PLAN OF DISSOLUTION AND LIQUIDATION

     This  Plan of Dissolution and Liquidation (this "Plan"), is entered into as
of  December  31, 2002, by and among PLM Equipment Growth Fund III, a California
limited  partnership  (the  "Partnership"),  and PLM Financial Services, Inc., a
Delaware  corporation  (the  "General  Partner").

                                 R E C I T A L S
                                 - - - - - - - -

WHEREAS,  the  Partnership  and the General Partner among others, are parties to
that certain Second Amended and Restated Agreement of Limited Partnership, dated
as  of  March  10,  1988,  as  amended  (the  "Partnership  Agreement");  and

     WHEREAS,  the  Partnership  Agreement  provides  that  the  Partnership  be
dissolved upon the expiration of the term of the Partnership and such expiration
has  occurred;  and

WHEREAS,  the Partnership filed a Certificate of Dissolution with the California
Secretary  of  State  on  December  22,  2000;  and

WHEREAS,  the  General Partner has determined that it is in the best interest of
the  Partnership  to complete the dissolution and liquidation of the Partnership
pursuant  to  the  adoption  of  this  Plan;  and

     WHEREAS,  in  furtherance  hereof, the General Partner shall (i)  apply and
distribute  all cash and proceeds in accordance with the provisions set forth in
the Partnership Agreement; (ii) except for an allocation of reasonable estimates
of  cash  amounts  to  be used for contingent or existing liabilities (the "Cash
Reserve"),  liquidate  the  Partnership's  assets; (iii) place all undistributed
cash,  including the Cash Reserve and any assets that could not be sold for cash
prior  to  dissolution  in a liquidating trust (the "Liquidating Trust") for the
benefit  of  the  limited  partnership  and  general  partner unitholders of the
Partnership  (the  "Unitholders")  with  the General Partner as its trustee (the
"Trustee");  and  (iv)  cause  the Liquidating Trust, pursuant to the terms of a
Liquidating  Trust  Agreement  by  and  between  the Partnership and the General
Partner,  of  even date herewith substantially in the form attached as Exhibit A
                                                                       ---------
hereto  (the  "Liquidating  Trust Agreement"), to distribute all of the net cash
proceeds  from  the  sale  of  assets  of  the  Liquidating Trust and cash, less
reserves for any contingent liabilities, to the beneficiaries of the Liquidating
Trust when the Trustee deems it to be in the best interest of the withholders to
do  so;  and

     WHEREAS,  pursuant  to  the  terms  of  the Liquidating Trust Agreement the
Unitholders  in  the  Partnership  shall be deemed to be pro rata holders of the
beneficial  interests  in  the  Liquidating  Trust;  and

WHEREAS, in furtherance of the dissolution and liquidation of the Partnership as
described  herein,  the  General  Partner  has  adopted  and approved this Plan;

     NOW  THEREFORE,  the  General Partner authorizes the following on behalf of
the  Partnership:

1.     The  Partnership  shall  enter  into, execute and deliver the Liquidating
Trust  Agreement  with  the  Trustee.

2.     The  Partnership  shall,  after  having  set  aside  the Cash Reserve and
reserving  additional  cash  to  be  transferred  to  the  Liquidating Trust for
estimated  fees,  expenses  and  contingent liabilities of the Liquidating Trust
together  with  any  remaining  unsold  assets of the Partnership (the "Retained
Assets"), in accordance with the Partnership Agreement, distribute all available
cash  to  the  Partnership's  Unitholders.

3.     The  Partnership  shall  enter into, execute and deliver to the Trustee a
Bill  of  Sale, Assignment, Acceptance and Assumption Agreement, a form of which
is  attached  hereto  as  Exhibit  B  (the "Bill of Sale"), which, together with
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related  transfer  instruments,  shall  transfer  and  assign to the Trustee, on
behalf  of  the  Liquidating  Trust,  all  right, title, interest in and to, and
obligations  related  to,  all  assets,  including,  but not limited to the Cash
Reserves, the Retained Assets, and any other assets held by the Partnership that
have  not  been,  as of the date of such Bill of Sale, distributed.  Such assets
shall  be  reserved, liquidated or distributed by the Trustee in accordance with
the  terms  of  the  Liquidating  Trust  Agreement.

4.     After  dissolution  and  liquidation,  in accordance with the Partnership
Agreement  and  pursuant  to  the  California Revised Limited Partnership Act as
adopted  by  and in effect in the State of California, the General Partner shall
cause  the  Partnership  to  file  with  the  Secretary of State of the State of
California,  a  Certificate  of  Cancellation,  which  cancels the Partnership's
Certificate  of  Limited  Partnership.

5.     The General Partner shall take any and all other actions deemed required,
necessary  or  desirable  to  complete  the  liquidation  and dissolution of the
Partnership, including but not limited to, the execution and delivery of any and
all  agreements,  certificates,  instruments  or  other  documents.

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     IN  WITNESS  WHEREOF,  the parties hereto have executed this Plan as of the
date  first  set  forth  above.


     PLM  EQUIPMENT  GROWTH  FUND  III
     By:  PLM  Financial  Services,  Inc.,
          its  General  Partner


     By:  ____________________________
     Name:  Richard  K  Brock
     Title:  Chief  Financial  Officer


     PLM  FINANCIAL  SERVICES,  INC.


     By:  ______________________________
     Name:  Richard  K  Brock
     Title:  Chief  Financial  Officer