SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-QSB

(Mark One)
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 For the quarterly period ended September 30, 2000

[   ]    Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934  For the transition period from                 to
                                           ----------------    ----------------

Commission File Number:  33-84336-LA


                                  JetFleet III
                  (Name of small business issuer in its charter)

        California                                      94-3208983
(State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation or organization)

 1440 Chapin Avenue, Suite 310
 Burlingame, California                                     94010
(Address of principal executive offices)                  (Zip Code)

Issuer's telephone number, including area code:         (650) 340-1880
Securities registered pursuant to Section 12(b) of the Act:          None

Securities registered pursuant to Section 12(g) of the Act:          None


Check whether the Issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 90 days.
Yes  X   No
    ---     ---

On November  15, 2000 the  aggregate  market  value of the voting and non voting
Common  equity held by  non-affiliates  (computed  by  reference to the price at
which the common equity was sold) was $0.


As of  November  15,  2000 the Issuer  has  815,200  Shares of Common  Stock and
195,465 Shares of Series A Preferred Stock outstanding.


Transitional Small Business Disclosure Format (check one):  Yes       No  X
                                                               -------  ------


<PAGE>



Part I.           Financial Information

Item 1.           Financial Statements.
<TABLE>

                                  JETFLEET III
                                  Balance Sheet
                               September 30, 2000
<CAPTION>

                                     ASSETS
<S>                                                                                          <C>
Current assets:
     Cash                                                                                    $   1,409,690
     Deposits                                                                                    1,303,980
     Accounts receivable                                                                           181,640
     Rent receivable                                                                                 6,670
                                                                                             -------------
Total current assets                                                                             2,901,980

Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $2,255,860                                              11,246,430
Debt issue costs, net of accumulated
     amortization of $956,540                                                                      704,910
Deferred taxes                                                                                     223,920
Prepaid expenses                                                                                     4,080
                                                                                             -------------

Total assets                                                                                 $  15,081,320
                                                                                             =============
</TABLE>

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<S>                                                                                          <C>
Current liabilities:
     Accounts payable                                                                        $     280,470
     Interest payable                                                                              152,120
     Prepaid rents                                                                                  83,180
     Security deposits                                                                             155,960
     Maintenance deposits                                                                        1,260,330
     Taxes payable                                                                                 (4,370)
                                                                                             -------------
Total current liabilities                                                                        1,927,690

Medium-term secured bonds                                                                       11,076,350
                                                                                             -------------

Total liabilities                                                                               13,004,040
                                                                                             -------------

Preferred stock, no par value,
     300,000 shares authorized, 195,465
     issued and outstanding                                                                      1,661,450
Common stock, no par value,
     1,000,000 shares authorized, 815,200
     issued and outstanding                                                                        815,200
Accumulated deficit                                                                              (399,370)
                                                                                             -------------
Total shareholders' equity                                                                       2,077,280
                                                                                             -------------

Total liabilities and shareholders' equity                                                   $  15,081,320
                                                                                             =============


See accompanying notes.
</TABLE>
<PAGE>


                                  JETFLEET III
                            Statements of Operations

<TABLE>
<CAPTION>

                                          For the Nine Months Ended               For the Three Months Ended
                                                 September 30,                           September 30,
<S>                                     <C>               <C>                   <C>              <C>

                                              2000            1999                   2000              1999
                                              ----            ----                   ----              ----
Revenues:

     Rent income                        $   1,703,390     $   1,503,220         $     567,250    $     552,230
     Gain on sale of aircraft                       -            12,900                     -                -
     Interest income                           93,760            83,670                38,490           25,370
                                        -------------     -------------         -------------    -------------

                                            1,797,150         1,599,790               605,740          577,600
                                        -------------     -------------         -------------    -------------


Expenses:

     Depreciation                             479,140           420,010               162,710          146,220
     Provision for impairment in
       value of aircraft                      150,700                 -               150,700                -
     Amortization                             171,470           171,470                57,160           57,160
     Interest                                 684,520           684,520               228,170          228,170
     Maintenance                              140,730                 -               112,140                -
     Professional fees and
        general and administrative             77,660            60,610                47,500           27,640
     Management fees                          146,600           146,600                48,860           48,860
                                        -------------     -------------         -------------    -------------

                                            1,850,820         1,483,210               807,240          508,050
                                        -------------     -------------         -------------    -------------

Loss/(income) before taxes                   (53,670)           116,580             (201,500)           69,550

Tax (benefit)/provision                      (20,650)             2,880              (70,220)            1,960
                                        -------------     -------------         -------------    -------------

Net (loss)/income                       $    (33,020)     $     113,700         $   (131,280)    $      67,590
                                        =============     =============         =============    =============

Weighted average common
     shares outstanding                       815,200           815,200               815,200          815,200
                                        =============     =============         =============    =============

Basic (loss/)earnings per common share  $      (0.04)     $        0.14         $      (0.16)    $        0.08
                                        =============     =============         =============    =============


See accompanying notes.
</TABLE>





<PAGE>



                                  JETFLEET III
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                         For the Nine Months
                                                                           Ended September 30,
<S>                                                               <C>                   <C>

                                                                       2000                  1999
                                                                       ----                  ----

Net cash provided by operating activities                         $      978,200        $     726,980

