`
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
     ---------------------------------------------------------------------
                                    FORM 10-Q





[x]       Report Pursuant to Section 13 or 15(d) of the Securities  Exchange Act
          of 1934 For Quarterly the fiscal quarter ended September 30, 2001

                                       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 1-9670
     ----------------------------------------------------------------------

                             PLM INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


                    Delaware                                 94-3041257
         (State or other jurisdiction of                  (I.R.S. Employer
          Incorporation or organization)                 Identification No.)

              120 Montgomery Street
          Suite 1350, San Francisco, CA                         94104
    (Address of principal executive offices)                 (Zip Code)



        Registrant's telephone number, including area code (415) 445-3201
    -----------------------------------------------------------------------


          Indicate  by check  mark  whether  the  registrant  (1) has  filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No --

          Indicate  the  number of shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest  practicable date: common stock - $.01
par value; outstanding as of November 8, 2001 - 7,554,510 shares.


<PAGE>


                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (in thousands of dollars, except per share amounts)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                        For the Three Months                For the Nine  Months
                                                                        Ended September 30,                 Ended September 30,
                                                                         2001          2000                2001              2000
                                                                     -------------------------------------------------------------

<S>                                                                    <C>             <C>               <C>             <C>
REVENUES
Operating lease income                                                 $      65       $     792         $     695       $   1,101
Management fees                                                            1,375           1,656             4,362           5,205
Partnership interests and other fees                                         (57)          1,500               847           1,688
Acquisition and lease negotiation fees                                     1,847             385             2,032             538
Other                                                                        204             130               834             665
                                                                      ------------------------------------------------------------
  Total revenues                                                           3,434           4,463             8,770           9,197
                                                                      ------------------------------------------------------------

Costs and expenses
Operations support                                                           453             679             1,092           1,850
Depreciation and amortization                                                105             247               519             643
General and administrative                                                   658           1,967             4,054           4,391
                                                                      ------------------------------------------------------------
  Total costs and expenses                                                 1,216           2,893             5,665           6,884
                                                                      ------------------------------------------------------------

OPERATING INCOME                                                           2,218           1,570             3,105           2,313

Interest expense                                                              (1)           (554 )              (4)         (1,424 )
Interest income                                                              101           266                 336             869
Other expense, net                                                            (1)           (175 )             (62)           (177)
                                                                       -----------------------------------------------------------
  Income from continuing operations before income taxes                    2,317           1,107             3,375           1,581

Provision for income taxes                                                   882             419             1,304             595
                                                                       -----------------------------------------------------------

  Income from continuing operations                                        1,435             688             2,071             986

Loss from discontinued operations, net of income tax                          --            (509)               --            (164)
Gain on disposition of discontinued operations, net of income tax             --           4,785                --           4,785
                                                                       -----------------------------------------------------------

     Net income to common shares                                       $   1,435       $   4,964         $   2,071       $   5,607
                                                                       ===========================================================

Basic earnings per weighted-average common share
  outstanding
      Income from continuing operations                                $    0.19       $    0.09         $    0.27       $    0.13
      Loss from discontinued operations                                       --           (0.06)               --           (0.02)
      Gain on disposition of discontinued operations                          --            0.64                --            0.63
                                                                       -----------------------------------------------------------
                                                                       $   $0.19       $    0.67         $    0.27       $    0.74
                                                                       ===========================================================

Diluted earnings per weighted-average common share
  outstanding
      Income from continuing operations                                $    0.19       $    0.09         $    0.27       $    0.13
      Loss from discontinued operations                                       --           (0.07)               --           (0.02)
      Gain on disposition of discontinued operations                          --            0.64                --            0.63
                                                                       -----------------------------------------------------------
                                                                       $    0.19       $    0.66         $    0.27       $    0.74
                                                                       ===========================================================
</TABLE>





               See accompanying notes to these unaudited condensed
                       consolidated financial statements.

                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands of dollars, except share amounts)
                                   (unaudited)


                                     ASSETS
<TABLE>
<CAPTION>
                                                                                             September 30,         December 31,
                                                                                                  2001                 2000
                                                                                           ---------------------------------------

<S>                                                                                         <C>              <C>
Cash and cash equivalents                                                                   $    12,949      $            5,874
Receivables (net of allowance for doubtful accounts of $0.1 million as of
  September 30, 2001 and December 31, 2000)                                                         129                   1,045
Receivables from affiliates                                                                         914                   1,207
Equity interest in affiliates                                                                    15,169                  15,753
Assets held for sale                                                                                 --                  10,250
Restricted cash and cash equivalents                                                                 --                   2,530
Other assets, net                                                                                 2,764                   3,748
                                                                                            -------------------------------------
    Total assets                                                                            $    31,925      $           40,407
                                                                                            =====================================


                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Payables and other liabilities                                                              $     6,112      $          15,909
Deferred income taxes                                                                             8,733                  8,885
                                                                                            -------------------------------------
  Total liabilities                                                                              14,845                 24,794

SHAREHOLDERS' EQUITY
Preferred stock ($0.01 par value, 10.0 million shares
  authorized, none outstanding as of September 30, 2001 and December 31, 2000)                       --                     --
Common stock ($0.01 par value, 50.0 million shares authorized,
  12,035,755 issued and 7,554,510 outstanding as of September
  30, 2001 and December 31, 2000)                                                                   112                    112
Paid-in capital, in excess of par                                                                36,943                 37,547
Treasury stock (4,481,245 shares as of September 30, 2001 and
  December 31, 2000)                                                                            (19,875)               (19,875)
Accumulated deficit                                                                                (100)                (2,171)
                                                                                            -------------------------------------
  Total shareholders' equity                                                                     17,080                 15,613
                                                                                            -------------------------------------
    Total liabilities and shareholders' equity                                              $    31,925      $          40,407
                                                                                            =====================================
</TABLE>














               See accompanying notes to these unaudited condensed
                       consolidated financial statements.



                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
                SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME For
                  the Year Ended December 31, 2000 and the Nine
                         Months Ended September 30, 2001
                            (in thousands of dollars)
                                   (unaudited)


<TABLE>
<CAPTION>

                                                                                      Accumulated
                                                    Common Stock                     Deficit And
                                     --------------------------------------------
                                                     Paid-in                          Accumulated
                                                   Capital, in                           Other                Total
                                             At       Excess             Treasury    Comprehensive        Shareholders'
                                            Par       of Par              Stock          Income              Equity
                                     ------------------------------------------------------------------------------------

<S>                                         <C>      <C>                 <C>            <C>           <C>
      Balances, December 31, 1999           $  112   $     75,059        $  (18,324)    $   (7,434)   $     49,413
    Comprehensive income:
      Net income                                                                             5,263           5,263
    Exercise of stock options                                (289)            1,037                            748
    Common stock purchases                                                   (2,588)                        (2,588)
    Liquidating distribution                              (37,223)                                         (37,223)
                                           ------------------------------------------------------------------------------
      Balances, December 31, 2000              112         37,547           (19,875)        (2,171 )        15,613

    Comprehensive income:
      Net income                                                                             2,071           2,071
    Compensation expense related to                           315                                              315
    variable stock option plans
    Redemption of stock options                              (919)                                            (919)
                                           ------------------------------------------------------------------------------
      Balances, September 30, 2001          $  112   $     36,943        $  (19,875)    $     (100)   $     17,080
                                           ==============================================================================
</TABLE>



















        See accompanying notes to these unaudited condensed consolidated
                             financial statements.




