
                                  -------------              -------------

                                1999         1998         1999          1998
                                ----         ----         ----          ----
REVENUES:
---------
<S>                           <C>          <C>           <C>         <C>
Rental income, net of
 provision  for doubtful
 accounts of $16,954 (1999)
 and $1,943 (1998)            $  656,889   $  864,393    $2,093,487  $2,664,929
 Rental income - affiliated       73,834       73,834       221,503     223,430
 Interest and other income         3,973        4,026        8,524       11,068
                               ----------   ----------    ----------  ----------

                                 734,696      942,253     2,323,514   2,899,427
EXPENSES:
---------
 Operating expenses              248,921      233,602       712,218     689,402
 Operating expenses -
  affiliated                     115,650       91,363       360,907     303,182
 Loss of disposal of assets      286,123       39,670       290,542      48,108
 Interest expense                131,832      116,213       368,635     353,468
 Managements fees                 39,446       50,140       116,688     149,504
 Real estate taxes                57,924       51,727       159,681     155,496
 Professional and administrative
  expenses                        41,069       14,252       100,808      45,965
 Professional and administrative
  expenses - affiliated           24,028       32,601        77,595     103,127
 Depreciation and amortization   275,208      257,023       767,409     729,489
                               ----------   ----------    ----------  ----------

                               1,220,201      886,591     2,954,483   2,577,741
                               ----------   ----------    ----------  ----------
Net income (loss) before
 extraordinary item             (485,505)      55,662      (630,969)    321,686
Extraordinary item - write-
 off of unamortized loan costs      --           --            --       (65,258)
                               ----------   ----------    ----------  ----------
Net income (loss)             $ (485,505)  $   55,662    $ (630,969) $  256,428
                               ==========   ==========    ==========  ==========

Net income (loss) allocated
to the limited partners:
 Income (loss) before
  extraordinary item            (463,167)      78,970      (563,335)    389,923
 Extraordinary item                 --           --           --        (64,605)
                               ----------   ----------    ----------  ----------
Net income (loss)             $ (463,167)  $   78,970    $ (563,335) $  325,318
                               ==========   ==========    ==========  ==========

Net income (loss) per
limited partnership Unit:
Income (loss) before
 extraordinary item           $   (34.90)  $     5.73    $  (42.41)  $    28.08
Extraordinary item                   --           --           --         (4.65)
                               ----------   ----------    ---------   ----------
Net income (loss) per
limited partnership Unit      $   (34.90)  $     5.73    $  (42.41)  $    23.43
                               ==========   ==========    =========   ==========

Weighted average number of
 units                            13,270       13,770       13,281       13,883
                               ==========   ==========    =========   ==========
</TABLE>
                                       4

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

                            STATEMENTS OF CASH FLOWS
                            ------------------------
<CAPTION>
                                    Nine Months Ended September 30,

                                       1999                1998
CASH FLOWS FROM OPERATING
ACTIVITIES
<S>                                 <C>                 <C>
 Net income (loss)                  $  (630,969)        $   256,428
 Adjustments to reconcile net
  income to net cash provided by
  operating activities:
   Provision for doubtful accounts       16,954               1,943
   Accrued interest on investment
    securities                             --                   923
   Loss on disposal of assets           290,542              48,108
   Write-off of unamortized loan
    costs                                  --                65,258
   Depreciation and amortization        767,409             729,489
   Changes in assets and
    liabilities:
    Cash and equivalents - restricted   (40,599)            (41,489)
    Accounts receivable                 (13,298)            111,520
    Other assets                       (105,053)            (13,790)
    Accounts payable - operations       104,687              41,465
    Security deposits                    41,550             (10,024)
    Other liabilities                    85,883              (9,375)
                                     -----------         -----------
 Net cash provided by operating
  activities                            517,106           1,180,456
                                     -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
 Additions to land, buildings and
  amenities                          (1,603,665)         (1,163,170)
 Accounts payable - construction        103,315                --
 Decrease in cash and equivalents -
  restricted                               --               171,538
 Maturity of investment
  securities                               --               100,668
                                     -----------         -----------
 Net cash used in investing
  activities                         (1,500,350)           (890,964)
                                     -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
 Increase in mortgage payable         1,288,527           6,800,000
 Principal payments on mortgages
  payable                              (169,912)         (6,823,739)
 Increase in loan costs                 (18,107)            (77,295)
 Repurchase of limited partnership
  Units                                (125,000)            (75,000)
 Increase in cash and equivalents -
  restricted                               --              (125,000)
                                     -----------         -----------
 Net cash provided by (used in)
  financing activities                  975,508            (301,034)
                                     -----------         -----------
 Net decrease in cash and equivalents    (7,736)            (11,542)
                                     -----------         -----------

CASH AND EQUIVALENTS, beginning
 of period                              233,844             266,940
                                     -----------         -----------

CASH AND EQUIVALENTS, end of
 period                             $   226,108         $   255,398
                                     ===========         ===========
Interest paid on a cash basis       $   360,850         $   328,864
                                     ===========         ===========
</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 nine months ended
September 30, 1999 and 1998.