Investing activities:
     Purchase of interests in aircraft                                 (456,750)          (2,800,050)
     Proceeds from sale of aircraft                                            -            1,074,970
                                                                  --------------        -------------
Net cash used by investing activities:                                 (456,750)          (1,725,080)

Net increase/(decrease) in cash                                          521,450            (998,100)

Cash, beginning of period                                                888,240            1,639,760
                                                                  --------------        -------------

Cash, end of period                                               $    1,409,690        $     641,660
                                                                  ==============        =============

Supplemental disclosures of cash flow information:
Cash paid during the period for:                                            2000                 1999
                                                                            ----                 ----
     Interest                                                     $      684,520        $     694,520
     Income taxes                                                         21,400                  920


See accompanying notes.
</TABLE>


<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies

         Basis of Presentation

         JetFleet  III  (the  "Company")  was   incorporated  in  the  state  of
California on August 23, 1994  ("Inception").  The Company was formed solely for
the purpose of acquiring  Income  Producing  Assets.  The Company  offered up to
$20,000,000  in $1,000  Series A Units (the  "Offering")  consisting  of $850 of
bonds  maturing on November 1, 2003 (the  "Bonds") and $150 of  preferred  stock
(the "Preferred  Stock")  pursuant to a prospectus dated September 27, 1995 (the
"Prospectus").

         All of the  Company's  outstanding  common  stock is owned by  JetFleet
Holding Corp.  ("JHC"), a California  corporation formed in January 1994. In May
1998, JetFleet Management Corp., the sole shareholder of the Company was renamed
JetFleet Holding Corp. The rights and obligations under the management agreement
between  the  Company  and  JHC  were  assigned  by  JHC  to  its  newly-created
wholly-owned  subsidiary  named "JetFleet  Management  Corp." ("JMC").  JMC also
manages AeroCentury Corp., a Delaware  corporation,  and AeroCentury IV, Inc., a
California  corporation,  which are affiliates of JHC and which have  objectives
similar to the Company's.  Neal D. Crispin, the President of the Company,  holds
the same position  with JHC and JMC and owns a significant  amount of the common
stock of JHC.

         Cash and Cash Equivalents/Deposits

         The Company  considers highly liquid  investments  readily  convertible
into known amounts of cash, with original maturities of 90 days or less, as cash
equivalents.  Deposits  represent  cash  balances  held  related to  maintenance
reserves  and  security   deposits  and  generally  are  subject  to  withdrawal
restrictions. As of September 30, 2000, the Company maintained $2,670,580 of its
cash balances in two money market funds held by regional  brokerage firms, which
are not federally insured.

         Aircraft and Aircraft Engines Under Operating Leases

         The Company's interests in aircraft are recorded at cost, which include
acquisition costs (see Note 2). Depreciation is computed using the straight-line
method over each aircraft's  estimated  economic life to its estimated  residual
value.

         Organization and Offering Costs

         Pursuant  to  the  terms  of  the  Prospectus,   the  Company  paid  an
Organization and Offering  Expense  Reimbursement to JHC in cash in an amount up
to 2.0% of Aggregate Gross Offering  Proceeds for reimbursement of certain costs
incurred in  connection  with the  organization  of the Company and the Offering
(the "Reimbursement").

         JHC  contributed  $450,000  of the total it paid for  organization  and
offering  expenses as a common stock  investment  in the Company  (the  "Initial
Contribution").  The Company  issued  450,000  shares of common  stock to JHC in
return for the Initial Contribution. To the extent that JHC incurred expenses in
excess of the 2.0% cash limit,  such excess  expenses  were repaid to JHC in the
form of Common  Stock  issued by the  Company at a price of $1.00 per share (the
"Excess Stock").  The amount of Excess Stock that the Company issued was limited
according  to the amount of  Aggregate  Gross  Offering  Proceeds  raised by the
Company.

         The Company capitalized the portions of both the Reimbursement paid and
the Initial  Contribution  related to the Bonds (85%) and  amortizes  such costs
over the life of the Bonds  (approximately eight years). The remainder of any of
the  Initial  Contribution  and  Reimbursement  is deducted  from  shareholders'
equity.



<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies (continued)

         Assets Subject to Lien

         The  Company's  obligations  under the Bonds are  secured by a security
interest  in all of the  Company's  right,  title  and  interest  in the  Income
Producing Assets acquired by the Company.

         Income Taxes

         The Company follows the liability method of accounting for income taxes
as required by the provisions of Statement of Financial Accounting Standards No.
109 - Accounting for Income Taxes.

         Use of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain  reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates.

2.       Aircraft and Aircraft Engines Under Operating Leases

         Aircraft and Aircraft Engines

         The Company owns a deHavilland DHC-8-100,  serial number 13 ("S/N 13"),
a Pratt & Whitney JT8D-9A aircraft engine,  serial number 674267 ("S/N 674267"),
three  deHavilland  DHC-6-300  aircraft  ("S/Ns 646, 751 and 696"),  a Fairchild
Metro III  SA-227-AC,  serial number  AC-621 ("S/N  AC-621"),  a Shorts  SD3-60,
serial  number S/N 3656  ("S/N  3656"),  a 50%  undivided  interest  in a Shorts
SD3-60,  serial  number S/N 3676 ("S/N  3676"),  a 33% interest in a deHavilland
DHC-6,  serial  number 668 ("S/N 668") and a Saab 340A,  serial  number 24 ("S/N
24"). The Company did not purchase any aircraft  during the first nine months of
2000, but did  capitalize a total of $456,750 of equipment  added to S/N 696 and
S/N 668.