                    PLM INTERNATIONAL, INC. AND SUBSIDIAIRIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                                   For the Nine Months
                                                                                                   Ended September 30,
                                                                                               2001                2000
                                                                                            --------------------------------
<S>                                                                                         <C>                   <C>
OPERATING ACTIVITIES
Income from continuing operations                                                           $     2,071           $       986
Adjustments to reconcile income from continuing operations to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                                                                   519                   643
    Compensation expense related to variable stock options                                          315
    Deferred income tax                                                                            (152)               (3,441)
    Gain on disposition of discontinued operations, net of income tax                                --                (4,785)
    Loss on disposition of assets, net                                                              104                    --
    Equity income from managed programs                                                          (1,304)               (2,166)
    (Decrease) increase in payables and other liabilities                                        (9,797)               16,679
    Decrease in receivables and receivables from affiliates                                       1,209                 2,619
    Amortization of goodwill related to the managed programs                                        456                   672
    Decrease in other assets                                                                        174                 2,230
                                                                                            -----------------------------------
       Cash (used in) provided by operating activities of continuing operations                  (6,405)               13,437
       Cash provided by operating activities of discontinued operations                              --                14,427
                                                                                            -----------------------------------
                                                                                            -----------------------------------
      Net cash (used in) provided by operating activities                                        (6,405)               27,864
                                                                                            -----------------------------------

INVESTING ACTIVITIES
Cash distribution from managed programs                                                           1,432                 2,104
Loans made to affiliates                                                                         (5,500)                   --
Repayment of loans made to affiliates                                                             5,500                    --
Principal payments received on finance leases                                                        --                   279
Purchase of property, plant, and equipment                                                          (71)                   --
Purchase of equipment held for sale                                                                  --               (14,000)
Proceeds from sale of subsidiary, net of transaction costs                                           --                98,117
Proceeds from sale of equipment for lease                                                           258                    --
Proceeds from assets held for sale                                                               10,250                14,000
Decrease (increase) in restricted cash and restricted cash equivalents                            2,530                (1,191)
Cash provided by investing activities of discontinued operations                                     --                 6,813
                                                                                        ---------------------------------------
      Net cash provided by investing activities                                                  14,399               106,122
                                                                                        ---------------------------------------

FINANCING ACTIVITIES
Borrowings of short-term warehouse credit facility                                                   --                10,200
Repayment of short-term warehouse credit facility                                                    --               (10,200)
Repayment of senior secured notes                                                                    --                (5,640)
Proceeds from exercise of stock options                                                              --                    30
Redemption of stock options                                                                        (919)                   --
Purchase of stock                                                                                    --                (2,588)
Cash used in financing activities of discontinued operations                                         --               (59,521)
                                                                                            -----------------------------------
      Net cash used in financing activities                                                        (919)              (67,719)
                                                                                            -----------------------------------

Net increase in cash and cash equivalents                                                         7,075                66,267
Cash and cash equivalents at beginning of period                                                  5,874                 2,089
                                                                                            -----------------------------------
Cash and cash equivalents at end of period                                                  $    12,949           $    68,356
                                                                                            ===================================

SUPPLEMENTAL INFORMATION
Net cash paid for interest from continuing operations                                       $         4           $     1,456
                                                                                            ===================================
Net cash paid for interest from discontinued operations                                     $        --           $     4,879
                                                                                            ===================================
                                                                                            ===================================
Net cash paid for income taxes                                                              $     6,245           $       351
                                                                                            ===================================
</TABLE>
               See accompanying notes to these unaudited condensed
                       consolidated financial statements.


                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1. General

In the opinion of management,  the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary,  consisting primarily of
normal recurring  accruals,  to present fairly PLM  International,  Inc. and its
wholly-owned  subsidiaries  (the  Company's  or PLMI)  financial  position as of
September 30, 2001 and December 31, 2000, statements of income for the three and
nine  months  ended  September  30,  2001 and 2000,  statements  of  changes  in
shareholders'  equity and  comprehensive  income for the year ended December 31,
2000 and the nine months ended  September 30, 2001, and statements of cash flows
for the nine months ended September 30, 2001 and 2000.  Certain  information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles in the United States of
America have been condensed or omitted from the accompanying unaudited condensed
consolidated financial statements. For further information,  reference should be
made to the financial  statements  and notes  thereto  included in the Company's
Annual Report on Form 10-K/A for the year ended  December 31, 2000, on file with
the Securities and Exchange Commission.

On December 22, 2000, the Company  announced that it had signed an agreement and
plan of merger with MILPI  Acquisition  Corporation  (MILPI).  In December 2000,
MILPI tendered for all the outstanding common stock of the Company for $3.46 per
share. In February 2001, PLMI announced that MILPI had completed its cash tender
offer for the outstanding common stock of PLMI. MILPI acquired 83% of the common
shares  outstanding  of PLMI through the tender.  MILPI  intends to complete its
acquisition  of PLMI by  effecting  a merger  of PLMI  into  MILPI.  In order to
effectuate the merger,  PLMI must hold a special meeting of its  shareholders to
approve the merger proposal.  MILPI owns sufficient shares to assure approval of
the merger  proposal  at the  special  meeting and has agreed to vote all of its
shares in favor of the merger  proposal.  In February  2001, the Company filed a
preliminary  proxy  statement for the special  meeting.  In connection  with its
review  of  the  preliminary  proxy  materials,   the  Securities  and  Exchange
Commission  (SEC) has  informed  the four trusts that own MILPI that it believes
the trusts may be unregistered  investment  companies  within the meaning of the
Investment Company Act of 1940. The managing trustee of the trusts is engaged in
discussions with the staff at the SEC regarding this matter. If necessary,  each
of the trusts  intends to avoid being deemed an investment  company by disposing
of or acquiring  certain assets that it might not otherwise  dispose or acquire.
PLMI does not intend to schedule the special meeting of  stockholders  until the
issues with the SEC are resolved.  Upon  completion of the merger,  PLMI will no
longer be publicly traded.

2. Reclassifications

Certain  prior-period  amounts have been  reclassified to conform to the current
period's presentation.

3. Discontinued Operations

In October 1999,  the Company  agreed to sell AFG, its commercial and industrial
equipment  leasing  subsidiary.  On February 25, 2000, the  shareholders of PLMI
approved  the  transaction.  The sale of AFG was  completed on March 1, 2000 for
total proceeds of $32.2 million. Taxes and transaction costs related to the sale
were $3.9  million.  Net proceeds to the Company from the sale of AFG were $28.3
million.  In addition,  AFG  distributed  to PLMI certain assets with a net book
value of $2.7 million and cash of $0.4 million immediately prior to the sale.

