<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.

[ ]      TRANSITION REPORT UNDER SECTION  13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

              COMMISSION FILE NUMBER: 0-18454 (FORMERLY 33-26759)

     ---------------------------------------------------------------------

                        SOUTHEAST ACQUISITIONS III, L.P.

     ----------------------------------------------------------------------

                        (Name of issuer in its charter)


<TABLE>
<S>                           <C>
      Delaware                                  23-2532708
(State of Incorporation)      (IRS Employer Identification Organization Number)
</TABLE>


                          3011 Armory Drive, Suite 310
                           Nashville, Tennessee 37204
-------------------------------------------------------------------------------
                    (Address of principal executive offices)


          Issuer's telephone no., including area code: (615) 833-8716
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                             Securities registered
                     pursuant to Section 12(b) of the Act.

                          Name of each exchange: None
            Title of each Class on which registered: Not Applicable

                             Securities registered
                     pursuant to Section 12(g) of the Act:
                   Limited Partnership Units $1,000 Per Unit

-------------------------------------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past ninety (90) days.
Yes [X]  No [ ]

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained in this form, and no disclosure will be contained, to the best
of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. Yes [X]  No [ ]


<PAGE>   2


                               TABLE OF CONTENTS


<TABLE>
<S>               <C>                                                                                   <C>
PART I

ITEM 1.           BUSINESS...............................................................................1

                  Background.............................................................................1
                  Material Recent Developments 2
                  Employees..............................................................................2
                  Competition............................................................................2
                  Trademarks and Patents.................................................................2

ITEM 2.           PROPERTIES.............................................................................2

ITEM 3.           LEGAL PROCEEDINGS......................................................................3

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................3

PART II

ITEM 5.           MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
                  INTEREST AND RELATED SECURITY HOLDER MATTERS...........................................4

ITEM 6.           SELECTED FINANCIAL DATA................................................................4
                  SELECTED QUARTERLY FINANCIAL DATA......................................................5

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS..............................................................6
                  Background.............................................................................6
                  Results of Operations..................................................................6
                  2000 Compared to 1999..................................................................6
                  1999 Compared to 1998..................................................................7
                  Liquidity and Capital Resources........................................................7
                  Year 2000 Compliance...................................................................7

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............................................7

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE....................................................7

PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP....................................7

ITEM 11.          EXECUTIVE COMPENSATION.................................................................9

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.............................................................................9
                  Security Ownership of Management.......................................................9
                  Changes in Control.....................................................................9

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................9

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                  REPORTS ON FORM 8-K...................................................................10
                  (a)      Index to Financial Statements................................................10
                  (b)      Reports on Form 8-K..........................................................10
                  (c)      Exhibits (numbered in accordance with Item 601 of Regulation
                           S-K).........................................................................10

SIGNATURES
</TABLE>


                                      -i-
<PAGE>   3


                                     PART I

ITEM 1.           BUSINESS

                  Background

                  Southeast Acquisitions III, L.P. (the "Partnership") was
formed on November 4, 1988, as a Delaware limited partnership. The
Partnership's public offering of 12,400 units of limited partnership interest
("Units") commenced on May 2, 1989 and terminated on August 29, 1989 when all
12,400 Units were sold. The Partnership is scheduled to terminate on December
31, 2001.

                  The Partnership purchased the following five parcels of
unimproved land in 1989: 208 acres in Fulton County, Georgia; 265 acres in
Henry County, Georgia; 24 Acres in Nashville, Tennessee; 47 acres in Fort
Myers, Florida; and 51 acres in Columbia, South Carolina. The Partnership's
primary business objective is to realize appreciation in the value of the five
parcels of unimproved land (each a "Property"), collectively the "Properties"),
by holding the Properties for investment and eventual sale, although there is
no assurance that this will be attained.

                  Since acquisition, the Partnership has sold various parcels
of the Property. At December 31, 2000, the Partnership's Property consisted of
approximately 208 acres in Fulton County, Georgia and approximately 35 acres in
Columbia, South Carolina.

                  During 1999, there was one sale of 100.01 acres of Fulton
County, Georgia Property at $17,608 per acre. This transaction closed in escrow
and by year-end 2000 has still not been funded. This sale will not be reflected
on the Income Statement until the closing is funded. However, interest income
of $191,449 from the buyer is reflected in the 2000 Statement of Income.
Non-refundable extension fees of $50,000 and related interest payments from the
buyer of $11,188 had been reflected in the 1999 Statement of Income. However,
during 2000, the Partnership agreed to apply $50,000 of the 1999 non-refundable
extension fee of $50,000 to the sales price at closing. The 2000 Balance Sheet
includes a deposit in escrow of $412,164 related to this pending sale.

                  During 1998, sales of the Henry County Property consisted of
66 acres at a price of $8,550 per acre, less commissions and expenses, and 13
acres at a price of $12,000 per acre, less commissions and expenses. The
remaining 154 acres of the Henry County Property were sold during 1999 for a
price of $15,243 per acre, less commissions and expenses.

                  The 24 acre Nashville, Tennessee Property was sold in 1995.

                  During 2000, the remaining 47 acres of the Fort Myers,
Florida Property were sold at a sales price of $1,300,000, less commissions and
expenses.

                  During 2000, there were two sales of the Columbia, South
Carolina Property consisting of 7.29 acres and .29 acres, each at a price of
$38,000 per acre, less commissions and expenses. The remaining Property is
currently being marketed through a Columbia, South Carolina real estate broker.

                  The timing and manner of sale will be determined by Southern
Management Group, LLC, the General Partner of the Partnership. The General
Partner generally has the right to sell Property, or portions thereof, without
the consent of the Limited Partners. The Partnership Agreement provides,
however, that a majority in interest of the Limited Partners must consent to
the sale or disposition at one time of 60% or more of the real estate acreage
held by the Partnership as of September 22, 1997 unless the sale or disposition
is being made in connection with the liquidation of the Partnership pursuant to
the Partnership Agreement or in the event that the net proceeds of the sale,
when distributed in accordance with the Partnership Agreement, will be
sufficient to provide the Limited Partners with distributions equal to the
acquisition cost of the assets sold.

                  The General Partner believes that the Partnership's cash
reserves will be sufficient to last for at least one more year assuming no
significant increases in expenses. However, if the reserves are exhausted and
the Partnership is unable to borrow funds, the Partnership may have to sell the
Property on unfavorable terms.

                  The General Partner has no plans to develop the Properties,
except for activities necessary to prepare the Properties for sale. There can
be no assurance that necessary funds would be available should it be desirable
for the Partnership to improve the Properties to facilitate their sale.