1.   Changes to the Names of Properties Help 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  principals  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 that
     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 with such mortgage company, and 2) funds
     which  the   Partnership   has  reserved  for  the  repurchase  of  limited
     partnership Units.

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 nine months ending September 30, 1999
     the  Partnership has funded $0 to the reserve.  Through  September 30, 1998
     (the  commencement  date of the  Partnership's  First  Tender  Offer),  the
     Partnership  had repurchased a total of 1,830 Units for $393,240 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 of  liquidation  value of the
     Units.  Repurchased  Units are retired by the Partnership,  thus increasing
     the percentage of ownership of each remaining limited partnership investor.
     The Interest Repurchase Reserve was funded from cash reserves.  The balance
     in the reserve at September 30, 1999 was $0.

                                       6

<PAGE>

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

     On September 30, 1998, the  Partnership  and ORIG, LLC, an affiliate of the
     Partnership,  (the  "bidders")  commenced a tender offer (the "First 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  First
     Tender  Offer.  The initial  expiration  date of the First Tender 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 the
     bidders accepted all Units tendered. The Partnership  repurchased 500 Units
     and ORIG, LLC purchased 660 Units at a total cost of $290,000 plus offering
     expenses.

     On July 27,  1999,  the  Partnership  and ORIG,  LLC, an  affiliate  of the
     Partnership,  (the "bidders")  commenced a tender offer (the "Second 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 date of the  Second  Tender
     Offer.  Approximately  $270,000  ($250,000  to  purchase  1,000  Units plus
     approximately $20,000 for expenses associated with the Second Tender Offer)
     is required to purchase all 1,000 Units.  The Second Tender Offer  provided
     that the  Partnership  would 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 bidders 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  Second  Tender  Offer.  The  initial
     expiration  date of the Second Tender Offer was October 29, 1999,  and this
     expiration  date has been extended to December 8, 1999. As of September 30,
     1999,  approximately  520 Units had been  tendered  pursuant  to the Second
     Tender Offer.

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

     Mortgages payable consist of the following:

                                   September 30,       December 31,
                                       1999                1998
                                       ----                ----
   Mortgage   payable   to    an
   insurance   company   bearing
   interest at a fixed  rate  of
   6.89%,  maturing  April   10,    $  6,486,233        $  6,656,145
   2015,  secured  by  land  and
   buildings

   $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
   September 30, 1999 is 8.0%          1,288,527                --
                                     -----------         -----------
                                    $  7,774,760        $  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 is $7,430,000.

                                       7

<PAGE>

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 periods ended September 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  to the  September  30,  1999  classifications.  These
   reclassifications have no effect on previously reported operations.

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

  Property  management  fees of $116,688  and $149,504 for the nine months ended
  September  30,  1999 and 1998,  respectively,  and $39,446 and $50,140 for the
  three months ended September 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   $77,752  and  $61,009  as
  repair and maintenance fees during the nine  months  ended  September 30, 1999
  and 1998,  respectively,  and  $6,829  and  $9,927 for the three  months ended
  September 30, 1999  and  1998,  respectively,  and has capitalized these costs
  as a part  of  land,  building  and  amenities.  As permitted by an agreement,
  the Partnership was also  charged  the  following amounts from NTS Development
  Company for the three  months  and  nine months ended  September  30, 1999 and
  1998.  These charges  include items,  which  have  been  expensed as operating
  expenses  -  affiliated   or   professional   and  administrative  expenses  -
  affiliated,  and items  that  have  been  capitalized  as other assets,  land,
  buildings  and  amenities,  or construction in progress. These charges were as
  follows:

                      Three Months Ended      Nine Months Ended
                         September 30,          September 30,
                         -------------          -------------

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

Leasing             $106,750    $ 45,025     $205,478   $125,397
Administrative        30,940      40,068      100,787    125,497
Property Manager      62,620      51,809      186,076    166,097
Other                (55,033)     12,853        7,600     49,715
                     --------    -------      -------    -------

                    $145,277    $149,755     $499,941   $466,706
                     ========    =======      =======    =======

    During the nine months ended  September 30, 1999 and 1998,  NTS  Development
    Company  leased 20,368 square feet in NTS Center at a rental rate $14.50 per
    square foot. The Partnership received approximately $222,000 and $223,000 in
    rental  payments from NTS  Development  Company during the nine months ended
    September  30,  1999  and  1998,  respectively.   The  lease  term  for  NTS
    Development Company ends on March 31, 2002.