On May 24,  2000,  the Company  signed an asset  purchase  agreement to sell the
refrigerated and dry trailer assets and related  liabilities.  PLMI shareholders
approved  the  transaction  on August 25,  2000.  For the sale of the  Company's
trailer  assets,  the Company  received $69.2 million for its 4,250 trailers and
the purchaser assumed $49.2 million in debt and other liabilities, including the
operation of most of the PLM


<PAGE>


                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

3. Discontinued Operations (continued)

Trailer  Leasing's  trailer  yards located  throughout  the United  States.  The
Company paid $5.0 million of income tax related to the trailer sale in the first
quarter of 2001.

Accordingly, both the Company's AFG and trailer leasing operations are accounted
for as discontinued  operations.  The loss from discontinued  operations and the
gain on  disposition  of  discontinued  operations for the three and nine months
ended September 30, 2000 are as follows (in thousands of dollars):
<TABLE>
<CAPTION>
                                               For the three months ended             For the nine months ended
                                                   September 30, 2000                     September 30, 2000
                                           ------------------------------------ ------------------------------------
                                            Trailer                              Trailer
                                            Leasing       AFG        Total       Leasing       AFG        Total
                                           ----------------------------------   ------------------------------------

<S>                                        <C>        <C>        <C>            <C>         <C>       <C>
REVENUES                                   $   9,446  $       -- $     9,446    $  24,869   $   4,076 $    28,945
COSTS AND EXPENSES                            (9,265)         --      (9,265)     (21,811)     (2,271)    (24,082)
                                           ------------------------------------ ------------------------------------
Operating income                                 181          --         181        3,058       1,805       4,863
Interest expense, net                         (1,005)         --      (1,005)      (3,148)     (1,655)     (4,803)
Other expense                                     (4)         --          (4)          (4)         --          (4)
                                         ---------------------------------------------------------------------------
Income (loss) from discontinued
operations
  before income taxes                           (828)         --        (828)         (94)        150          56
Provision for (benefit from) income tax         (319)         --        (319)         (37)         57          20
Income previously accrued as a component
  of loss of a discontinued operation             --          --          --           --        (200)       (200)
                                           ------------------------------------ ------------------------------------
Loss from discontinued operations          $    (509) $       -- $      (509)   $     (57)  $    (107)$      (164)

Gain on disposition of discontinued
operations,
net of income tax                          $   4,785  $       -- $     4,785    $   4,785   $      -- $     4,785
                                           ==================================== ====================================
</TABLE>

4. Assets Held For Sale

As of  September  30,  2001,  the  Company  had no assets  held for sale.  As of
December 31, 2000, the Company had $10.3 million in marine  containers that were
reported  as assets  held for sale.  During the first nine  months of 2001,  the
Company sold these  marine  containers  to  affiliated  programs at cost,  which
approximated their fair market value.

5. Debt

In April 2001, the Company entered into a joint $15.0 million credit facility on
behalf of Acquisub LLC (ACQ),  a  wholly-owned  subsidiary  of the Company,  PLM
Equipment Growth Fund VI (EGF VI), PLM Equipment Growth and Income Fund VII (EGF
VII), and Professional  Lease Management Income Fund I (Fund I), each affiliated
investment  programs of the Company.  The facility provides interim financing of
up to 100% of the aggregate  book value of eligible  equipment as defined in the
credit facility.  The Company,  EGF VI, EGF VII, and Fund I,  collectively,  may
borrow up to $15.0 million under this  facility.  Outstanding  borrowings by one
borrower  reduce the amount  available to each of the other  borrowers under the
facility.  Individual  borrowings may be outstanding  for no more than 270 days,
with all advances due no later than April 12, 2002.  Interest  accrues at either
the prime rate or adjusted LIBOR plus 2.00 %, at the borrower's  option,  and is
set at the time of an advance of funds.  The Company  guarantees all borrowings.
As of September 30, 2001, there were no loans outstanding under this facility to
any of the borrowers.

6. Shareholders' Equity

The total common shares  outstanding were 7,554,510 as of September 30, 2001 and
December 31, 2000.







                    PLM INTERNATIONAL, INC. AND SUBSIDIAIRIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

6. Shareholders' Equity (continued)

Net income per basic  weighted-average  common share outstanding was computed by
dividing net income to common  shares by the  weighted-average  number of shares
deemed  outstanding  during the period.  The  weighted-average  number of shares
deemed outstanding for the basic earnings per share calculation during the three
months  ended   September   30,  2001  and  2000  was  7,554,510  and  7,429,271
respectively.  The weighted-average  number of shares deemed outstanding for the
basic earnings per share calculation  during the nine months ended September 30,
2001 and 2000 was 7,554,510 and 7,592,002,  respectively.  The  weighted-average
number of shares  deemed  outstanding,  including  potentially  dilutive  common
shares, for the diluted earnings per  weighted-average  share calculation during
the three months ended  September 30, 2001 and 2000 was 7,554,510 and 7,473,131,
respectively.   The  weighted-average   number  of  shares  deemed  outstanding,
including  potentially  dilutive  common  shares,  for the diluted  earnings per
weighted-average  share  calculation  during the nine months ended September 30,
2001 and 2000 was 7,576,343 and 7,647,567 respectively.

Concurrent  with the  completion of the tender offer by MILPI (see Note 1 to the
unaudited condensed  consolidated financial statements) all stock options became
100% vested.  The Company redeemed all of the 495,000  outstanding stock options
in the first quarter of 2001 for  $919,000.  As of September 30, 2001 there were
no stock options outstanding.

7. Legal Matters

PLM  International,  Inc.  and  various of its  wholly  owned  subsidiaries  are
defendants in a class action  lawsuit filed in January 1997 and which is pending
in the United  States  District  Court for the  Southern  District  of  Alabama,
Southern  Division  (Civil  Action  No.  97-0177-BH-C)  (the  court).  The named
plaintiffs are six individuals who invested in PLM Equipment Growth Fund IV, PLM
Equipment  Growth  Fund V (Fund  V),  PLM  Equipment  Growth  Fund  VI,  and PLM
Equipment Growth & Income Fund VII (the Partnerships), each a California limited
partnership  for which the  Company's  wholly owned  subsidiary,  PLM  Financial
Services, Inc. (FSI) acts as the General Partner.

The complaint  asserts  causes of action  against all  defendants  for fraud and
deceit,  suppression,  negligent  misrepresentation,  negligent and  intentional
breaches of fiduciary  duty,  unjust  enrichment,  conversion,  and  conspiracy.
Plaintiffs  allege that each  defendant  owed  plaintiffs  and the class certain
duties due to their  status as  fiduciaries,  financial  advisors,  agents,  and
control persons.  Based on these duties,  plaintiffs  assert  liability  against
defendants  for improper  sales and marketing  practices,  mismanagement  of the
Partnerships,   and  concealing  such   mismanagement   from  investors  in  the
Partnerships.  Plaintiffs  seek  unspecified  compensatory  damages,  as well as
punitive damages.