                                       1
<PAGE>   4


                  At a special meeting of Limited Partners held on November 5,
1997, the Partnership Agreement was amended to (i) extend the term of the
Partnership from its original expiration date of December 31, 1999 to December
31, 2001; (ii) substitute Southern Management Group, LLC for Southeast
Acquisitions, Inc. as the General Partner of the Partnership; (iii) authorize
new commissions and new management fees for the new General Partner; (iv) give
the new General Partner the exclusive right to sell Partnership property; and
(v) modify the Partnership Agreement to require that a majority in interest of
the Limited Partners must consent to the sale or disposition at one time of 60%
or more of the real estate acreage held by the Partnership as of September 22,
1997 unless the sale or disposition is being made in connection with the
liquidation of the Partnership pursuant to the Partnership Agreement or the net
proceeds of the sale, when distributed in accordance with the Partnership
Agreement, will be sufficient to provide the Limited Partners with
distributions equal to the acquisition cost of the assets sold.

                  Material Recent Developments

                  The aforementioned closing on the Fulton County, Georgia
Property closed in escrow in 1999 and has not yet been funded. However, the
Partnership has received an additional $48,330 of interest from the buyer in
the first quarter of 2001. The contract has been amended to extend the closing
period to March 31, 2001. Until the transaction is funded the outstanding
amount will accrue interest at a rate of 10%. All of the Fort Myers Property
was sold during 2000 for a total sales price of $1,300,000. The Partnership had
previously entered into a contract with the City of Columbia and other parties
to jointly fund the design and construction of a water main extension to serve
the Columbia Property. This work was completed during 2000 at a cost to the
Partnership of $100,000. All of the remaining Columbia, South Carolina Property
is under contract and is scheduled to close by April 7, 2001. The purchase
price is $1,008,000, less commissions and closing costs. There can be no
assurance that this contract will close.

                  Employees

                  The Partnership presently has no employees. The General
Partner manages and controls the affairs of the Partnership. (See Part III,
Item 10, Directors and Executive Officers of the Partnership).

                  Competition

                  The General Partner believes that there is significant direct
competition within a five-mile radius of the Properties. The Properties are
located in three distinct areas of the Southeastern United States.

                  Trademarks and Patents

                  The Partnership has no trademarks or patents.

ITEM 2.           PROPERTIES

                  The Partnership owns two tracts of undeveloped land
consisting of approximately 208 acres in Fulton County, Georgia and
approximately 35 acres in Columbia, South Carolina.

                  Fulton County, Georgia Property

                  The Fulton County, Georgia Property consists of 208 acres of
multi-zoned undeveloped land located in the southern portion of Fulton County
approximately 16 miles southwest of the central business district,
approximately 10 miles west of the Hartsfield-Atlanta International Airport.
The Property is located at the northeast and southeast quadrants of the
intersection of State route 92 (Campbelltown-Fairburn Road) and the South
Fulton Parkway. The Property has approximately 6,000 feet of frontage along
State Route 92 on its east side, 1,955 feet of frontage on Red Mill Road and
3,345 feet of frontage on Thompson Road. Both Red Mill and Thompson Roads are
paved and intersect with State Route 92 south and north, respectively, of the
South Fulton Parkway. The portion of the South Fulton Parkway which intersects
the Property provides the site with direct access to both I-85 and I-285, major
north-south arteries. The Property is currently the only non-residentially
zoned land in the immediate surrounding area. Approximately 108 acres are
located in the northeast quadrant of the State Route 92 and South Fulton
Parkway intersection, of which 22 acres are zoned C-1 Commercial, 52 are zoned
M-1A Industrial Park, and 34 acres are zoned Multi-Family Apartment.
Approximately 100 acres are located at the southeast quadrant of State Route 92
and South Fulton Parkway intersection of which 37 acres are zoned C-1
Commercial, 46 are zoned M-1A Industrial Park and 17 acres are zoned 0-1 Office
Institutional. This 100 acre portion closed in escrow (see Material Recent
Developments above).


                                       2
<PAGE>   5


                  All utilities are available to the Property except sewer
facilities. The Partnership has no other plans for development of this
Property. The General Partner has the sole discretion to decide whether the
Partnership should develop the Property to facilitate sales.

                  The former general partner had the Fulton County Property
appraised in 1996 by Urban Realty Advisors, Inc. The 1996 appraiser has no
relationship with the former general partner or the current General Partner.
The Property was appraised in 1996 for $1,350,000 or approximately $6,490 per
acre. The appraiser used the sales comparison (market) approach to value the
Property. The appraiser concluded that the Property's only immediate use was
residential due to the low traffic counts and low population density in the
area. The appraiser also determined that the Property was not imminently ready
for development and therefore did not conduct a development analysis for
comparison to the market approach.

                  The appraised value does not reflect costs, expenses and
commissions, which would be incurred in connection with a sale of the property.
Moreover, appraisals are only an approximation of current market value which
can only be established by an actual sale.

                  Fort Myers, Florida Property

                  All of the Fort Myers, Florida Property has been sold. The
Property consisted of approximately 47 acres and was sold at a sales price of
$1,300,000, less commissions and expenses.

                  Columbia, South Carolina Property

                  The Columbia, South Carolina Property is located on the
southwest side of US Highway 176, also known as Broad River Road in Richland
County, northwest of downtown Columbia, South Carolina. The Property consists
of approximately 35 acres of undeveloped land, generally rectangular in shape,
and heavily wooded with a sloping topography. The Property has an abundance of
paved frontage including frontage on US Highway 176, County Road 286, County
Road 385, and on a new county road.

                  During 2000, the Partnership sold approximately 8 acres at a
sales price of $38,000 per acre, less commissions and expenses.

                  During the first quarter of 2000, the Partnership entered
into a contract with an independent contractor to extend a water line into the
Property. The Partnership's share of this water line was $100,000 and the work
was completed in the third quarter of 2000. All other utilities including a
sewer line on the Property are presently available to the Property for
commercial use.

                  The former general partner had the Columbia Property
appraised in 1996 by Owen Faulkner & Associates. The appraiser has no
affiliation with the former general partner or the current General Partner. The
Property, which consisted of approximately 50 acres at the time, was appraised
for $740,000 or approximately $14,800 per acre. The appraisal used the sales
comparison (market) approach to value.

                  The appraised value does not reflect costs, expenses and
commissions, which would be incurred in connection with a sale of the property.
Moreover, appraisals are only an approximation of current market value which
can only be established by an actual sale.