         S/N 13 was re-leased in June 2000 to the same sub-lessee, an Australian
carrier, for a one-year term.

         S/N  674267 is used on a  McDonnell  Douglas  DC-9 and is  subject to a
60-month  sublease,  expiring in November 2001, between the seller and a Mexican
based regional carrier.

         S/Ns 646 and 751 are subject to similar  36-month  leases,  expiring in
July 2001, with a U.S. regional carrier.  During the second quarter of 2000, the
Company and the lessee for S/N 696, which had been leased to the same carrier as
S/Ns 646 and 751,  agreed to an early  termination of the lease for S/N 696. S/N
696 was returned by the lessee and, after  undergoing  certain  maintenance  and
upgrade work,  was re-leased to a regional  carrier in the United  Kingdom for a
term expiring in April 2003.

         S/N  AC-621 was leased to a  regional  carrier in North  America  for a
six-month term,  expiring in April 2000. The lessee extended the lease to August
2000 and,  subsequently,  to October 2000. S/N AC-621 was returned by the lessee
and,  during  November,  the Company sold the aircraft and  recognized a gain of
approximately $173,000 in connection with the sale.




<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

2.       Aircraft and Aircraft Engines Under Operating Leases (continued)

         Aircraft and Aircraft Engines Leases (continued)

         At the time of purchase,  S/N 3656 and S/N 3676 were subject to similar
48-month  leases,  expiring in July 2001, with a British regional  airline.  The
original  lease,  entered  into in 1997,  did not  require  that the  lessee pay
maintenance  reserves  based on usage  because,  at the  time,  the  lessee  was
considered  creditworthy and had its own facility which was certified to perform
any  required   maintenance.   On  February  24,  2000,  the  lessee  filed  for
reorganization.   The  lessee  has   continued  to  operate,   and,   under  the
reorganization  plan,  the lessee is  continuing to lease S/N 3676, in which the
Company owns a 50% interest, on a month-to-month basis at the same rent as under
the original lease.  The lessee also began paying monthly  maintenance  reserves
based on the hours flown.  Under  British law,  the owners were  precluded  from
repossessing the aircraft so long as the lessee was operating it and paying rent
and  maintenance  reserves  under its  reorganization  plan.  The  owners of the
aircraft  now  believe  that S/N 3676 will be returned by the lessee by year-end
2000 and that  collection on any claim for the  maintenance  related to usage by
the lessee  prior to the  reorganization  date but not  required to be performed
until after the  reorganization  date is doubtful.  The owners believe that they
will  realize a greater  benefit if they sell the  aircraft  "as is" rather than
fund the maintenance  work necessary to return the aircraft to a condition which
would  allow  it  to  possibly  be  re-leased  to a  new  lessee.  Because  such
maintenance  will likely not be performed,  the Company  believes that there has
been an  impairment  of the asset.  The  Company  has,  therefore,  reduced  the
carrying  value of the  aircraft  from  $425,700 to $275,000  and  recognized  a
provision for  impairment  estimated to be $150,700 at September 30, 2000.  (See
also Note 6, Subsequent Events.)

         During  May  2000,  S/N  3656  was  re-leased  to a  regional  airline,
headquartered in Ireland, for a three-year term expiring in May 2003.

         S/N 668, in which the  Company  owns a 33%  interest,  was subject to a
60-month  lease,  expiring in July 2004,  with a regional  carrier in  Colombia.
During the third quarter of 2000, due to non-payment of rent and reserves by the
lessee, the Company notified the lessee of its intent to repossess the aircraft.
The Company  recorded a write-off of $45,860 of rent receivable which amount was
net of the  security  deposit  held by the  Company,  and reduced  its  reserves
receivable  and  related  liability  by  $60,390.  During  November,  the owners
repossessed S/N 668. At September 30, 2000, the Company has also accrued $66,000
of estimated maintenance related to usage by the lessee. The owners believe that
there are limited re-lease  opportunities for this type of aircraft.  Therefore,
in November 2000, the owners signed a non-binding term sheet for the sale of the
aircraft to be  consummated  on November 30, 2000 which,  if  successful,  would
allow the Company to realize a gain on the sale of approximately  $35,000.  (See
also Note 6, Subsequent Events.)

         S/N 24 is subject to a lease, expiring in October 2002, with a regional
carrier in North America.

3.       Medium-Term Secured Bonds

         The Company raised $13,031,000  through the Offering from November 1995
to June 1997.  Each  $1,000 Unit  subscribed  in the  offering  included an $850
medium-term  secured bond maturing on November 1, 2003.  The Bonds bore interest
at an annual rate of 12.94% through October 31, 1998 and, thereafter, a variable
rate,  adjusted  annually  on November 1, equal to the  one-year  United  States
Treasury  bill rate  plus 2%,  but not less than  8.24%.  Based on the  one-year
Treasury  bill rate on October 31, 1998 and  October  31,  1999,  the Bonds bear
interest at the rate of 8.24% per annum for the periods November 1, 1998 through
October 31, 1999 and November 1, 1999 through October 31, 2000.  Interest is due
and  payable on a quarterly  basis,  in arrears,  on the first  business  day of
February,   May,  August  and  November.   The  carrying  amount  of  the  Bonds
approximates fair value.