In June 1997, the Company and the affiliates who are also defendants in the Koch
action were named as defendants in another  purported  class action filed in the
San Francisco  Superior Court, San Francisco,  California,  Case No. 987062 (the
Romei  action).  The plaintiff is an investor in Fund V, and filed the complaint
on her own  behalf and on behalf of all class  members  similarly  situated  who
invested in the Partnerships.  The complaint alleges the same facts and the same
causes of action as in the Koch action, plus additional causes of action against
all of the  defendants,  including  alleged  unfair and deceptive  practices and
violations of state  securities law. In July 1997,  defendants  filed a petition
(the  petition)  in federal  district  court under the Federal  Arbitration  Act
seeking to compel  arbitration  of  plaintiff's  claims.  In October  1997,  the
district court denied the Company's  petition,  but in November 1997,  agreed to
hear the Company's motion for reconsideration. Prior to reconsidering its order,
the district  court  dismissed  the  petition  pending  settlement  of the Romei
action,  as  discussed  below.  The state court  action  continues  to be stayed
pending such resolution.

In February 1999 the parties to the Koch and Romei actions  agreed to settle the
lawsuits,  with  no  admission  of  liability  by any  defendant,  and  filed  a
Stipulation  of Settlement  with the court.  The  settlement is divided into two
parts,  a  monetary  settlement  and  an  equitable  settlement.   The  monetary
settlement


<PAGE>


                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

7. Legal Matters (continued)

provides  for a  settlement  and  release of all claims  against  defendants  in
exchange  for payment for the  benefit of the class of up to $6.6  million.  The
final  settlement  amount  will  depend on the  number of claims  filed by class
members,  the amount of the administrative costs incurred in connection with the
settlement,  and  the  amount  of  attorneys'  fees  awarded  by  the  court  to
plaintiffs'  attorneys.  The Company will pay up to $0.3 million of the monetary
settlement,  with  the  remainder  being  funded  by an  insurance  policy.  For
settlement  purposes,  the monetary  settlement class consists of all investors,
limited partners, assignees, or unit holders who purchased or received by way of
transfer or assignment  any units in the  Partnerships  between May 23, 1989 and
August  30,  2000.  The  monetary  settlement,  if  approved,  will  go  forward
regardless of whether the equitable settlement is approved or not.

The equitable  settlement  provides,  among other things, for: (a) the extension
(until  January 1, 2007) of the date by which FSI must complete  liquidation  of
the Partnerships'  equipment, (b) the extension (until December 31, 2004) of the
period  during  which FSI can  reinvest the  Partnerships'  funds in  additional
equipment,  (c)  an  increase  of up to  20% in the  amount  of  front-end  fees
(including  acquisition and lease negotiation fees) that FSI is entitled to earn
in  excess of the  compensatory  limitations  set  forth in the  North  American
Securities  Administrator's  Association's  Statement of Policy;  (d) a one-time
repurchase  by each of  Funds  V, VI and VII of up to 10% of that  partnership's
outstanding units for 80% of net asset value per unit; and (e) the deferral of a
portion of the  management  fees paid to an  affiliate  of FSI  until,  if ever,
certain  performance  thresholds have been met by the  Partnerships.  Subject to
final court approval, these proposed changes would be made as amendments to each
Partnership's  limited  partnership  agreement  if less than 50% of the  limited
partners  of each  Partnership  vote  against  such  amendments.  The  equitable
settlement  also  provides  for  payment of  additional  attorneys'  fees to the
plaintiffs' attorneys from Partnership funds in the event, if ever, that certain
performance  thresholds  have  been  met  by  the  Partnerships.  The  equitable
settlement class consists of all investors,  limited partners, assignees or unit
holders who on August 30, 2000 held any units in Funds V, VI, and VII, and their
assigns and successors in interest.

The court  preliminarily  approved  the monetary and  equitable  settlements  in
August 2000, and information regarding each of the settlements was sent to class
members in  September  2000. A final  fairness  hearing was held on November 29,
2000, and on April 25, 2001, the federal  magistrate  judge assigned to the case
entered a Report and Recommendation  recommending final approval of the monetary
and equitable settlements to the federal district court judge. On July 24, 2001,
the federal  district  court judge  adopted the Report and  Recommendation,  and
entered a final judgment  approving both  settlements.  No appeal has been filed
and the time for filing an appeal has run. Therefore, monetary class members who
submitted claims will be paid their  settlement  amount out of the monetary fund
by the third-party  claims  administrator  once the final settlement amounts are
calculated  pursuant to the formula set forth in the  settlement  agreement  and
court order.  Similarly the equitable  settlement will be implemented  promptly.
For  those  equitable  class  members  who  submitted  timely  requests  for the
repurchase of their limited partnership units, the respective  partnerships will
repurchase such units by December 31, 2001.

The Company is involved as plaintiff or defendant in various other legal actions
incidental  to its  business.  Management  does  not  believe  that any of these
actions will be material to the financial  condition or results of operations of
the Company.

8. Operating Segments

In the first  nine  months of 2000,  the  Company  operated  in three  operating
segments:  the management of investment  programs and other  equipment  leasing,
trailer leasing,  and commercial and industrial equipment leasing and financing.
The  management  of  investment  programs and other  equipment  leasing  segment
involves managing the Company's syndicated  investment  programs,  from which it
earns fees and equity interests,  and arranging short-term to mid-term operating
leases of other  equipment.  The  Company  sold its  commercial  and  industrial
equipment  leasing  subsidiary,  AFG on March 1,  2000 and its  trailer  leasing
operations on September 30, 2000. Accordingly,  these segments are accounted for
as  discontinued  operations.  With  the  sale of AFG and  the  trailer  leasing
operations,

                    PLM INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


8. Operating Segments (continued)

the Company operated in only one segment in the first nine months of 2001, which
is the  management of  investment  programs and other  transportation  equipment
leasing.  The Company  evaluates the performance of each segment based on profit
or loss from operations before allocating general and  administrative  expenses,
certain operation support costs and income taxes.






















                      (this space intentionally left blank)



<PAGE>


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

MANAGEMENT OF INVESTMENT PROGRAMS

The Company syndicated  investment programs from which it earns various fees and
equity interests.  Professional Lease Management Income Fund I, LLC (Fund I) was
structured as a limited liability company with a no front-end fee structure. The
previously  syndicated limited partnership programs allow the Company to receive
fees for the  acquisition  and  initial  leasing  of the  equipment.  The Fund I
program does not provide for acquisition and lease negotiation fees. The Company
invested  the  equity  raised   through   syndication   for  these  programs  in
transportation  equipment and related assets,  which it manages on behalf of the
investors.  The  equipment  management  activities  for these  types of programs
generate  equipment  management fees for the Company over the life of a program.
The  limited  partnership  agreements  entitle the Company to receive a 1% or 5%
interest in the cash  distributions  and earnings of a  partnership,  subject to
certain  allocation  provisions.  The Fund I agreement entitles the Company to a
15%  interest  in the cash  distributions  and 1% of  earnings  of the  program,
subject  to certain  allocation  provisions  per the  operating  agreement.  The
Company's  interest in the earnings and distributions of Fund I will increase to
25% after the investors  have  received  distributions  equal to their  original
invested capital.