ITEM 3.           LEGAL PROCEEDINGS

                  The Partnership is not directly a party to, nor is the
Partnership's Property directly the subject of, any material legal proceedings.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  There were no matters submitted to a vote of security holders
in 2000.


                                       3
<PAGE>   6


                                    PART II

ITEM 5.           MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
                  INTEREST AND RELATED SECURITY HOLDER MATTERS

                  There is no established public trading market for the Units
and it is not anticipated that any will develop in the future. The Partnership
commenced an offering to the public on May 2, 1989 of 12,400 Units of limited
partnership interests. The offering of $12,400,000 was fully subscribed and
terminated on August 29, 1989. As of December 31, 2000, there were 704 limited
partners in the Partnership.

ITEM 6.           SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
                              For the Year        For the Year         For the Year         For the Year          For the Year
                                Ended                Ended                Ended                Ended                 Ended
                              December 31,        December 31,         December 31,         December 31,          December 31,
                                  2000               1999                  1998                 1997                 1996
                              ------------        -----------          ------------         ------------          ------------

<S>                           <C>                 <C>                  <C>                  <C>                   <C>
Operating
Revenues                       $  393,435          $1,343,860            $  333,395          $   114,666           $   131,091
                               ----------          ----------            ----------          -----------           -----------

Net Income (Loss)              $  289,363          $1,113,511**          $  240,988          $    (5,089)          $(4,306,098)*
                               ----------          ----------            ----------          -----------           -----------
Net Income (Loss) per
Unit of Limited
Partnership
Interest                       $    23.34          $    89.80            $    19.43          $      (.41)          $   (347.27)
                               ----------          ----------            ----------          -----------           -----------

Total Assets                   $2,526,397          $3,597,804            $4,490,341          $ 4,895,246           $ 4,876,351
                               ----------          ----------            ----------          -----------           -----------

Long Term
Obligations                          None                None                  None                 None                  None
                               ----------          ----------            ----------          -----------           -----------

Cash
Distributions
Declared per
Unit of Limited
Partnership
Interest                       $      140          $      165            $       50                 None                  None
                               ----------          ----------            ----------          -----------           -----------
</TABLE>

 *Includes a provision for loss on land of $4,348,886.
**Includes a provision for loss on land of $141,147.


                                       4
<PAGE>   7


                  SELECTED QUARTERLY FINANCIAL DATA


<TABLE>
<CAPTION>
                              For  the          For the           For  the          For the
                           Quarter Ended     Quarter Ended     Quarter Ended     Quarter Ended
                             December 31,     September 30,        June 30,          March 31,
                               2000              2000              2000              2000
                           -------------     -------------     ------------      -------------

<S>                        <C>               <C>               <C>               <C>
Operating Revenue           $(36,242)***       $ 27,980          $53,568           $348,129
                            ---------          --------          -------           --------

Gross Profit*                    N/A                N/A              N/A                N/A
                            ---------          --------          -------           --------

Net Income (Loss)
before Extra-
ordinary Items and
Cumulative Effect
of a Change in
Accounting                  $(55,279)          $ (2,000)         $30,574           $316,068
                            --------           --------          -------           --------

Net Income (Loss)****
per Unit of Limited
Partnership
Interest                    $  (4.46)          $ (0.16)          $  2.47           $  25.49
                            --------           -------           -------           --------

Net Income
(Loss)                      $(55,279)           $(2.000)         $30,574           $316,068
                            --------            -------          -------           --------


<CAPTION>
                              For the           For the          For the          For the
                           Quarter Ended     Quarter Ended    Quarter Ended    Quarter Ended
                            December 31,     September 30,       June 30,        March 31,
                               1999               1999             1999            1999
                           -------------     -------------    -------------    -------------

<S>                        <C>               <C>               <C>               <C>
Operating Revenue           $ 64,699          $  3,475          $ 11,655         $1,264,031
                            --------          --------          --------         ----------

Gross Profit*                    N/A               N/A               N/A                N/A
                            --------          --------          --------         ----------

Net Income (Loss)
before Extra-
ordinary Items and
Cumulative Effect
of a Change in
Accounting                  $(97,607)**       $(18,610)         $(14,234)       $1,243, 962
                            --------          --------          --------        -----------

Net Income (Loss)****
per Unit of Limited
Partnership
Interest                    $  (7.87)         $  (1.50)         $  (1.15)        $   100.32
                            --------          --------          --------         ----------

Net Income
(Loss)                      $(97,607)         $(18,610)         $(14,234)        $1,243,962
                            --------          --------          --------         ----------
</TABLE>

   *In the real estate industry, costs of sales are netted in the gain on sale
    of land and are included in operating revenues; therefore, there is no
    breakdown for gross profit.

  **Includes a provision for loss on land of $141,147.

 ***Negative revenues resulted from the General Partner's fourth quarter
    decision to apply $50,000 of extension fees to the sales price of a pending
    land sale at closing. The previous agreement between the Partnership and
    the potential purchaser was that the $50,000 was a non-refundable extension
    fee and would not apply to the purchase price.

****Net income (loss) per unit of limited partnership interest for the first
    three quarters of 1999 and 2000 have been restated to conform to the year-
    end presentation.


                                       5
<PAGE>   8




ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

                  Background

                  The Partnership was formed to acquire and realize
appreciation in the Property by holding it for investment and eventual sale.
However, there can be no assurance that the Partnership's objectives will be
realized.

                  The Partnership originally purchased 595 acres of unimproved
land at five locations. The status of these Properties at December 31, 2000 is
as follows:


<TABLE>
<CAPTION>

                                                             Property Sold Prior to         Remaining Property
        Place                    Property Purchased             December 31, 2000             Held for Sale
        -----                    ------------------          ----------------------         ------------------
<S>                              <C>                         <C>                            <C>
Fulton County, Georgia               208 acres                       0 acres                     208 acres
                                     ---------                     ---------                     ---------

Henry County, Georgia                265 acres                     265 acres                       0 acres
                                     ---------                     ---------                     ---------

Fort Myers, Florida                   47 acres                      47 acres                       0 acres
                                     ---------                      --------                     ---------

Columbia, South Carolina              51 acres                      16 acres                      35 acres
                                     ---------                      --------                     ---------

Nashville, Tennessee                  24 acres                      24 acres                       0 acres
                                     ---------                      --------                     ---------
</TABLE>

                  Results of Operations

                  The Partnership had no operations from the date of its
formation on November 4, 1988 until June 1, 1989 when it acquired the initial
Property and sold 6,215 Units of Limited Partnership interest. During 1989 the
Partnership acquired four additional Properties and sold 6,185 additional Units
of Limited Partnership interests.