                                       8

<PAGE>

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
    the renovations,  which began during 1998, is  approximately  $1,450,000 and
    the  renovation is expected to be completed by the end of the fourth 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.

    In August 1999, a portion of the vacant space at Plainview Center, discussed
    above,  was leased to a new tenant.  The lease is for  approximately  28,000
    square  feet  and has a term of five  and  one-half  years.  The  tenant  is
    expected to take  occupancy of the space during the fourth  quarter of 1999.
    With this lease,  Plainview  Center's  occupancy  should improve to 51%. The
    Partnership  has a commitment  for  approximately  $500,000 of tenant finish
    improvements  resulting  from  this  lease.  The  source  of funds  for this
    commitment will be the $2,000,000 note payable discussed above.

12. 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  ("MD&A") 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.  A  discussion  of  certain  market  risks also
follows.  MD&A 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  this  Item 2 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 MD&A, or elsewhere in this report,
which reflect management's best judgment,  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>

Results of Operations
---------------------

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

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

     NTS Center                      100%           100%
     Plainview Center (2)             23%            91%
     Peachtree  Corporate  Center (3) 82%            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 in 1998. During August 1999, a 28,000 square foot lease was signed
     which will increase Plainview Center's occupancy to 51%.

  (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 average  occupancy levels at the  Partnership's  properties during the three
months and nine months ended September 30 were as follows:

                            Three Months Ended      Nine Months Ended
                              September 30,           September 30,
                              -------------           -------------

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

NTS Center                  100%         100%        100%        97%
Plainview Center (4)         23%          91%         27%        89%
Peachtree Corporate
Center (4)                   81%          84%         84%        85%


  (4)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  September  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.

The rental and other income  generated by the  Partnership's  properties for the
three months and nine months ended September 30, 1999 and 1998 were a follows:

                           Three Months Ended      Nine Months Ended
                             September 30,           September 30,
                             -------------           -------------
                            1999        1998        1999       1998
                            ----        ----        ----       ----
NTS Center                $ 354,242   $373,761   $1,127,573   $1,108,505

Plainview Center          $  81,955   $293,604   $  285,769   $  932,054

Peachtree Corporate
Center                    $ 294,142   $272,231   $  903,725   $  849,806
                           --------    -------    ---------    ---------
                          $ 730,339   $939,596   $2,317,067   $2,890,365

                                       11
<PAGE>

Results of Operations - Continued
---------------------------------

Rental and other income decreased  approximately $210,000 or 22% and $573,000 or
20% for the three  months and nine  months  ended  September  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. (See Note 11).

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 and nine months ended  September  30, 1999 or 1998. As of September
30, 1999 there were no on-going cases.

Operating expenses increased  approximately  $15,000 or 6% and $23,000 or 3% for
the three  months and nine months  ended  September  30, 1999 as compared to the
same  periods in 1998.  The increase is due  primarily to increased  repairs and
maintenance  expenses at Peachtree  Corporate  Center and  increased  irrigation
expenses at NTS Center.

Operating  expenses  -  affiliated  increased  approximately  $24,000 or 26% and
$58,000 or 19% for the three months and nine months ended September 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.  These  increases  are
partially offset by decreased  architectural  salaries at NTS Center.  Operating
expenses affiliated are expenses incurred for services performed by employees of
NTS Development Company, an affiliate of the General Partner.

The 1999 loss on  disposal  of assets  can be  attributed  to the  write-off  of
building costs at Plainview  Center and the write-off of tenant  improvements at
Peachtree  Corporate  Center.  The  1998  loss  on  disposal  of  assets  can be
attributed to the write-offs of tenant  improvements at NTS Center and Peachtree
Corporate Center. The write-offs are the result of various property  renovations
including  exterior  and common area  improvements  and tenant  improvements  to
accommodate new leases and to improve the  marketability  of vacant suites.  The
write-offs  represent the costs of  unamortized  assets which were replaced as a
result of the renovations.

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 expenses.  The decreases of $10,694 or 21% and $32,816 or 22% for
the three  months and nine months  ended  September  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 $27,000 or 188%
and $55,000 or 119% for the three  months and nine months  ended  September  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>

Results of Operations - Continued
---------------------------------

Professional and administrative  expenses - affiliated  decreased  approximately
$8,500 or 26% and  $25,500  or 25% for the three  months and nine  months  ended
September  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.

The 1998 write-off of unamortized loan costs (recorded as an extraordinary item)
relates to the loan costs associated with two mortgages of the Partnership.  The
unamortized  loan costs were  expensed due to the fact that the  mortgages  were
repaid April 1, 1998 prior to their maturity  (November 1998 and June 2001) as a
result of a new mortgage loan.