In 1996, the Company announced the suspension of public syndication of equipment
leasing  programs  with  the  close  of Fund I. As a  result  of this  decision,
revenues  earned  from  managed   programs,   which  include   management  fees,
partnership interests and other fees, and acquisition and lease negotiation fees
will be reduced in the future as the older  programs  liquidate  and the managed
equipment portfolio for these programs becomes permanently reduced.

In  accordance  with  certain  limited  partnerships'  agreements,  four limited
partnerships have entered their liquidation phases and the Company has commenced
an  orderly  liquidation  of  the  partnerships'  assets.  Two  of  the  limited
partnerships, PLM Equipment Growth Fund III and PLM Equipment Growth Fund IV are
expected to be liquidated by the end of 2002.  Two of the limited  partnerships,
PLM  Equipment  Growth Fund and PLM Equipment  Growth Fund II will  terminate on
December 31, 2006, unless  terminated  earlier upon the sale of all equipment or
by certain other events.

The Company will  occasionally  own  transportation  equipment  prior to sale to
affiliated programs. During this period, the Company earns lease revenue and may
incur interest expense.

TRAILER LEASING

Prior to 2001, the Company operated 22 trailer rental  facilities doing business
as PLM Trailer Leasing that engaged in short-term and mid-term operating leases.

On May 24,  2000,  the Company  signed an asset  purchase  agreement to sell its
refrigerated and dry trailer assets and related  liabilities.  PLMI shareholders
approved the transaction on August 25, 2000. The sale was completed on September
30, 2000. The Company received $69.2 million,  net of transaction costs, for its
4,250  trailers  and the  purchaser  assumed  $49.2  million  in debt and  other
liabilities,  including the operation of most of PLM Trailer  Leasing's  trailer
yards located  throughout  the United  States.  The Company paid $5.0 million of
income tax related to the trailer sale in the first quarter of 2001.

Accordingly,  the Company's  trailer  leasing is accounted for as a discontinued
operation.

COMMERCIAL AND INDUSTRIAL EQUIPMENT LEASING AND FINANCING

Prior to 2001, the Company funded and managed  long-term  direct finance leases,
operating  leases,  and loans through its American  Finance  Group,  Inc.  (AFG)
subsidiary.  Master  lease  agreements  were  entered  into  with  predominately
investment-grade  lessees  and served as the basis for  marketing  efforts.  The
underlying  assets  represented  a broad  range  of  commercial  and  industrial
equipment, such as: point-of-sale,  materials handling, computer and peripheral,
manufacturing, general-purpose plant and warehouse, communications, medical, and
construction and mining equipment.  Through AFG, the Company was also engaged in
the  management of  institutional  programs for which it  originated  leases and
received  acquisition and management  fees. The Company also earned  syndication
fees for arranging  purchases and sales of equipment to other unaffiliated third
parties.

In October  1999,  the Company  agreed to sell AFG. On February  25,  2000,  the
shareholders of PLMI approved the transaction.  The sale of AFG was completed on
March 1, 2000 for total proceeds of $32.2 million.  Taxes and transaction  costs
related to the sale were $3.9 million. Net proceeds to the Company from the sale
of AFG were $28.3 million. In addition,  AFG distributed to PLMII certain assets
with a net book value of $2.7 million and cash of $0.4 million immediately prior
to the sale.

Accordingly,  the Company's  commercial  and industrial  leasing  operations are
accounted for as a discontinued operation.

COMPARISON  OF THE  COMPANY'S  OPERATING  RESULTS  FOR THE  THREE  MONTHS  ENDED
SEPTEMBER 30, 2001 AND 2000

The following analysis reviews the operating results of the Company:

REVENUES
<TABLE>
<CAPTION>

                                                                               For the Three Months
                                                                                Ended September 30,

                                                                       2001                          2000
                                                                     -----------------------------------------
                                                                                (in thousands of dollars)

<S>                                                                   <C>                     <C>
Operating lease income                                                $        65             $        792
Management fees                                                             1,375                    1,656
Partnership interests and other fees                                          (57)                   1,500
Acquisition and lease negotiation fees                                      1,847                      385
Other                                                                         204                      130
                                                                     -----------------------------------------
  Total revenues                                                      $     3,434             $      4,463
</TABLE>

The  fluctuations  in revenues for the three months  ended  September  30, 2001,
compared to the three  months  ended  September  30, 2000,  are  summarized  and
explained below.

OPERATING LEASE INCOME BY TYPE:
<TABLE>
<CAPTION>
                                                                                  For the Three Months
                                                                                   Ended September 30,

                                                                       2001                           2000
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)

<S>                                                                   <C>                     <C>
Lease income from assets held for sale                                $        --             $        623
Other                                                                          65                      169
                                                                     -----------------------------------------
  Total operating lease income                                        $        65             $        792
</TABLE>

Operating  lease  income  includes  revenues  generated  from  assets  held  for
operating  leases and assets  held for sale that are on lease.  Operating  lease
income  decreased  $0.7 million during the third quarter of 2001 compared to the
same quarter of 2000.

A $0.6  million  decrease in  operating  lease  income in the three months ended
September  30, 2001 related to assets held for sale.  The Company held no assets
for sale in the three months ended September 30, 2001.  During the third quarter
of 2000,  the Company  owned $14.0 million in marine  containers  that were sold
during the quarter to affiliated programs at cost, which approximated their fair
market value.

A $0.1  million  decrease in operating  lease income from other assets  resulted
from a  reduction  in other  assets  held for  lease in the three  months  ended
September 30, 2001 compared to the similar period in 2000.





MANAGEMENT FEES:

Management fees are, for the most part, based on the gross revenues generated by
equipment under  management.  Management fees were $1.4 million and $1.7 million
for the quarters ended September 30, 2001 and 2000,  respectively.  The decrease
in management fees resulted from a net decrease in managed  equipment in the PLM
Equipment Growth Fund programs and Professional  Lease Management Income Fund I,
LLC. With the  termination of syndication  activities in 1996,  management  fees
from the older  programs are decreasing and are expected to continue to decrease
as the programs liquidate their equipment portfolios.

PARTNERSHIP INTERESTS AND OTHER FEES:

The Company  records as  revenues  its equity  interest  in the  earnings of the
Company's  affiliated  programs.  The  Company's  net loss  from the  affiliated
programs was $0.1 million for the quarter  ended  September 30, 2001 compared to
income of $1.3  million for the three  months  ended  September  30,  2000.  The
decrease of $1.4 million in net  earnings  from the  affiliated  entities in the
third  quarter of 2001 compared to the same quarter of 2000 is a result of lower
gains from the  disposition  of  equipment in certain of the EGF programs in the
third quarter of 2001 compared to 2000. A decrease of $0.2 million in other fees
was due to decreased  sales  commissions in the three months ended September 30,
2001, compared to the same period of 2000.