<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

4.       Income Taxes

         The items comprising income tax expense are as follows:
<TABLE>
<CAPTION>

                                                                                     For the Nine Months Ended
                                                                                            September 30,
<S>                                                                                 <C>              <C>

                                                                                           2000           1999
                                                                                           ----           ----
         Current tax provision
              Federal                                                               $           -    $            -
              State                                                                         8,820             2,880
                                                                                    -------------    --------------
              Current provision                                                             8,820             2,880
                                                                                    -------------    --------------

         Deferred tax provision
              Federal                                                                    (23,270)            39,050
              State                                                                       (6,200)            33,790
                                                                                    -------------    --------------
              Deferred tax provision                                                     (29,470)            72,840
              Change in valuation allowance                                                     -          (72,840)
                                                                                    -------------    --------------
                  Subtotal                                                               (29,470)                 -
                                                                                    -------------    --------------

         Total provision for income taxes                                           $    (20,650)    $        2,880
                                                                                    =============    ==============
</TABLE>

         The total  provision  for income  taxes  differs  from the amount which
would be provided by applying the  statutory  federal  income tax rate to pretax
earnings as illustrated below:
<TABLE>
<S>                                                                                 <C>              <C>
         Income tax expense at statutory federal income tax rate                    $    (18,250)    $       39,630
         State taxes net of federal benefit                                               (1,020)             1,650
         State franchise taxes                                                                  -             2,880
         Tax rate differences                                                             (1,380)            31,560
         Change in valuation allowance                                                          -          (72,840)
                                                                                    -------------    --------------
         Total provision for income taxes                                           $    (20,650)    $        2,880
                                                                                    =============    ==============
</TABLE>

         Temporary   differences  and   carryforwards   which  gave  rise  to  a
significant  portion of deferred tax assets and  liabilities as of September 30,
2000 are as follows:
<TABLE>
<S>                                                                                 <C>
         Deferred tax assets:
              Net operating loss                                                    $     232,730
              Maintenance deposits                                                        409,360
              Prepaid rent                                                                 29,860
              State franchise taxes                                                           270
              Amortization of organization costs                                               40
                                                                                    -------------
                  Subtotal                                                                672,260
                  Valuation allowance                                                           -
                                                                                    -------------
                  Net deferred tax assets                                                 672,030
         Deferred tax liability -
              Depreciation of aircraft                                                  (448,340)
                                                                                    -------------
                                                                                    $     223,920
                                                                                    =============
</TABLE>

         The Company  anticipates  generating  adequate future taxable income to
realize the benefits of the remaining  deferred tax assets on the balance sheet.
The Company's net operating  losses may be carried forward for fifteen or twenty
years, depending on when they were created, and begin to expire in 2009.
<PAGE>

                                  JETFLEET III
                          Notes to Financial Statements

5.       Related Party Transactions

         The  Company's   Income   Producing  Asset  portfolio  is  managed  and
administered  under the terms of a  management  agreement  with JMC.  Under this
agreement,  on the last day of each calendar  quarter,  JMC receives a quarterly
management  fee  equal to  0.375%  of the  Company's  Aggregate  Gross  Proceeds
received through the last day of such quarter.  In the first nine months of 2000
and 1999,  the Company paid a total of $146,600 and $146,600,  respectively,  in
management fees to JMC.

         JMC may receive an acquisition  fee for locating assets for the Company
and a  remarketing  fee in  connection  with the sale of the  Company's  assets,
provided  that  such fees are not more than the  customary  and usual  fees that
would be paid to an unaffiliated party for such a transaction.  The total of the
Aggregate  Purchase Price plus the acquisition fee cannot exceed the fair market
value of the asset based on  appraisal.  JMC may also receive  reimbursement  of
Chargeable  Acquisition Expenses incurred in connection with a transaction which
are payable to third  parties.  Because the  Company did not  purchase  aircraft
during the first nine  months of 2000,  it did not pay any  acquisition  fees or
Chargeable  Acquisitions  Expenses to JMC. During the first nine months of 1999,
the Company paid JMC a total of $112,870 in acquisition fees.

         As discussed in Note 1, the Company  reimbursed  JHC for certain  costs
incurred in connection  with the  organization  of the Company and the Offering.
The Company made no such payments during the first nine months of 2000 or 1999.

6.       Subsequent Events

         During November 2000, the Company sold S/N AC-621 and recognized a gain
of  approximately  $173,000 in connection  with the sale. The Company intends to
use the sales  proceeds  along with excess  cash flow to purchase an  additional
income-producing asset.