                  2000 Compared to 1999

                  During 2000, the Partnership had two sales of the Columbia,
South Carolina Property, sold all of the Fort Myers, Florida Property and
recognized interest income on a pending sale on the South Fulton County
Property. The gain recognized from these transactions totaled $377,229 as
compared to gains from Property sales, extension fees and related interest
income of $1,321,313 in 1999. Other revenue in 2000 consisted of $16,206 in
interest income compared to $22,547 in 1999.

                  Expenses for 2000 were $104,072, consisting of general and
administrative expenses of $38,217, management fees of $26,500, real estate
taxes of $39,182 and insurance of $173. The general and administrative expenses
included legal and accounting fees of $30,149, which represents an increase of
$7,972 compared to 1999. This increase was primarily due to additional legal
assistance needed for the Fort Myers, Florida Property sale. The general and
administrative expenses also includes professional fees of $1,987, which
represents a decrease from 1999 of $5,258. The 1999 fees included $1,100 for an
appraisal on the Fort Myers, Florida Property and $3,498 for engineering fees
in relation to a sale of the Columbia, South Carolina Property. There were no
such fees in 2000. The Partnership also had to pay $2,000 for debris removal on
the South Fulton County Property. The $19,972 increase in real estate taxes is
primarily due to greenbelt rollback taxes of $12,727 which resulted from the
Columbia, South Carolina sales.


                                       6
<PAGE>   9


                  1999 Compared to 1998

                  During 1999 the Partnership had one sale of the Henry County,
Georgia Property for a gain of $1,260,125 as compared to 1998 when gains from
Property sales were $310,015. Other revenue during 1999 consisted of $61,188 in
non-refundable extension fee income and related interest income and $22,547 in
interest income.

                  Expenses for 1999 were $230,349, consisting of general and
administrative expenses of $34,349, management fees of $26,500, real estate
taxes of $19,210, engineering fees of $7,775, insurance of $1,038, Delaware
franchise and excise taxes of $330 and a provision for loss on land of
$141,147. The $9,398 decrease in real estate taxes between 1999 and 1998 was
primarily due to the sale of land. The engineering fees were paid as a
settlement against a lien on the Fulton County, Georgia Property. A lien had
been placed on the property in 1994 by engineers that had been hired to conduct
tests on the property adjoining the Partnership Property. It is unclear as to
whether Southeast Acquisitions III, LP was a party to the aforementioned
contract, however, the prior General Partner did not appear in court to contest
the claim filed by the engineers. The creditors agreed to release the lien on
the Partnership land for $7,775. The provision for loss on land of $141,147 is
related to the Fort Myers, Florida Property. The current General Partner had
the land appraised by Stephens & Associates. The property was appraised at
$1,201,050, or approximately $25,500 per acre. The land was written down to
appraised value, less estimated cost to sale.

                  Inflation did not have a material impact on operations during
2000. 1999 and 1998.

                  Liquidity And Capital Resources

                  Cash generated by operating activities varies from year to
year based on the level of land sale activity. The Partnership had cash
reserves of $534,903 at December 31, 2000. The General Partner believes that
the Partnership has sufficient cash reserves to cover normal partnership
expenses for an additional year. However, if additional expenses are incurred
or if the Partnership goes forward with the construction to bring sewer to the
Fulton County Property, the reserves may be inadequate to cover the
Partnership's operating expenses. If the reserves are exhausted, the
Partnership may have to dispose of some of the Property or incur indebtedness
on unfavorable terms.

                  Year 2000 Compliance

                  The Partnership's operations are not dependent in any
meaningful way on computer hardware or software. The "Year 2000 Issue"
generally refers to the inability of computer software or hardware to recognize
years in more than two digits. As a result, the year 2000 would appear as "00"
and may be viewed by the computer as the year 1900. There was no effect on the
Partnership's accounting systems or the Limited Partner registration records
from the "Year 2000 Issue."

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  The Partnership's financial statements for the years ended
December 31, 2000, 1999 and 1998, together with the report of the Partnership's
independent auditors, Williams Benator & Libby, LLP, are included in this Form
10-K

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

                  Not Applicable.


                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

                  The Partnership does not have any directors or officers. The
General Partner manages and controls the affairs of the Partnership and has
responsibility for all aspects of the Partnership's operations. The current
members and executive officers and directors of the General Partner are
identified and described below.

                  The General Partner is a Tennessee limited liability company
whose members are Richard W. Sorenson, who owns a 50% interest in the General
Partner and has a 51% voting right, and Southeast Venture LLC, a Tennessee
limited liability company which owns 50% and has a 49% voting right.


                                       7
<PAGE>   10


                  Mr. Sorenson, age 75, has over 39 years experience in several
real estate disciplines, including land acquisition and development,
development of office buildings, shopping centers, warehouses and medical
facilities. All of these activities occurred in the southeastern United States.

                  Mr. Sorenson was President of Phoenix Investment Company
("Phoenix"), a publicly owned, Atlanta based real estate development and
investment firm from 1965 to 1970. Concurrent with his employment at Phoenix,
he was President of First Atlanta Realty Fund, a publicly owned real estate
investment trust. During his tenure with the trust, he served as a Trustee of
the National Association of Real Estate Investment Trusts.

                  Following his departure from Phoenix in 1970, Mr. Sorenson
became Vice President of Cousins Properties in Atlanta, where he was
responsible for development of office buildings, shopping centers and
apartments until 1971. Until forming Southeast Venture Companies ("SV") in
1979, Mr. Sorenson was an independent real estate developer.

                  Mr. Sorenson was co-founder of SV in 1979. In 1992,
substantially all of the assets of SV were sold to Southeast Venture
Corporation.

                  Mr. Sorenson is a graduate of the Northwestern University
Business School with a major in real estate.

                  The other member of the General Partner is Southeast Venture
LLC ("SVLLC"). The officers and key employees of SVLLC include the following:

                  Paul J. Plummer, age 51. Mr. Plummer is a registered architect
and serves as director of architecture services for SVLLC. Mr. Plummer is
responsible for facility programming, planning, master planning, facility
assessment and design. Before joining SV in 1986, Mr. Plummer served as a
partner and director of design for the Nashville-based architecture and
engineering firm of Gresham, Smith and Partners. In that capacity he was
responsible for the design and planning of over 15 major projects throughout the
United States and Saudi Arabia. Mr. Plummer earned his bachelor of architecture
degree from the University of Kentucky and is a member of the American Institute
of Architects.