ACQUISITION AND LEASE NEGOTIATION FEES:

During the quarter ended  September  30, 2001,  the Company did not purchase any
transportation  and other  equipment for the EGF programs.  Concurrent  with the
final settlement of the Koch and Romei matters in the third quarter of 2001 (see
Note  7 to the  unaudited  condensed  consolidated  financial  statements),  the
Company  recognized  income of $1.8 million of acquisition and lease negotiation
fees.  These  fees were  earned on  equipment  purchased  in prior  periods  for
investment  programs that had reached the maximum  allowable  fees that could be
taken.  With the settlement of these lawsuits,  the amount of fees that could be
earned from these investment  programs was increased and the previously deferred
fees were taken into income.  During the quarter ended  September 30, 2000,  the
Company, on behalf of the EGF programs,  purchased  transportation equipment for
$7.0 million,  and $0.4 million in acquisition and lease  negotiation  fees were
earned on these purchases

COSTS AND EXPENSES
<TABLE>
<CAPTION>
                                                                                  For the Three Months
                                                                                      Ended September 30,

                                                                       2001                         2000
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)

<S>                                                                   <C>                     <C>
Operations support                                                    $       453             $        679
Depreciation and amortization                                                 105                      247
General and administrative                                                    658                    1,967
                                                                     -----------------------------------------
  Total costs and expenses                                            $     1,216             $      2,893
</TABLE>

OPERATIONS SUPPORT:

Operations  support expense,  including salary and  office-related  expenses for
operational  activities,  decreased  $0.2 million (33%) during the quarter ended
September  30, 2001,  compared to the quarter  ended  September  30,  2000.  The
decrease  in  operations  support  expense  was  primarily  due to a decrease in
compensation and benefits expense resulting from staff reductions.





DEPRECIATION AND AMORTIZATION:

Depreciation  and  amortization  expense  decreased  $0.1 million  (57%) for the
quarter ended  September 30, 2001,  compared to the quarter ended  September 30,
2000.  The decrease  resulted  primarily  from a decrease in the volume of other
assets held for operating lease.

GENERAL AND ADMINISTRATIVE:

General and  administrative  expenses  decreased  $1.3 million  (67%) during the
quarter ended  September 30, 2001,  compared to the quarter ended  September 30,
2000. The reduction  resulted from lower  compensation and benefits costs due to
staffing reductions.

OTHER INCOME AND EXPENSES
<TABLE>
<CAPTION>

                                                                               For the Three Months
                                                                                Ended September 30,
                                                                       2001                         2000
                                                                     -----------------------------------------
                                                                            (in thousands of dollars)

<S>                                                                   <C>                     <C>
Interest expense                                                      $       (1)             $       (554)
Interest income                                                              101                       266
Other expenses, net                                                           (1)                     (175)
</TABLE>

INTEREST EXPENSE:

Interest  expense  decreased  $0.6  million  (100%)  during  the  quarter  ended
September 30, 2001,  compared to the quarter ended September 30, 2000 due to the
repayment of the Company's senior secured notes in 2000.

INTEREST INCOME:

Interest income  decreased $0.2 million (62%) during the quarter ended September
30,  2001,  compared  to the same  quarter  of 2000 due to  lower  average  cash
balances and lower interest rates on cash  investments  during the quarter ended
September 30, 2001 compared to the same quarter of 2000.

OTHER EXPENSES, NET:

Other expenses of $0.2 million in the third quarter of 2000 primarily related to
litigation costs. A similar event did not occur in the third quarter of 2001.

PROVISION FOR INCOME TAXES:

For the three months ended  September 30, 2001, the provision for income tax was
$0.9 million,  representing an effective rate of 38%. For the three months ended
September 30, 2000, the provision for income tax was $0.4 million,  representing
an effective rate of 38%.

LOSS FROM DISCONTINUED OPERATIONS

On May 24,  2000,  the Company  signed an asset  purchase  agreement to sell its
refrigerated and dry trailer assets and related  liabilities.  PLMI shareholders
approved the transaction on August 25, 2000. The sale was completed on September
30, 2000.



<PAGE>


Accordingly,  the Company's  trailer  leasing  operations are accounted for as a
discontinued  operation.  The loss from discontinued  operations and the gain on
disposition of discontinued  operations for the quarter ended September 30, 2000
is as follows (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                          Trailer
                                                                          Leasing
                                                                       --------------
<S>                                                                     <C>
REVENUES
Operating lease income                                                  $    9,259
Management fees                                                                192
Loss on disposition of assets, net                                             (18)
Other                                                                           13
                                                                       --------------
    Total revenues                                                           9,446
                                                                       --------------

COSTS AND EXPENSES
Operations support                                                           5,220
Depreciation and amortization                                                2,728
General and administrative expenses                                          1,317
                                                                       --------------
    Total costs and expenses                                                 9,265
                                                                       --------------

Operating income                                                               181
Interest expense, net                                                       (1,005)
Other expense                                                                   (4)
                                                                       --------------
  Loss before income taxes                                                    (828)
Benefit from income taxes                                                     (319)
                                                                       --------------
Loss from discontinued operations                                      $      (509)
                                                                       ==============

Gain on disposition of discontinued operations, net of income tax      $     4,785
                                                                       ==============
</TABLE>


NET INCOME

As a result of the foregoing, for the three months ended September 30, 2001, net
income  was  $1.4  million,   resulting  in  basic  and  diluted   earnings  per
weighted-average common share outstanding of $0.19. For the same period of 2000,
net  income  was $5.0  million,  resulting  in basic and  diluted  earnings  per
weighted-average common share outstanding of $0.67 and $0.66, respectively.

COMPARISON  OF THE  COMPANY'S  OPERATING  RESULTS  FOR  THE  NINE  MONTHS  ENDED
SEPTEMBER 30, 2001 AND 2000

The following analysis reviews the operating results of the Company:

REVENUES
<TABLE>
<CAPTION>

                                                                                For the Nine Months
                                                                                Ended September 30,

                                                                       2001                          2000
                                                                     -----------------------------------------
                                                                                (in thousands of dollars)

<S>                                                                   <C>                     <C>
Operating lease income                                                $       695             $      1,101
Management fees                                                             4,362                    5,205
Partnership interests and other fees                                          847                    1,688
Acquisition and lease negotiation fees                                      2,032                      538
Other                                                                         834                      665
                                                                     -----------------------------------------
  Total revenues                                                      $     8,770             $      9,197
</TABLE>








The  fluctuations  in revenues  for the nine months  ended  September  30, 2001,
compared to the nine  months  ended  September  30,  2000,  are  summarized  and
explained below.

OPERATING LEASE INCOME BY TYPE:
<TABLE>
<CAPTION>
                                                                                For the Nine Months
                                                                                Ended September 30,

                                                                       2001                           2000
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)

<S>                                                                   <C>                     <C>
Lease income from assets held for sale                                $       347             $        744
Other                                                                         348                      357
                                                                     -----------------------------------------
  Total operating lease income                                        $       695             $      1,101
</TABLE>

Operating  lease  income  includes  revenues  generated  from  assets  held  for
operating  leases and assets  held for sale that are on lease.  Operating  lease
income  decreased  $0.4  million  during nine months ended  September  30, 2001,
compared to the nine months ended September 30, 2000 due to the following:

          1) Lease  income  from  assets held for sale  decreased  $0.4  million
          during the nine months ended  September  30, 2001 compared to the same
          period of 2000.  During the nine months ended  September 30, 2001, the
          Company owned $10.3 million in marine  containers on which the Company
          earned $0.3 million in operating lease income.  During the nine months
          ended  September  30, 2000,  the Company owned $14.0 million in marine
          containers on which the Company earned $0.7 million in operating lease
          income.