         At the time of  purchase in July 1997,  S/N 3676,  in which the Company
owns a 50%  interest,  was under a lease with a British  regional  airline.  The
original  lease,  entered  into in 1997,  did not  require  that the  lessee pay
maintenance  reserves  based on usage  because,  at the  time,  the  lessee  was
considered  creditworthy and had its own facility which was certified to perform
any required maintenance. In February 2000, the lessee filed for reorganization.
The lessee has continued to operate,  and,  under the  reorganization  plan, the
lessee has  continued  to lease S/N 3676 on a  month-to-month  basis at the same
rent as  under  the  original  lease.  The  lessee  also  began  paying  monthly
maintenance  reserves  based on the hours flown.  Under  British law, the owners
were  precluded  from  repossessing  the  aircraft  so  long as the  lessee  was
operating it and paying rent and maintenance  reserves under its  reorganization
plan.  The owners of the  aircraft now believe that S/N 3676 will be returned by
the lessee by year-end 2000 and that collection on any claim for the maintenance
related to usage by the lessee prior to the reorganization date but not required
to be performed  until after the  reorganization  date is  doubtful.  The owners
believe that they will  realize a greater  benefit if they sell the aircraft "as
is" rather than fund the maintenance  work necessary to return the aircraft to a
condition which would allow it to possibly be re-leased to a new lessee. Because
such maintenance  will likely not be performed,  the Company believes that there
has been an impairment  of the asset.  The Company has,  therefore,  reduced the
carrying  value of the  aircraft  from  $425,700 to $275,000  and  recognized  a
provision for impairment  estimated to be $150,700 at September 30, 2000. If, as
the Company  anticipates,  it is unable to collect a substantial  portion of its
claim in bankruptcy for unfunded  maintenance  requirements,  this  possibility,
along with the asset impairment for S/N 3676 recognized during the third quarter
of 2000, may have an adverse affect upon the Company's ability to repay its Bond
indebtedness in full at maturity.


<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements

6.       Subsequent Events (continued)

         The  Company  owns a 33%  interest  in S/N 668.  Over the last  several
months,  the owners of the aircraft  have tried to work out a payment plan under
which the lessee of S/N 668, a Colombian regional carrier, could continue to use
the aircraft  while paying  reduced rent and deferring  the shortfall  until the
lessee became more profitable.  The owners attempted to perfect a first priority
secured  interest in real estate owned by the lessee,  the estimated fair market
value  of  which  approximated  the  monies  owed  the  owners.  However,  after
protracted negotiations,  the lessee failed to sign the necessary documents, and
the owners began repossession efforts which were completed in November 2000. The
owners believe that there are limited  re-lease  opportunities  for this type of
aircraft.  Therefore,  in November  2000,  the owners signed a non-binding  term
sheet for the sale of the aircraft to be consummated on November 30, 2000 which,
if  successful,  would  allow  the  Company  to  realize  a gain on the  sale of
approximately  $35,000.  The proceeds of such sale would then be used along with
the proceeds  from the sale of S/N AC-621  noted  above,  along with excess cash
flow, to purchase an additional income-producing asset.



<PAGE>




Item 2.  Management's Discussion and Analysis or Plan of Operation

Forward-Looking Statements

Certain statements  contained in this report and, in particular,  the discussion
regarding the Company's beliefs, plans, objectives,  expectations and intentions
regarding  the  return  of  S/N  3676,   collection   of  unfunded   maintenance
requirements  for S/N 3676,  realization  of a greater  benefit from sale of S/N
3676 rather than re-leasing to a new lessee, the limited re-lease  opportunities
for S/N  668,  the  possible  sale of S/N 668 and use of  proceeds  to  purchase
assets,  the effect of the  impairment of S/N 3676 on the  Company's  ability to
repay its indebtedness,  the Company's lack of significant operating expenses in
connection  with  assets  that remain on lease,  the  adequacy of the  Company's
reserves  to  meet  its  immediate  cash  requirements,   recovery  of  unfunded
maintenance  requirements  from the Company's lessee under  reorganization,  and
generation  of future  taxable  income to realize the benefits of the  remaining
deferred tax assets on the balance sheet are forward looking  statements.  While
the Company  believes  that such  statements  are accurate,  actual  results may
differ due to further  defaults or terminations  by lessees,  failure to recover
fully on claims against defaulting  lessees,  availability of appropriate assets
for acquisition, and general economic conditions, particularly those that affect
the demand  for  turboprop  aircraft  and  engines,  including  competition  for
turboprop  and other  aircraft,  and future  trends and  results  that cannot be
predicted with certainty.  The Company's actual results could differ  materially
from those  discussed in such  forward  looking  statements.  Factors that could
cause or contribute to such  differences  include those  discussed  below in the
section  entitled  "Factors  that May Affect  Future  Results."  The  cautionary
statements made in this Report should be read as being applicable to all related
forward-looking statements wherever they appear in this Report.

Capital Resources and Liquidity

At September 30, 2000,  the Company had cash balances of $1,409,690 and deposits
of $1,303,980.  The Company's  cash balances were held for the interest  payment
made to the  Unitholders in November 2000, for normally  recurring  expenses and
for investment in additional Income Producing Assets.

Since  Inception,  the  Company's  funds have come in  primarily  the form of an
initial  contribution  from JMC,  proceeds from the Offering and rental  revenue
from the Income Producing  Assets purchased using those proceeds.  The Company's
liquidity  will vary in the  future,  increasing  to the extent  cash flows from
operations exceed expenses,  and decreasing as interest payments are made to the
Unitholders and to the extent expenses exceed cash flows from leases.

The Company's primary use of its operating cash flow is interest payments to its
Unitholders.  Excess cash flow, after payment of interest and operating expenses
has been held for investment in additional  Income Producing  Assets.  Since the
Company has  acquired  Income  Producing  Assets which are subject to triple net
leases  (the lessee pays  operating  and  maintenance  expenses,  insurance  and
taxes), the Company does not anticipate that it will incur significant operating
expenses in connection with ownership of its Income  Producing Assets while they
remain on lease.