                  Wood S. Caldwell, age 47. Mr. Caldwell is responsible for all
site development activities on behalf of commercial and health care clients of
SVLLC, including managing all design consultants, permitting, scheduling,
budgeting and construction management. He contributes to SVLLC's development
team in the areas of land planning, zoning, permitting, engineering and
construction. Before joining SV in 1985, Mr. Caldwell served as a professional
engineer for Gresham, Smith and Partners. As the prime site design engineer for
Gresham, Smith and Partners, Mr. Caldwell produced and coordinated site
development plans for over 50 separate medical facilities in over 40 different
communities throughout the southeast. Mr. Caldwell earned his bachelor of
engineering degree from the Vanderbilt University School of Engineering.

                  Axson E. West, age 46. Mr. West serves as vice president of
brokerage services for SVLLC, specializing in office and industrial leasing,
improved property sales and land disposition for several commercial and
residential projects. Mr. West has sold real estate and real estate securities
since 1980 and, since joining SV in 1988, he has been responsible for the
disposition of land encompassing industrial, office and retail developments.
Mr. West is past director of the Nashville Board of Realtors and past president
of the board's commercial investment division. He received his bachelor of arts
degree from Vanderbilt University and is a Certified Commercial Investment
Member, a designation of the Commercial Investment Real Estate Institute.

                  Cameron W. Sorenson, age 39. Mr. Sorenson serves as director
of vertical development for SVLLC. He is primarily responsible for providing
development and project management for the clients of SVLLC. Prior to assuming
these responsibilities, Mr. Sorenson was project director for two large scale
land development ventures for SVLLC. Prior to joining SV in 1987, Mr. Sorenson
was with Trust Company Bank in Atlanta, as an officer in the National Division,
managing a credit portfolio in excess of $150 million. He received his bachelor
of science degree in finance from the MacIntyre School of Business at the
University of Virginia. Cameron Sorenson is the son of Richard W. Sorenson, the
individual majority member of the General Partner.

                  Randall W. Parham, age 45. Mr. Parham is the President of
SVLLC. He is primarily responsible for property management, park and association
management and also specializes in real estate development and brokerage. Mr.
Parham is a licensed real estate broker and architect. Prior to joining SVLLC in
1998, Mr. Parham was a project manager with Gresham, Smith and Partners from
1978 to 1983 and was responsible for overall project management of project team


                                       8
<PAGE>   11


and project financial management. Following his departure from Gresham, Smith
and Partners, Mr. Parham joined MetroCenter Properties, Inc., an 850 acre
mixed-use development in Nashville, Tennessee. He was Vice President and was
responsible for initiation and development of new projects, land sales and lease
negotiations. In 1991 he purchased the assets of MetroCenter Properties and
formed MetroCenter Management, Inc. where he served as President through 1997.

ITEM 11.          EXECUTIVE COMPENSATION

                  During the fiscal year ended December 31, 2000, the
Partnership did not pay compensation to any officers of the General Partner.
The Partnership paid the General Partner a management fee of $26,500 in the
fiscal years ended December 31, 2000, 1999 and 1998, respectively. See Item 13
of this report, "Certain Relationships and Related Transactions."

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                  As of December 31, 2000, no person or "group" (as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934) was known
by the Partnership to beneficially own more than five percent of the Units of
the Partnership.

                  Security Ownership of Management

                  No individual member, or director or officer of a member, of
the General Partner nor such directors or officers as a group, owns any of the
Partnership's outstanding securities. The General Partner owns a general
partnership interest which entitles it to receive 30% of cash distributions
after the Limited Partners have received a return of their capital
contributions plus cumulative distributions equal to a 10% non-compounded
Cumulative Annual Return of their Adjusted Capital Contributions as those terms
are defined in the Partnership Agreement. The General Partner will share in
taxable income to reflect cash distributions or, to the extent there are
losses, 1% of such losses.

                  Changes in Control

                  There are no arrangements known to the Partnership that would
at any subsequent date result in a change in control of the Partnership.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  From 1988 to November 5, 1997, the Partnership paid $24,886
annually as an administration fee to the former general partner. This fee was
computed as one quarter of one percent of the base cost of the land. The
cumulative amount of such fee could not exceed $207,244,which limit was reached
and paid during 1997 as provided in the Partnership Agreement. As of November
5, 1997, the Limited Partners voted and agreed to pay the new General Partner,
Southern Management Group, LLC, a fee of $4,066 for the period November 5, 1997
through December 31, 1997 and annual fees of $26,500 from January 1, 1998
through December 31, 2001. Any fee payments will cease at a date when the
Partnership is liquidated.

                  The General Partner will also receive 30% of cash
distributions after the Limited Partners have received (i) a return of their
Capital Contributions plus (ii) cumulative distributions equal to a 10%
Cumulative Annual Return on their Adjusted Capital Contributions (as those
terms are defined in the Partnership Agreement). During 2000, 1999, and 1998
the General Partner received no cash distributions.

                  At the special meeting of Limited Partners held on November
5, 1997, the Partnership Agreement was amended to provide that total
compensation paid to all persons, including the General Partner, for the sale
of the Partnership's Property is limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract price of the
property, provided that the General Partner or its affiliates would only be
entitled to up to 50% of any such compensation. Any such real estate commission
or disposition fee that is paid to the General Partner will reduce any
distributions to which it would otherwise be entitled under the amended
Partnership Agreement. In addition, the Partnership Agreement was amended to
provide that the General Partner may act as the exclusive agent for the sale of
the Property. During 2000, 1999 and 1998, the Partnership paid real estate
commissions of $72,477, $57,069 and $8,059, respectively, to the General
Partner.


                                       9
<PAGE>   12


                                     PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
                  FORM 8-K


<TABLE>
<CAPTION>
                  (a)      Index to Financial Statements                                                 Page

                  <S>      <C>                                                                            <C>
                           Report of Independent Auditors                                                 F-2
                           Balance Sheets                                                                 F-3
                           Statements of Income                                                           F-4
                           Statements of Partners' Equity (Deficit)                                       F-5
                           Statements of Cash Flows                                                       F-6
                           Notes to Financial Statements                                                  F-7

                           Schedules have been omitted because they are inappropriate,
                           not required, or the information is included elsewhere in the
                           financial statements or notes thereto.