          2) Lease income from other  assets  decreased  $9,000  during the nine
          months ended  September  30, 2001  compared to the same period of 2000
          due to a decrease in the amount of other assets held for lease.

MANAGEMENT FEES:

Management fees are, for the most part, based on the gross revenues generated by
equipment under  management.  Management fees were $4.4 million and $5.2 million
for the nine  months  ended  September  30,  2001 and  2000,  respectively.  The
decrease in management fees resulted from a net decrease in managed equipment in
the PLM Equipment Growth Fund programs and Professional  Lease Management Income
Fund I, LLC. With the termination of syndication  activities in 1996, management
fees from the older  programs  are  decreasing  and are  expected to continue to
decrease as the programs liquidate their equipment portfolios.

PARTNERSHIP INTERESTS AND OTHER FEES:

The Company  records as  revenues  its equity  interest  in the  earnings of the
Company's  affiliated  programs.  The net earnings from the affiliated  programs
were $0.8 million and $1.5 million for the nine months ended  September 30, 2001
and 2000, respectively. The decrease in net earnings from affiliated programs in
2001,  compared to 2000, resulted from reduced gains on disposition of equipment
in the Growth Fund programs. A decrease of $0.2 million in other fees was due to
decreased  sales  commissions  in the nine  months  ended  September  30,  2001,
compared to the same period of 2000.

ACQUISITION AND LEASE NEGOTIATION FEES:

During the nine months ended  September 30, 2001, the Company,  on behalf of the
EGF programs,  purchased  transportation  and other  equipment for $8.0 million,
compared to first nine months of 2000 during  which the Company  purchased  $5.0
million of  transportation  and other equipment for these  programs.  Concurrent
with the final  settlement of the Koch and Romei matters in the third quarter of
2001 (see Note 7 to the unaudited condensed  consolidated financial statements),
the  Company  recognized  income  of  $1.8  million  of  acquisition  and  lease
negotiation fees. These fees were earned on equipment purchased in prior periods
for investment  programs that had reached the maximum allowable fees that may be
taken.  With the settlement of these lawsuits,  the amount of fees that could be
earned from these investment  programs was increased and the previously deferred
fees were taken into income.

OTHER REVENUE:

Other revenue increased $0.2 million in the nine months ended September 30, 2001
compared to the similar  period in 2000  primarily due in to an increase in data
processing fees earned from the investment programs.

COSTS AND EXPENSES
<TABLE>
<CAPTION>
                                                                                For the Nine Months
                                                                                Ended September 30,
                                                                       2001                         2000
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)
<S>                                                                   <C>                     <C>
Operations support                                                    $     1,092             $      1,850
Depreciation and amortization                                                 519                      643
General and administrative                                                  4,054                    4,391
                                                                     -----------------------------------------
  Total costs and expenses                                            $     5,665             $      6,884
</TABLE>

OPERATIONS SUPPORT:

Operations  support expense,  including salary and  office-related  expenses for
operational  activities,  decreased $0.8 million (41%) for the nine months ended
September 30, 2001,  compared to the nine months ended  September 30, 2000.  The
decrease  in  operations  support  expense  was  primarily  due to a decrease in
compensation and benefits expense resulting from staff reductions.

DEPRECIATION AND AMORTIZATION:

Depreciation and amortization  expense decreased $0.1 million (19%) for the nine
months ended September 30, 2001, compared to the nine months ended September 30,
2000.  The decrease  resulted from a decrease in the volume of other assets held
for operating lease.

GENERAL AND ADMINISTRATIVE:

General and administrative  expenses decreased $0.3 million (8%) during the nine
months ended September 30, 2001, compared to the nine months ended September 30,
2000.  The  reduction  resulted  from lower  compensation  costs due to staffing
reductions.  This decreases were offset by a $0.3 million expense related to the
exercise of stock  options in the nine months ended  September 30, 2001 and $0.3
million in expenses  related to the sale of the Company (as  discussed in Note 1
to the unaudited condensed  consolidated  financial  statements).  There were no
similar expenses in 2000.

OTHER INCOME AND EXPENSES
<TABLE>
<CAPTION>
                                                                                For the Nine Months
                                                                                Ended September 30,

                                                                       2001                         2000
                                                                     -----------------------------------------
                                                                                  (in thousands of dollars)

<S>                                                                   <C>                     <C>
Interest expense                                                      $        (4)            $     (1,424)
Interest income                                                               336                      869
Other expenses, net                                                           (62)                    (177)
</TABLE>

INTEREST EXPENSE:

Interest  expense  decreased  $1.4 million  (100%)  during the nine months ended
September 30, 2001, compared to the nine months ended September 30, 2000, due to
the Company's repayment of the senior secured notes in 2000.

INTEREST INCOME:

Interest  income  decreased  $0.5  million  (61%)  during the nine months  ended
September  30,  2001,  compared to the same period of 2000 due to lower  average
cash balances and lower  interest  rates earned on cash  investments  during the
nine months ended September 30, 2001 compared to the same period of 2000.

OTHER EXPENSES, NET:

Other  expenses in the nine months ended  September 30, 2001 and 2000  primarily
related to litigation costs.

PROVISION FOR INCOME TAXES:

For the nine months ended September 30, 2001, the provision for income taxes was
$1.3 million,  representing  an effective rate of 39%. For the nine months ended
September   30,  2000,   the  provision  for  income  taxes  was  $0.6  million,
representing an effective rate of 38%.

LOSS FROM DISCONTINUED OPERATIONS

On May 24,  2000,  the Company  signed an asset  purchase  agreement to sell its
refrigerated and dry trailer assets and related  liabilities.  PLMI shareholders
approved the transaction on August 25, 2000. The sale was completed on September
30, 2000.

In October  1999,  the  Company  agreed to sell its  commercial  and  industrial
equipment  subsidiary,  American  Finance Group,  Inc. On February 25, 2000, the
shareholders of the Company approved the transaction.  The sale was completed on
March 1, 2000.