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

Cash flows provided by (used in):

                                         1999           1998
                                         ----           ----

         Operating activities      $   517,106     $ 1,180,456

         Investing activities       (1,500,350)       (890,964)

         Financing activities          975,508        (301,034)
                                    -----------     -----------
         Net decrease in cash and
          equivalents              $    (7,736)    $   (11,542)
                                    ===========     ===========

Net cash provided by operating  activities decreased  approximately  $663,000 or
56% for the nine months ended September 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 net negative changes in various working capital accounts.

Net cash used in investing  activities  increased by approximately  $609,000 for
the nine months  ended  September  30,  1999,  as compared to the same period in
1998. The increase was primarily due to funds used in the interior renovation of
Plainview  Center  and  also to cash  provided  by the  maturity  of  investment
securities and restricted cash activity that was present in 1998, but not 1999.

Net cash provided by (used in) financing  activities was $975,508 and $(301,034)
for the nine  months  ended  September  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  September  30,  1999 were
$226,108.

                                       13

<PAGE>

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

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

Demand on future  liquidity  is also  expected  to  increase  as a result of the
interior  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  $1,450,000. 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  September 30,
1999, the  Partnership had incurred  approximately  $1,259,000 of the $1,450,000
estimated  Plainview  Center  renovation  costs.  As of September 30, 1999,  the
Partnership  had a  commitment  for  approximately  $500,000  of  tenant  finish
improvements  relating to a new 28,000 square foot lease.  The  improvements are
expected  to be  complete  during the  fourth  quarter of 1999 and the source of
funds for this commitment will be the $2,000,000 loan and cash reserves.

Due to the fact that no  distributions  were made during the nine  months  ended
September  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 funded $75,000, $0, and $243,700,  respectively, to the reserve. For
the nine months ending  September 30, 1999, the Partnership has funded $0 to the
reserve.  Through September 30, 1998 (the commencement date of the Partnership's
First Tender Offer),  the Partnership has repurchased a total of 1,830 Units for
$393,240 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 September
30, 1999 was $0.

On  September  30,  1998,  the  Partnership  and ORIG,  LLC, an affiliate of the
Partnership, (the "bidders") commenced a tender offer (the "First 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 date of the First  Tender  Offer.
The initial expiration date of the First Tender 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 the bidders accepted all Units. The Partnership
repurchased  500 Units  and ORIG,  LLC  purchased  660 Units at a total  cost of
$290,000 plus offering expenses.

On  July  27,  1999,  the  Partnership  and  ORIG,  LLC,  an  affiliate  of  the
Partnership,  (the "bidders")  commenced a Second Tender Offer to purchase up to
1,000  of the  Partnership's  limited  partnership  Units at a price of $250 per
Unit. Although the bidders 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 date of the
Second Tender Offer.  Approximately  $270,000  ($250,000 to purchase 1,000 Units
plus approximately $20,000 for expenses associated with the Second Tender Offer)
is required to purchase all 1,000 Units.  The Second Tender Offer  provided that
the  Partnership  would  purchase  the  first 500  Units  tendered  and fund its
purchases and its portion of the expenses

                                       14
<PAGE>

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

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
bidders 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  Second  Tender  Offer.  The  initial
expiration  date of the Second  Tender  Offer was  October  29,  1999,  and this
expiration date has been extended to December 8, 1999. As of September 30, 1999,
approximately 520 Units had been tendered pursuant to the Second Tender Offer.

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.  NTS Development  Company's  marketing
staff located in Louisville,  Kentucky also  coordinates all advertising for the
Louisville properties.

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  Corporation,  including  NTS-Properties  Associates,  the
General  Partner of the  Partnership,  are  reviewing  the effort  necessary  to
prepare  NTS'  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 fourth quarter of 1999.

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 the new
network.  It will be retained as long as necessary to 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.

                                       15

<PAGE>

Year 2000 - Continued
---------------------

The costs of these advances in NTS' systems  technology are 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 Partnership's share of the
costs involved will be approximately $45,000 during 1999. Costs incurred through
December 31, 1998 were  approximately  $10,000.  These costs  include  primarily
purchase, lease and maintenance of 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 fourth 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 its 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
NTS 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 2, 1999. At September 30, 1999, a hypothetical 100
basis point  increase  in interest  rates  would  increase  interest  expense by
approximately $13,000, and would result in an approximately $800,000 decrease in
the fair value of the debt.

                                       16

<PAGE>

PART II.  OTHER INFORMATION

Item 3.   Defaults Upon Senior Securities
          -------------------------------

          None.

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

          Mr. Richard L. Good, who was the Vice Chairman and former President of
          NTS Capital Corporation and NTS Development Company, retired effective
          September 3, 1999.

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

          (a)  Exhibits

               Exhibit 27. Financial Data Schedule

          (b)  Reports of 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
                                   Senior Vice President of
                                   NTS Capital Corporation


Date: November 12, 1999


                                       18

<PAGE>