                  (b)      Reports on Form 8-K

                           No reports on Form 8-K were filed by the Partnership
                           during the fourth quarter of 2000.

                  (c)      Exhibits (numbered in accordance with Item 601 of
                           Regulation S-K)
</TABLE>


<TABLE>
<CAPTION>
Exhibit Numbers                               Description                                 Page Numbers
---------------                               -----------                                 ------------

<S>               <C>                                                                     <C>
3.1(a)            Certificate of Limited Partnership                                             *
                  ----------------------------------                                      ----------

3.1(b) & (4)      Restated Limited Partnership Agreement                                         **
                  --------------------------------------                                  ----------

3.1(c)            First Amendment to Restated Limited Partnership Agreement                      E-1
                  ---------------------------------------------------------               ----------

11                Not Applicable
                  --------------

12                Not Applicable
                  --------------

13                Not Applicable
                  --------------

16                Not Applicable
                  --------------

18                Not Applicable
                  --------------
</TABLE>


                                       10
<PAGE>   13


<TABLE>
<S>               <C>
19                Not Applicable
                  --------------

22                Not Applicable
                  --------------

24                Not Applicable
                  --------------

25                Not Applicable
                  --------------

27                Financial Data Schedule (for SEC use only)
                  ------------------------------------------

28                Not Applicable
                  --------------

29                Not Applicable
                  --------------
</TABLE>

*        Incorporated by reference to Exhibit 3.1 filed as part of the Exhibits
         to the Partnership's Registration Statement on Form S-18, Registration
         No. 33-26759.
**       Incorporated by reference to Exhibit 3.2 filed as part of the
         Partnership's Registration Statement on Form S-18, Registration No.
         33-26759.


                                       11
<PAGE>   14


                                   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.

                             SOUTHEAST ACQUISITIONS III, L.P.
                             a Delaware limited partnership


                             By:      SOUTHERN MANAGEMENT GROUP, LLC
                                      General Partner

                             By: /s/ Richard W. Sorenson
                                 ----------------------------------------------
                                      RICHARD W. SORENSON
                                      President and Chief Executive Officer

                  Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following person on behalf of
the Registrant and in the capacities and on the date indicated.


<TABLE>
<CAPTION>
         Signature                                 Title                         Date
         ---------                                 -----                         ----

<S>                                 <C>                                          <C>
/s/ Richard W. Sorenson             President, Chief Executive Officer       3/28/2001
-----------------------             and Chief Financial Officer of
                                    Southern Management Group, LLC
</TABLE>


                                       12
<PAGE>   15
Audited Financial Statements
(A Limited Partnership Scheduled to Terminate December 31, 2001)

SOUTHEAST ACQUISITIONS III, L.P.

December 31, 2000

<TABLE>
<S>                                                        <C>
Independent Auditors' Report..........................     F-2
Balance Sheets........................................     F-3
Statements of Income..................................     F-4
Statements of Partners' Equity (Deficit)..............     F-5
Statements of Cash Flows..............................     F-6
Notes to Financial Statements.........................     F-7
</TABLE>


                                      F-1
<PAGE>   16

                                  [LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

Partners
Southeast Acquisitions III, L.P.
Nashville, Tennessee

We have audited the accompanying balance sheets of Southeast Acquisitions III,
L.P. (a Delaware limited partnership scheduled to terminate December 31, 2001)
as of December 31, 2000 and 1999, and the related statements of income,
partners' equity (deficit), and cash flows for the years ended December 31,
2000, 1999, and 1998. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southeast Acquisitions III,
L.P. (a limited partnership scheduled to terminate December 31, 2001) as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years ended December 31, 2000, 1999, and 1998, in conformity with
generally accepted accounting principles.



                                       Williams Benator & Libeley, LLP


Atlanta, Georgia
January 18, 2001


                                      F-2

 1040 Crown Pointe Parkway, NE Suite 400 Atlanta Georgia 30338 TEL 770 512-0500
                                FAX 770 512-0200
             E-mail info@wblcpa.com Internet http://www.wblcpa.com
Member of American Institute of Certified Public Accountants - Private Companies
                           and SEC Practice Sections
                    Member of RUSSELL BEDFORD INTERNATIONAL

<PAGE>   17

BALANCE SHEETS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

<TABLE>
<CAPTION>
                                                                     December 31
                                                             2000                   1999
                                                          -----------           -----------
<S>                                                       <C>                   <C>
ASSETS

Land and improvements held for sale -- Note F             $ 1,969,243           $ 3,063,712
Cash and cash equivalents                                     534,903               528,342
Accounts receivable                                            22,251                   -0-
Deposit -- Note E                                                 -0-                 5,750
                                                          -----------           -----------

                                                          $ 2,526,397           $ 3,597,804
                                                          ===========           ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Accounts payable and accrued expenses                     $    16,576           $    13,510
Escrow on pending sale of land -- Note D                      412,164                40,000
Payable to previous general partner -- Note B                   3,584                 3,584

Partners' equity (deficit) -- Note C
  General partner                                             (29,880)              (32,774)
  Limited partners (12,400 units outstanding)               2,123,953             3,573,484
                                                          -----------           -----------
                                                            2,094,073             3,540,710
                                                          -----------           -----------

                                                          $ 2,526,397           $ 3,597,804
                                                          ===========           ===========
</TABLE>

See notes to financial statements.


                                      F-3
<PAGE>   18

STATEMENTS OF INCOME

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

<TABLE>
<CAPTION>
                                                            Year Ended December 31
                                                     2000            1999            1998
                                                   --------       ----------       --------
<S>                                                <C>            <C>              <C>
Revenues:
  Gain on sale of land                             $224,598       $1,260,125       $310,015
  Interest and other income                          16,206           22,547         23,380
  Extension fees and interest income on
    pending sale of land -- Note D                  152,631           61,188            -0-
                                                   --------       ----------       --------
                                                    393,435        1,343,860        333,395

Expenses:
  General and administrative                         38,217           42,454         35,940
  Management fee -- Note B                           26,500           26,500         26,500
  Real estate taxes                                  39,182           19,210         28,608
  Insurance                                             173            1,038          1,359
  Provision for loss on land -- Note F                  -0-          141,147            -0-
                                                   --------       ----------       --------
                                                    104,072          230,349         92,407
                                                   --------       ----------       --------

Net income -- Note C:
  General partner                                     2,894           11,135          2,410
  Limited partners                                  286,469        1,102,376        238,578
                                                   --------       ----------       --------

                                                   $289,363       $1,113,511       $240,988
                                                   ========       ==========       ========

Net income per limited partnership unit            $  23.34       $    89.80       $  19.43
                                                   ========       ==========       ========
</TABLE>

See notes to financial statements.