The Company currently has available adequate reserves to meet its immediate cash
requirements.  The leases for the  Company's  aircraft  expire at varying  times
between  July 2001 and May 2003.  During  November  2000,  the Company  sold S/N
AC-621 and recognized a gain of  approximately  $173,000 in connection  with the
sale.  S/N 668 was  repossessed  in November 2000 due to non-payment of rent and
reserves by the lessee and a non-binding term sheet has been signed for the sale
of the aircraft to be  consummated  on November 30, 2000 which,  if  successful,
would allow the Company to realize a gain on the sale of approximately  $35,000.
The  proceeds of such sale would then be used along with the  proceeds  from the
sale of S/N AC-621  noted  above,  along with excess  cash flow,  to purchase an
additional income-producing asset.

As  discussed  in Item 1, the  interest  rate on the  Bonds was  12.94%  through
October  31,  1998 and is a variable  rate  thereafter,  calculated  annually on
November 1. The  variable  rate is equal to the higher of (i) 2% plus the annual
yield rate on one-year U.S.  Treasury  Bills on the last business day of October
of that year or (ii) 8.24%.  Based on the one-year Treasury bill rate on October
31,  1998 and  October 31,  1999,  the Bonds have borne  interest at the rate of
8.24% per annum for the periods  November 1, 1998  through  October 31, 1999 and
November 1, 1999 through  October 31, 2000. The Company has determined  that the
rate will remain at 8.24% for the period  November 1, 2000  through  October 31,
2001.

Although  the Company had a net loss in the first nine months of 2000 versus net
income for the same period in 1999, it also recognized  additional  depreciation
and a provision for impairment in the value of an aircraft  during 2000, the net
effect of which  contributed  to an increase in cash flow from  operations  from
year to year. The increase was also due to a decrease in rent  receivable and an
increase in accounts  payable from year to year. The effect of these changes was
only partially  offset by an increase in cash  classified as deposits,  accounts
receivable and deferred taxes and a decrease in prepaid rents.

The decrease in cash flow used by investing  activities was due to the Company's
purchase of an aircraft during August 1999 versus no such purchases,  other than
capitalizing  the cost of equipment  added to two planes already owned, in 2000.
There were no cash flows from financing  activities during the first nine months
of 2000 or 1999 because the Offering terminated during June 1997.

Results of Operations

The Company recorded net loss of ($33,020) and net income of $113,700 or ($0.04)
and $0.14  per share for the nine  months  ended  September  30,  2000 and 1999,
respectively.  The Company  recorded  net loss of  ($131,280)  and net income of
$67,590 or ($0.16) and $0.08 per share for the three months ended  September 30,
2000 and 1999, respectively.

Rental income  increased by  approximately  $200,000 and $15,000 during the nine
months and three months ended  September 30, 2000 and 1999,  respectively,  as a
result of the purchase of S/N 24 during August 1999. This increase was partially
offset by the sale of an aircraft  during March 1999,  the  one-month  off-lease
period for S/N 13 during the second quarter of 1999 and the  repossession of S/N
668 and the associated  write-off of rent receivable during the third quarter of
2000.

Depreciation  increased  by  approximately  $59,000 and $16,000  during the nine
months and three months ended  September 30, 2000 versus 1999 as a result of the
depreciation expense incurred as a result of the purchases of S/N 668 and S/N 24
during July and August 1999, respectively. This effect was only partially offset
by the sale of an aircraft during March 1999.  Maintenance  expense increased by
approximately  $140,000 and $112,000 in the nine month and three periods of 2000
as a result of maintenance work performed on S/N 3656 in order to prepare it for
re-lease and the accrual of estimated maintenance to be performed on S/N 668, as
a result of reserves  which the  Company was unable to collect  from the lessee.
The  company  wrote  off  the  receivable  for  uncollected  maintenance  during
September  2000.  During  the third  quarter  of 2000,  the  Company  recorded a
provision for impairment in value of S/N 3676 based on its estimated fair value.
If, as the Company anticipates, it is unable to collect a substantial portion of
its claim in bankruptcy for unfunded maintenance requirements, this possibility,
along with the asset impairment for S/N 3676 recognized during the third quarter
of 2000, may have an adverse affect upon the Company's ability to repay its Bond
indebtedness in full at maturity.

Factors that May Affect Future Results

Claims  Against  Bankrupt  Lessee.  The Company owns 100% of one  aircraft  (S/N
3656),  and 50% of a second  aircraft  (S/N 3676)  leased to a British  regional
carrier.  The lessee filed for  reorganization  under U.K. law in February 2000.
The lessee is continuing to operate, and, under a reorganization plan adopted by
the trustee managing the  reorganization,  the lessee agreed to continue leasing
S/N 3676,  on a  month-to-month  basis at the same  rent as under  the  original
lease,  which represents 6% of the Company's current monthly lease revenue.  The
lessee also agreed to begin  paying  monthly  maintenance  reserves for S/N 3676
based on the hours flown.  The  original  lease,  entered into in 1997,  did not
require that the lessee pay maintenance  reserves based on usage because, at the
time, the lessee was considered  creditworthy and had its own facility which was
certified  to perform any required  maintenance.  In February  2000,  the lessee
suspended  payments  for and  returned  S/N  3656,  and the  Company  has  since
re-leased  the  aircraft to an Irish  regional  carrier.  Costs  incurred by the
Company in connection  with the re-lease of S/N 3656 have been  expensed  during
the second quarter of 2000.  The Company has  identified its  pre-reorganization
claims,  such as costs related to the  maintenance  of the aircraft prior to the
reorganization but not required to be performed until after the  reorganization,
and any unpaid lease  rentals for both  aircraft,  which will be  considered  an
unsecured claim against the lessee.  It is unlikely,  however,  that the Company
will recover the full amount of such claims from the lessee,  and a  substantial
deficiency in recovery could adversely affect the Company's ability to repay its
Bond indebtedness in full at maturity.