Accordingly, the Company's trailer leasing and commercial and industrial leasing
operations  are  accounted  for  as  discontinued  operations.   The  loss  from
discontinued  operations and the gain on disposition of discontinued  operations
for the nine months  ended  September  30, 2000 are as follows (in  thousands of
dollars):
<TABLE>
<CAPTION>

                                                                                           2000
                                                                          ----------------------------------------
                                                                             Trailer
                                                                             Leasing        AFG          Total
                                                                          ---------------------------------------
<S>                                                                       <C>          <C>          <C>
REVENUES
Operating lease income                                                    $    24,312  $   1,841    $   26,153
Finance lease income                                                               --      1,650         1,650
Management fees                                                                   550        100           650
Gain (loss) on disposition of assets, net                                         (39)        40             1
Other                                                                              46        445           491
                                                                          ---------------------------------------
  Total revenues                                                               24,869      4,076        28,945
                                                                          ---------------------------------------

COSTS AND EXPENSES
Operations support                                                             11,996        766        12,762
Depreciation and amortization                                                   7,622      1,505         9,127
General and administrative expenses                                             2,193         --         2,193
                                                                          ---------------------------------------
  Total costs and expenses                                                     21,811      2,271        24,082
                                                                          ---------------------------------------

Operating income                                                                3,058      1,805         4,863
Interest expense, net                                                          (3,148)    (1,655)       (4,803)
Other expense                                                                      (4)        --            (4)
                                                                          ---------------------------------------
Income (loss) from discontinued operations
  Before income taxes                                                             (94)       150            56
Provision for (benefit from) income tax                                           (37)        57            20
Income previously accrued as a component
  Of loss on a discontinued operation                                              --       (200)         (200)
                                                                          ---------------------------------------
Loss from discontinued operations                                         $       (57) $    (107)   $     (164)
                                                                          =======================================

Gain on disposition of discontinued operations, net of income tax         $     4,785  $      --    $    4,785
                                                                          =======================================
</TABLE>







NET INCOME

As a result of the foregoing,  for the nine months ended September 30, 2001, net
income  was  $2.1  million,   resulting  in  basic  and  diluted   earnings  per
weighted-average common share outstanding of $0.27. For the same period of 2000,
net  income  was $5.6  million,  resulting  in basic and  diluted  earnings  per
weighted-average common share outstanding of $0.74.

LIQUIDITY AND CAPITAL RESOURCES

Cash  requirements  have  historically  been  satisfied  through  cash flow from
operations,  borrowings,  and proceeds  from the sale of equipment  and business
segments.

During the nine months ended September 30, 2001, accounts  receivable  decreased
$0.9  million.  This decrease was  primarily  caused by the  collection of lease
receivables from assets held for sale outstanding at December 31, 2000.

During the nine months ended  September 30, 2001,  receivables  from  affiliates
decreased  $0.3 million  resulting  from lower  management  fees earned from the
affiliated programs.

During the nine months ended  September 30, 2001,  equity interest in affiliates
decreased   $0.6  million  due  to  the  Company   receiving   $1.4  million  in
distributions  from the  affiliated  programs  during the period.  The  decrease
caused by these  distributions  was partially offset by income earned from these
programs of $0.8 million.

As of December 31, 2000, the Company had $10.3 million in marine containers that
were reported as assets held for sale. During the first nine months of 2001, the
Company sold these  marine  containers  to  affiliated  programs at cost,  which
approximated  their fair market value. As of September 30, 2001, the Company had
no assets held for sale.

During the nine months ended September 30, 2001,  restricted cash decreased $2.5
million.  The  Company's  agreement to be purchased by MILPI  Acquisition  Corp.
required the Company to place $1.7 million into an escrow account as of December
31, 2000.  Concurrent  with the conclusion of the tender offer in February 2001,
the $1.7 million in  restricted  cash held in an escrow  account was released to
the Company.  Restricted cash as of December 31, 2000 also included $0.8 million
related to the Company's obligations under the deferred compensation agreements.
These deferred  compensation  obligations were paid during the first nine months
of 2001  and the  cash  held as  restricted  related  to  these  agreements  was
released.

During the nine months ended  September 30, 2001,  other assets  decreased  $1.0
million.  A $0.7  million  decrease was due to the decrease in net book value of
other assets held for lease due to asset sales and  depreciation  being recorded
on these  assets.  A decrease of $0.4  million was due to a reduction in prepaid
insurance  and prepaid rent. A decrease of $0.1 million was due to a decrease in
the net book value of furniture and other equipment due to depreciation on these
assets and asset disposals. These decreases were partially offset by an increase
of $0.2 million in the book value of the cash surrender  value of officer's life
insurance policies primarily resulting from dividends on these policies.

During the nine months ended  September 30, 2001,  accounts  payable and accrued
expenses decreased $9.8 million. $4.7 million of this decrease was the result of
a  reduction  in the  current  federal  and state  income tax payable due to tax
payments made in 2001. A $3.6 million  decrease in accrued  compensation was due
to the payment of deferred  compensation,  profit  sharing,  and bonuses in 2001
that were  accrued at December  31,  2000.  Accounts  payable and other  accrued
liabilities decreased $1.4 million due to the payment of a litigation settlement
that had been accrued at December 31, 2000 and the timing of payments.








DEBT FINANCING:

Warehouse Credit Facility: In April 2001, the Company entered into a joint $15.0
million  credit  facility  on behalf  of  Acquisub  LLC  (ACQ),  a  wholly-owned
subsidiary of the Company,  PLM Equipment Growth Fund VI (EGF VI), PLM Equipment
Growth and Income Fund VII (EGF VII), and Professional  Lease Management  Income
Fund I (Fund  I),  each  affiliated  investment  programs  of the  Company.  The
facility provides interim financing of up to 100% of the aggregate book value of
eligible equipment as defined in the credit agreement.  The Company, EGF VI, EGF
VII,  and Fund I,  collectively  may  borrow  up to  $15.0  million  under  this
facility.  Outstanding borrowings by one borrower reduce the amount available to
each of the other  borrowers  under the facility.  Individual  borrowings may be
outstanding for no more than 270 days, with all advances due no later than April
12, 2002.  Interest accrues at either the prime rate or adjusted LIBOR plus 2.00
%, at the borrower's  option, and is set at the time of an advance of funds. The
Company guarantees all borrowings. As of September 30, 2001 and November 8, 2001
there  were  no  borrowings  outstanding  under  this  facility  by  any  of the
borrowers.

The Company is currently in discussions with the lenders of the warehouse credit
facility to lower the amount  available to be borrowed  under the facility  from
$15.0 million to $10.0 million.


Management believes that, through debt financing and cash flows from operations,
the Company will have  sufficient  liquidity  and capital  resources to meet its
projected future operating needs over the next twelve months.

FORWARD-LOOKING INFORMATION:

Except for historical  information contained herein, the discussion in this Form
10-Q contains  forward-looking  statements that contain risks and uncertainties,
such  as  statements  of the  Company's  plans,  objectives,  expectations,  and
intentions.  The cautionary  statements made in this Form 10-Q should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q.  The Company's  actual results could differ  materially  from
those discussed here.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.











                      This space intentionally left blank.


<PAGE>



                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings

See Note 7 to the unaudited condensed consolidated financial statements.


Item 6. Exhibits and Reports on Form 8-K

(A) Exhibits

None.

(B) Reports on Form 8-K

Report dated  September 5, 2001  announcing  the engagement of Deloitte & Touche
LLP as the Company's auditors and the dismissal of KPMG LLP.


<PAGE>




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                             PLM INTERNATIONAL, INC.



                             /s/ Stephen M. Bess
                             ---------------------------------------------------
                             Stephen M. Bess
                             Chief Executive Officer and Current Chief
                             Accounting Officer






Date: November 8, 2001