UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 12b-25

_________________

NOTIFICATION OF LATE FILING

|(Check one): | oForm 10-KoForm 20-FoForm 11-KxForm 10-QoForm 10-DoForm N-SARoForm N-CSR                                                                                                                                                                                                 
|------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                                                                                                                                                          
|             | For Period
    Ended: March 31, 2013oTransition Report
    on Form 10-KoTransition Report
    on Form 20-FoTransition Report
    on Form 11-KoTransition Report
    on Form 10-QoTransition Report
    on Form N-SARFor the Transition Period Ended: ____________________

If the notification relates to a portion of the filing
checked above, identify the Item(s) to which the notification relates:

PART I — REGISTRANT INFORMATION

|DSI Realty Income Fund VII                               
|---------------------------------------------------------
|                                                         
|Full Name of Registrant                                  
|                                                         
|                                                         
|Former Name if Applicable                                
|6700 E Pacific Coast Highway                             
|                                                         
|Address of Principal Executive Office (Street and Number)
|Long Beach, CA 90803                                     
|                                                         
|City, State and Zip Code                                 

PART II — RULES 12b-25(b)
AND (c)

If the subject report could not be filed without unreasonable
effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check box
if appropriate)

| | x |     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | The reason described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense;
| | - | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------
| |   | (b) | The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D,or portion thereof, will be filed on or before the fifth calendar day following the prescribed due date; and
| |   | (c) | The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if applicable.                                                                                                                                                                                                                                                                                                                                                               

PART III — NARRATIVE

State below in reasonable detail the reasons why Forms
10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed
time period. (Attach extra Sheets if Needed)

The Company is unable to file its Form 10-Q within the prescribed
period without unreasonable effort or expense due to administrative difficulties.  The Company fully expects to be able to file within the additional time allowed
by this report.





PART IV — OTHER INFORMATION

|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- |  | ------------------
|(1) | Name and telephone number of person to contact in regard to this notification                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    | Richard P. Conway                                                                                                                                                                                                                                                                                                                |  | (562)       |  | 493-8881          
|    | (Name)                                                                                                                                                                                                                                                                                                                           |  | (Area Code) |  | (Telephone Number)
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|(2) | Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed? If answer is no, identify report(s).
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    | YesþNOo                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    |                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|(3) | Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    | YesoNOþ                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    | If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   
|    |                                                                                                                                                                                                                                                                                                                                  |  |             |  |                   

DSI Realty Income Fund VII

(Name of Registrant as Specified in
Charter)

has caused this notification to be signed on its behalf
by the undersigned hereunto duly authorized.

|Date: | May 15, 2013 |  | By: | /s/ Richard P. Conway
|----- | ------------ |  | --- | ---------------------