Ability  to Repay  Bonds.  The  Company's  ability  to repay  the Bonds at their
maturity  date is  dependent in part upon  reinvestment  of excess cash flows in
additional Income Producing Assets. To the extent that the Company realizes less
than anticipated lease rentals due to lessee rental defaults,  early termination
of leases,  or lower than expected  remarketing  proceeds during the term of the
Bonds or realizes significant unexpected expenses due to lessee defaults in rent
or other  obligations,  this may result in lower than expected  excess cash flow
available for  reinvestment  in additional  Assets.  As a result,  the Company's
ability to repay the Bonds in full at  maturity  may be  negatively  affected by
such events even if the Company is able to meet its scheduled interest payments.

The  Company's  ability  to  repay  the  Bonds at  their  maturity  date is also
dependent in part upon its ability to  refinance  the Bonds or sell its aircraft
portfolio at a price sufficient to retire the outstanding Bond principal. If due
to the impairment of S/N 3676 described in "Results of Operations"  above and/or
other risks described below in the risk factors entitled  "Ownership  Risks" and
"Leasing  Risks",  the  values  of the  Company's  aircraft  portfolio  are in a
depressed state at the maturity date of the Bonds,  the Company may be unable to
repay the entire Bond indebtedness on the maturity date.

Risks  Related to Regional Air Carriers.  Because the  Company's  leases are all
with regional air carriers,  it will be subject to certain risks. First, lessees
in the  regional  air  carrier  market  include a number of  companies  that are
start-up,  low  capital,  low  margin  operations.  Often,  the  success of such
carriers is dependent upon arrangements with major trunk carriers,  which may be
subject to  termination  or  cancellation  by such major  carrier.  This  market
segment is also  characterized  by low entry  costs,  and thus,  there is strong
competition in this industry  segment from start-ups as well as major  airlines.
Thus,  leasing  transactions  with these types of lessees results in a generally
higher lease rate on aircraft,  but may entail  higher risk of default or lessee
bankruptcy.

General Economic Conditions. The market for used aircraft has been cyclical, and
usually  reflects  economic  conditions  and  the  strength  of the  travel  and
transportation  industry.  At any time,  the  market  for used  aircraft  may be
adversely  affected by such factors as airline  financial  difficulties,  higher
fuel costs, and improved availability and economics of new replacement aircraft.

An adverse change in the global air travel  industry,  however,  could result in
reduced  carrier revenue and excess capacity and increase the risk of failure of
some weaker regional air carriers.  While the Company  believes that with proper
asset and lessee  selection  the impact of such  changes on the  Company  can be
reduced,  there is no  assurance  that the  Company's  business  will escape the
effects of such a global downturn,  or a regional  downturn in an area where the
Company has placed a significant amount of its assets.

Reliance on JMC. All management of the Company is performed by JMC pursuant to a
management  agreement between JMC and the Company.  The Board of Directors does,
however,  have ultimate control and supervisory  responsibility over all aspects
of  the  Company  and  does  owe  fiduciary   duties  to  the  Company  and  its
stockholders.  In addition,  while JMC may not owe any  fiduciary  duties to the
Company by virtue of the management  agreement,  the officers of the Company are
also officers or employees of JMC, and in that capacity owe fiduciary  duties to
the Company and the stockholders by virtue of holding such offices. Although the
Company has taken steps to prevent such  conflicts,  such  conflicts of interest
arising from such dual roles may still occur.

Ownership  Risks.  All of the  Company's  portfolio  is leased  under  operating
leases,  where the terms of the leases do not take up the entire  useful life of
an asset. The Company's  ability to recover its purchase  investment in an asset
subject  to an  operating  lease is  dependent  upon the  Company's  ability  to
profitably  re-lease or sell the asset after the expiration of the initial lease
term.  Some of the  factors  that  have an impact on the  Company's  ability  to
re-lease or sell include worldwide economic conditions,  general aircraft market
conditions,  regulatory  changes that may make an asset's use more  expensive or
preclude  use  unless  the asset is  modified,  changes in the supply or cost of
aircraft  equipment  and  technological  developments  which  cause the asset to
become obsolete.  In addition, a successful investment in an asset subject to an
operating  lease depends in part upon having the asset returned by the lessee in
serviceable  condition as required under the lease.  If the Company is unable to
remarket its aircraft  equipment on favorable terms when the operating lease for
such equipment expires, the Company's business,  financial condition, cash flow,
ability to service debt and results of operation could be adversely affected.

