DSI REALTY INCOME FUND VII



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 2O549
                                    FORM 1O-K

(Mark One)
/ x /Annual  Report  Pursuant  to  Section  13 or 15 (d) of the  Securities  and
Exchange Act of 1934 [Fee required] for the fiscal year ended December 31, 2004.
or /  /Transition  report  pursuant  to  section  13 or 15(d) of the  Securities
Exchange  Act  of  1934  [No  fee  required]  for  the  transition  period  from
_____________ to _____________.

Commission File No. 2-83291.

DSI REALTY  INCOME FUND VII, a  California  Limited  Partnership  (Exact name of
registrant as specified in governing instruments)

_________California___________________________95-3871044_____
(State of other jurisdiction of              (I.R.S. Employer
incorporation or organization                identification number

         6700 E. Pacific Coast Hwy., Long Beach, California 9O8O3
         (Address of principal executive offices)     (Zip Code)

Registrants telephone number, including area code-(562)493-8881

Securities registered pursuant to Section 12(b) of the Act: none.

Securities registered pursuant to Section 12(g) of the Act:

                     Units of Limited Partnership Interests
                        (Class of Securities Registered)

     Indicate by check mark,  whether the  registrant  (l) 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 9O days. Yes_X____. No______.

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. /x/

     The Registrant is a limited  partnership and there is no voting stock.  All
units of limited  partnership  sold to date are owned by  non-affiliates  of the
registrant. All such units were sold at $5OO.OO per unit.



                       DOCUMENTS INCORPORATED BY REFERENCE

Item 8. Registrant's Financial Statements for its fiscal year ended December 31,
     2004, incorporated by reference to Form 10-K, Part II.

Item 11.  Registrant's  Financial  Statements for its fiscal year ended December
     31, 2004, incorporated by reference to Form 10-K, Part III.

Item 12. Registration  Statement  on  Form  S-11,  previously  filed  with  the
     Securities and Exchange  Commission  pursuant to Securities Act of 1933, as
     amended, incorporated by reference to Form 10-K Part III.

Item 13.  Registrant's  Financial  Statements for its fiscal year ended December
     31, 2004, incorporated by reference to Form 10-K, Part III.

                                     PART I

Item l.  BUSINESS

     Registrant,   DSI  Realty  Income  Fund  VII  (the   "Partnership")   is  a
publicly-held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to a Certificate  and Agreement of Limited  Partnership
(hereinafter  referred  to as  "Agreement")  dated  August 1, 1983.  The General
Partners  are  DSI  Properties,  Inc.,  a  California  corporation,  Diversified
Investors  Agency, a general  partnership,  whose current partners are Robert J.
Conway and Joseph W. Conway,  brothers.  The General  Partners are affiliates of
Diversified Securities,  Inc., a wholly-owned subsidiary of DSI Financial,  Inc.
The General Partners provide similar services to other partnerships. Through its
public  offering  of Limited  Partnership  Units,  Registrant  sold  twenty-four
thousand  (24,000) units of limited  partnership  interests  aggregating  Twelve
Million Dollars ($12,000,000).  The General Partners have retained a one percent
(l%)  interest  in all  profits,  losses and  distributions  (subject to certain
conditions)  without making any capital  contribution  to the  Partnership.  The
General  Partners  are not  required  to make any capital  contributions  to the
Partnership in the future. Registrant is engaged in the business of investing in
and operating mini-storage facilities with the primary objectives of generating,
for its  partners,  cash  flow,  capital  appreciation  of its  properties,  and
obtaining  federal  income tax  deductions  so that  during  the early  years of
operations,  all or a  portion  of such  distributable  cash  may not  represent
taxable income to its partners.  Funds obtained by Registrant  during the public
offering period of its units were used to acquire six  mini-storage  facilities.
Registrant does not intend to sell additional  limited  partnership  units.  The
term of the  Partnership  is fifty years but it is anticipated  that  Registrant
will sell  and/or  refinance  its  properties  prior to the  termination  of the
Partnership.  The Partnership is intended to be  self-liquidating  and it is not
intended that proceeds from the sale or refinancing of its operating  properties
will be reinvested. Registrant has no full time employees but shares one or more
employees with other publicly-held limited partnerships sponsored by the General
Partners.  The  General  Partners  are vested with  authority  as to the general
management and  supervision  of the business and affairs of Registrant.  Limited
Partners  have no right to  participate  in the  management  or  conduct of such
business and affairs.  An  independent  management  company has been retained to
provide day-to-day  management services with respect to all of the Partnership's
investment properties.