                                      F-4
<PAGE>   19

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

<TABLE>
<CAPTION>
                                                           General           Limited
                                                           Partner           Partners            Total
                                                           --------        -----------        -----------
<S>                                                        <C>             <C>                <C>
Balance at January 1, 1998                                 $(46,319)       $ 4,898,670        $ 4,852,351

Net income for the year ended December 31, 1998               2,410            238,578            240,988

Distributions ($50 per unit)                                    -0-           (620,140)          (620,140)
                                                           --------        -----------        -----------

Balance at December 31, 1998                                (43,909)         4,517,108          4,473,199

Net income for the year ended December 31, 1999              11,135          1,102,376          1,113,511

Distributions ($165 per unit)                                   -0-         (2,046,000)        (2,046,000)
                                                           --------        -----------        -----------

Balance at December 31, 1999                                (32,774)         3,573,484          3,540,710

Net income for the year ended December 31, 2000               2,894            286,469            289,363

Distributions ($140 per unit)                                   -0-         (1,736,000)        (1,736,000)
                                                           --------        -----------        -----------

Balance at December 31, 2000                               $(29,880)       $ 2,123,953        $ 2,094,073
                                                           ========        ===========        ===========
</TABLE>

See notes to financial statements.


                                      F-5
<PAGE>   20

STATEMENTS OF CASH FLOWS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

<TABLE>
<CAPTION>
                                                                           Year Ended December 31
                                                                 2000               1999               1998
                                                              -----------        -----------        ---------
<S>                                                           <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                  $   289,363        $ 1,113,511        $ 240,988
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Gain on sale of land                                       (224,598)        (1,260,125)        (310,015)
      Net proceeds from sale of land                            1,419,067          2,052,257          707,940
      Cash paid for land improvements                            (100,000)               -0-          (18,500)
      Provision for loss on land                                      -0-            141,147              -0-
      Increase in accounts receivable                             (22,251)               -0-              -0-
      Decrease in receivable from affiliate                           -0-                -0-           13,954
      Decrease (increase) in deposit                                5,750             (5,750)             -0-
      Increase (decrease) in accounts payable and
        accrued expenses                                            3,066                (48)          (5,753)
      Increase (decrease) in escrow on pending
        sale of land                                              372,164             40,000          (20,000)
                                                              -----------        -----------        ---------

                                NET CASH PROVIDED
                          BY OPERATING ACTIVITIES               1,742,561          2,080,992          608,614

CASH FLOWS FROM FINANCING ACTIVITIES
  Distributions paid to limited partners                       (1,736,000)        (2,046,000)        (620,140)
                                                              -----------        -----------        ---------

                           INCREASE (DECREASE) IN
                        CASH AND CASH EQUIVALENTS                   6,561             34,992          (11,526)

Cash and cash equivalents at beginning of year                    528,342            493,350          504,876
                                                              -----------        -----------        ---------

                        CASH AND CASH EQUIVALENTS
                                   AT END OF YEAR             $   534,903        $   528,342        $ 493,350
                                                              ===========        ===========        =========
</TABLE>

See notes to financial statements.


                                      F-6
<PAGE>   21

NOTES TO FINANCIAL STATEMENTS

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

December 31, 2000

NOTE A -- DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Southeast Acquisitions III, L.P. (a limited Partnership scheduled to terminate
on December 31, 2001) ("the Partnership") is a Delaware limited partnership that
was formed to acquire undeveloped land. The Partnership was formed during
November 1988 and received equity contributions totaling $12,373,480 through the
sale of 12,400 limited partnership units during 1989. The Partnership was
originally scheduled to terminate on December 31, 1999. However, during November
1997, concurrent with the replacement of the previous general partner, the term
of the Partnership was extended to December 31, 2001. It is the intention of the
general partner to operate in liquidation mode subsequent to December 31, 2001.

During 1989, the Partnership purchased undeveloped land as follows:
approximately 211 acres in Fulton County, Georgia, approximately 265 acres in
Henry County, Georgia, approximately 24 acres in Nashville, Tennessee,
approximately 48 acres in Fort Myers, Florida, and approximately 51 acres in
Columbia, South Carolina. This land was purchased from an affiliate of the
previous general partner. The land in Nashville, Tennessee was sold during 1995.
The land in Henry County, Georgia was sold during 1999. The land in Fort Meyers,
Florida, was sold during 2000. At December 31, 2000, the Partnership's property
consisted of approximately 208 acres in Fulton County, Georgia and approximately
35 acres in Columbia, South Carolina.

The following accounting policies are presented to assist the reader in
understanding the Partnership's financial statements:

Basis of Accounting: The Partnership maintains its accounting records on the
accrual basis of accounting. Sales of land are recognized upon the closing of an
enforceable sales contract and the Partnership's execution of its obligations
under the contract.

Land: Land held for sale is carried at the lower of cost or fair value less
estimated cost to sell. The Partnership's land is carried net of write-downs to
fair value, as determined by independent appraisals. Cumulative original
write-downs to fair value through December 31, 2000 totaled $3,622,126 on the
Fulton County, Georgia land and $625,861 on the Columbia, South Carolina land.


                                      F-7
<PAGE>   22

NOTES TO FINANCIAL STATEMENTS -- Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

NOTE A -- DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES --
  Continued

Income Taxes: Federal and state income taxes have not been provided for in the
financial statements. Under existing law, the Partnership is not treated as a
taxable entity. Rather, each partner must include his allocated share of
Partnership income, loss, gain, deduction, and credit in his individual income
tax return. Write-downs of the land's carrying value that have been recorded for
financial statement purposes will not be recognized for income tax purposes
until the land is sold. At December 31, 2000 and 1999, remaining write-downs
that had not been recognized for income tax purposes totaled $4,052,554 and
$4,964,005, respectively.

Estimates: 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
disclosures 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.

Cash and Cash Equivalents: For purposes of reporting cash flows, the Partnership
considers all demand deposits and highly liquid investments purchased with an
original maturity of three months or less which can be readily converted to cash
on demand, without penalty, to be cash equivalents. At December 31, 2000, cash
on deposit included approximately $737,000 in excess of federally insured
limits.

NOTE B -- RELATED PARTY TRANSACTIONS

During each of the years ended December 31, 2000, 1999 and 1998, the Partnership
paid management fees of $26,500 to the general partner, as provided for in the
amendment to the partnership agreement that was adopted during November 1997.