Lessee Credit Risk. If a lessee defaults upon its obligations under a lease, the
Company may be limited in its ability to enforce remedies. Most of the Company's
lessees are small domestic and foreign regional passenger airlines, which may be
even  more  sensitive  to  airline  industry  market  conditions  than the major
airlines.  As a  result,  the  Company's  inability  to  collect  rent  under  a
significant  lease or to  repossess  equipment  in the event of a  default  by a
lessee  could have a material  adverse  effect on the  Company's  revenue.  If a
lessee that is a certified U.S.  airline is in default under the lease and seeks
protection under Chapter 11 of the United States  Bankruptcy Code, under Section
1110 of the Bankruptcy Code, the Company would be  automatically  prevented from
exercising  any  remedies  for a  period  of 60  days.  By the end of the 60 day
period,  the lessee must agree to perform the obligations and cure any defaults,
or the Company would have the right to repossess the  equipment.  This procedure
under the  Bankruptcy  Code has been subject to significant  recent  litigation,
however,  and it is possible that the Company's  enforcement rights may still be
further  adversely  affected by a  declaration  of  bankruptcy  by a  defaulting
lessee.  Even if an aircraft  can be  repossessed,  the Company may be unable to
recover  damages  from  the  lessee  if  the  condition  of  the  aircraft  when
repossessed was worse than that required by the lease.

International  Risks. The Company's  portfolio  includes leases with foreign air
carriers.  Leases with foreign  lessees may present  somewhat  different  credit
risks than those with domestic lessees.

Foreign laws, regulations and judicial procedures may be more or less protective
of lessor  rights as those which apply in the United  States.  The Company could
experience   collection  problems  related  to  the  enforcement  of  its  lease
agreements  under foreign local laws and the remedies in foreign  jurisdictions.
The protections potentially offered by Section 1110 of the Bankruptcy Code would
not apply to non-U.S.  carriers,  and applicable local law may not offer similar
protections.  Certain countries do not have a central  registration or recording
system with which to locally  establish the Company's  interest in equipment and
related leases. This could add difficulty in recovering an aircraft in the event
that a foreign lessee defaults.

Leases with foreign  lessees are subject to risks  related to the economy of the
country  or region in which  such  lessee is  located  even if the U.S.  economy
remains  strong.  On the other hand,  a foreign  economy may remain  strong even
though the domestic U.S. economy does not. A foreign economic downturn may occur
and impact a foreign  lessee's  ability to make lease payments,  even though the
U.S. and other economies remain stable. Furthermore, foreign lessees are subject
to risks  related to currency  conversion  fluctuations.  Although the Company's
current leases are all payable in U.S. dollars,  in the future,  the Company may
agree to leases that permit  payment in foreign  currency,  which would  subject
such lease  revenue to  monetary  risk due to currency  fluctuations.  Even with
dollar-denominated lease payment provisions, the Company could still be affected
by a  devaluation  of the  lessee's  local  currency  which  would  make it more
difficult for a lessee to meet its dollar-denominated lease payments, increasing
the risk of default of that lessee,  particularly  if that carrier's  revenue is
primarily derived in the local currency.

Competition.  The Company has many competitors in the aircraft leasing industry,
including leasing companies, banks and other financial institutions and aircraft
leasing  partnerships.  The market is highly competitive.  Most of the Company's
competitors have  substantially  greater  financial and other resources than the
Company.

Casualties,   Insurance  Coverage.  The  Company,  as  owner  of  transportation
equipment, could be held liable for injuries or damage to property caused by its
assets. Though some protection may be provided by the United States Aviation Act
with  respect  to its  aircraft  assets,  it is not  clear to what  extent  such
statutory  protection  would be  available  to the  Company and such act may not
apply to aircraft  operated in foreign  countries.  Though the Company may carry
insurance or require a lessee to insure  against a risk,  some risks of loss may
not be insurable.  An uninsured loss with respect to the Equipment or an insured
loss for which  insurance  proceeds are  inadequate,  would result in a possible
loss of invested capital in and any profits anticipated from such equipment.

Leasing  Risks.  The  Company's  successful  negotiation  of  lease  extensions,
re-leases  and sales may be critical  to its  ability to achieve  its  financial
objectives,  and will involve a number of substantial risks. Demand for lease or
purchase of the assets depends on the economic condition of the airline industry
which is in turn highly  sensitive to general  economic  conditions.  Ability to
remarket  equipment  at  acceptable  rates may  depend on the  demand and market
values at the time of remarketing. The market for used aircraft is cyclical, and
generally,  but not always, reflects economic conditions and the strength of the
travel and  transportation  industry.  The demand for and value of many types of
older  aircraft in the recent past has been depressed by such factors as airline
financial  difficulties,  increased  fuel costs,  the number of new  aircraft on
order  and the  number  of  older  aircraft  coming  off  lease.  The  Company's
concentration  in a  limited  number  of  airframe  and  aircraft  engine  types
(generally, turboprop equipment) subjects the Company to economic risks if those
airframe or engine types should  decline in value.  The recent  introduction  of
"regional  jets" to serve on short routes  previously  thought to be  economical
only for turboprop  aircraft  operation  could decrease the demand for turboprop
aircraft,  while  at the same  time  increasing  the  supply  of used  turboprop
aircraft.  This could  result in lower lease rates and values for the  Company's
turboprop aircraft.





<PAGE>



                                   SIGNATURES


Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on November 15, 2000.

                                          JETFLEET III


                                      By: /s/ Neal D. Crispin
                                          ----------------------
                                          Neal D. Crispin
                                          Title:  President

Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following  persons in the  capacities  indicated on November
15, 2000.

Signature                                   Title

/s/ Neal D. Crispin                         President and Chairman of the
-------------------
Neal D. Crispin                             Board of Directors of the Registrant
                                            Chief Financial Officer