The amended partnership agreement provides for annual management fees of $26,500
to be paid to the general partner through the year ended December 31, 2001.

At December 31, 2000 and 1999, the Partnership had commissions payable to its
previous general partner of $3,584. During the years ended December 31, 2000,
1999, and 1998, the Partnership paid commissions to the current general partner
related to the sale of land of $72,477, $57,069, and $8,059, respectively.


                                      F-8
<PAGE>   23

NOTES TO FINANCIAL STATEMENTS -- Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

NOTE B -- RELATED PARTY TRANSACTIONS -- Continued

The Partnership agreement provides for reimbursement of expenses incurred by the
general partner related to the administration and operation of the Partnership.
During the years ended December 31, 2000, 1999, and 1998, reimbursements to the
general partner's members and related companies totaled $2,148, $7,016, and
$10,090, respectively.

NOTE C -- PARTNERS' EQUITY

In accordance with the partnership agreement (as amended in November 1997), cash
distributions and Partnership profits and losses are to be allocated as follows:

(a)      Cash Distributions -- Except for distributions in connection with the
         liquidation of the Partnership, cash distributions, if any, will be
         made 100% to the limited partners until the limited partners have
         received (i) a return of their capital contributions ($6,421,337 at
         December 31, 2000) plus (ii) cumulative distributions equal to their
         10% noncompounded cumulative annual return on their adjusted capital
         contributions, as defined ($12,645,561 at December 31, 2000);
         thereafter distributions will be made 70% to the limited partners and
         30% to the general partner. Distributions in connection with the
         Partnership's liquidation will be made in accordance with the partners'
         capital accounts as maintained for federal income tax purposes.

(b)      Profits and losses are to be allocated as provided in the partnership
         agreement. Generally, profits will be allocated to reflect cash
         distributions, or to offset negative balances in the partners' capital
         accounts, but at least 1% of profits will be allocated to the general
         partner. Losses will generally be allocated 99% to the limited
         partners, in proportion to their units, and 1% to the general partner,
         or to reduce any positive account balances in the partners' capital
         accounts. In no event will the general partner be allocated less than
         1% of profits or losses for any year.

Upon Partnership dissolution and termination, the general partner is required to
contribute to the capital of the Partnership the lesser of any negative amount
of its capital account as defined, or 1.01% of the capital contributions made by
the limited partners. Any amount so contributed shall be distributed to the
limited partners in proportion to their positive capital account balances.

During the years ended December 31, 2000, 1999, and 1998, the Partnership made
distributions to the limited partners of $1,736,000, $2,046,000, and $620,140,
respectively, or $140, $165, and $50 a unit, respectively, representing a return
of their capital contributions.


                                      F-9
<PAGE>   24

NOTES TO FINANCIAL STATEMENTS -- Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

NOTE C -- PARTNERS' EQUITY -- Continued

Total compensation paid to all persons, including the general partner, upon the
sale of the Partnership's property is limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract price. Any such
commission or disposition fee paid to the general partner would reduce any
distribution which it would otherwise be entitled to pursuant to the partnership
agreement. The general partner or an affiliate may be given an exclusive right
to sell property for the partnership.

NOTE D -- EXTENSION FEE AND INTEREST INCOME ON PENDING SALE OF LAND

During the year ended December 31, 1999, the Partnership received a
non-refundable extension fee of $50,000 and interest income of $11,188 related
to the extension of the closing date of a pending sales contract. During 1999,
the Partnership also received a deposit of $40,000 to be applied to the sales
price at closing. During the year ended December 31, 2000, the general partner
agreed to apply the non-refundable extension fee of $50,000 that had been
received during 1999 to the sales price at closing. Therefore, the extension fee
of $50,000 was reclassified from revenues to the escrow liability account during
the year ended December 31, 2000.

During the year ended December 31, 2000, the Partnership recognized interest
income of $191,449 related to the extension of the closing date of this pending
sales contract. The Partnership also received additional escrow deposits of
$322,164 to be applied to the sales price at closing. This contract had not
closed as of December 31, 2000.

During the year ended December 31, 2000, the Partnership received extension fees
of $10,000 and interest income of $1,182 on another sale of land that closed in
October 2000.

NOTE E -- DEPOSIT

During the year ended December 31, 1999, the Partnership entered into a joint
agreement with several other parties to share in the cost of the design and
construction of a water main extension to serve each of the parties' properties
in Columbia, South Carolina. During the year ended December 31, 1999, the
Partnership paid an initial deposit of $5,750. This construction was completed
during the year ended December 31, 2000. The Partnership's total cost of
$100,000 was capitalized into land and improvements held for sale.


                                      F-10
<PAGE>   25

NOTES TO FINANCIAL STATEMENTS -- Continued

SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership Scheduled to Terminate December 31, 2001)

NOTE F -- SUMMARY OF PROPERTY AND ACTIVITY

At December 31, 2000, land consisted of the following:

<TABLE>
<CAPTION>
          Description                      Initial Cost       Carrying Amount       Date Acquired
--------------------------------           ------------       ---------------       -------------
<S>                                         <C>               <C>                   <C>
208 acres of undeveloped land in
  Fulton County, Georgia                    $4,972,126          $1,350,000              June 1989

35 acres of undeveloped land
  in Columbia, South Carolina                1,049,671             619,243          December 1989
                                            ----------          ----------

                                            $6,021,797          $1,969,243
                                            ==========          ==========
</TABLE>

There were no liens on the land as of December 31, 2000. At December 31, 2000,
the aggregate carrying value of this land for income tax purposes was
$6,021,797. The difference between the carrying value for financial statement
purposes and income tax purposes resulted from write-downs on the land that were
recorded for financial statement purposes as more fully described in Note A.

Land activity during the years ended December 31, 1998, 1999 and 2000 consisted
of the following:

<TABLE>
<S>                                                 <C>
Balance at January 1, 1998                          $ 4,376,416
Additions -- water and sewer improvements                18,500
Deductions -- cost of land sold                        (397,925)
                                                    -----------
            Balance at December 31, 1998              3,996,991

Additions                                                   -0-
Deductions -- cost of land sold                        (792,132)
Write-down to lower of cost or fair value,
  less estimated cost to sell                          (141,147)
                                                    -----------
            Balance at December 31, 1999              3,063,712

Additions -- water main extension                       100,000
Deductions -- cost of land sold                      (1,194,469)
                                                    -----------

            Balance at December 31, 2000            $ 1,969,243
                                                    ===========
</TABLE>


                                      F-11