     The average  occupancy level for each of the  Partnership's  six properties
for the years ended December 31, 2004 and December 31, 2003 were as follows:


Location of Property       Average Occupancy         Average Occupancy Level
                           for the                   Level for the
                           Year Ended                Year Ended
                           Dec. 31, 2004             Dec. 31, 2003

Chico, California               84%                       85%

Fairfield, California           85%                       88%

Ft. Collins, Colorado           83%                       82%

LaVerne, California             86%                       88%

Littleton, Colorado             77%                       78%

Riverside, California           87%                       89%

     The  business in which the  Partnership  is engaged is highly  competitive.
Each of its  mini-storage  facilities  is located in or near a major urban area,
and  accordingly,   competes  with  a  significant  number  of  individuals  and
organizations  with respect to both the purchase and sale of its  properties and
for rentals.  Generally,  Registrant's business is not affected by the change in
seasons.



Item 2.  PROPERTIES

     Registrant  owns a fee  interest in six  mini-storage  facilities,  none of
which are subject to long-term indebtedness. Additional information is set forth
in  Registrant's  letter to its Limited  Partners  regarding the Annual  Report,
attached hereto as Exhibit 2, and incorporated by this reference.  The following
table sets forth information as of December 31, 2004 regarding  properties owned
by the Partnership.

Location          Size of     Net Rentable     No. of            Completion
                  Parcel      Area             Rental Units      Date

Chico, CA         1.97 acres  39,580           366                9/05/84

Fairfield, CA     2.29 acres  40,668           442                8/31/84

Ft.Collins, CO    2.49 acres  57,284           603                3/27/85

LaVerne, CA       2.78 acres  50,652           523                8/21/84

Riverside, CA     2.92 acres  60,011           567               12/12/84

Littleton, CO     3.071 acres 43,380           404               11/01/85

Item 3.  LEGAL PROCEEDINGS

     Registrant is not a party to any material pending legal proceedings.

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

     None.

                                     PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS

     Registrant,  a  publicly-held  limited  partnership,  sold  24,000  limited
partnership  units during its offering and currently has 878 limited partners of
record.  There is no intention to sell additional limited  partnership units nor
is there a market for these units.

     Average  cash  distributions  of $13.25 per Limited Partnership Unit were
declared and paid each quarter for the year ended December 31, 2004 and  $11.35
per Limited Partnership Unit were declared and paid each quarter for the year
ended December 31, 2003 and $13.85 per Limited Partnership Unit were declared
and paid each quarter for the year ended December 31, 2002.




Item 6.  SELECTED FINANCIAL DATA
         FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002, 2001, and 2000
         --------------------------------------------------------------------
                     2004         2003         2002         2001        2000
                     ----         ----         ----         ----        ----

TOTAL REVENUES
AND OTHER
INCOME            $2,515,273   $2,577,993   $2,614,292   $2,597,851   $2,351,050

TOTAL
EXPENSES           1,266,869    1,286,265    1,320,183    1,210,651    1,237,093
                  ----------   ----------   ----------   ----------   ----------

NET
INCOME            $1,248,404   $1,291,728   $1,294,109   $1,387,200   $1,113,957
                  ==========   ==========   ==========   ==========   ==========

TOTAL
ASSETS            $2,952,694   $2,833,436   $2,650,108   $2,696,934   $2,603,230
                  ==========   ==========   ==========   ==========   ==========

CASH FLOWS FROM (USED IN):
OPERATING         $1,249,363   $1,277,393   $1,310,542   $1,344,360   $1,231,203
INVESTING            (23,858)        -            -            -         (5,388)
FINANCING         (1,284,378)  (1,100,643)  (1,343,293)  (1,282,481) (1,281,976)

NET INCOME
PER LIMITED
PARTNERSHIP
UNIT              $    51.50   $    53.28   $    53.38   $    57.22   $    45.95
                  ==========   ==========   ==========   ==========   ==========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT              $    52.98   $    45.40   $    55.41   $    52.90   $    52.88
                  ==========   ==========   ==========   ==========   ==========



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

Critical Accounting Policies

Revenue recognition - Rental revenue is recognized using the accrual method
based on contractual amounts provided for in the lease agreements, which
approximates recognition on a straight-line basis.  The term of the lease
agreements is usually less than one year.



                              RESULTS OF OPERATIONS

2004 COMPARED TO 2003

     Total revenues decreased from $2,577,321 in 2003 to $2,514,629 in 2004,
while total expenses decreased from $1,286,265 to $1,266,869 and other income
decreased from $672 to $644 resulting in a decrease in net income from
$1,291,728 to $1,248,404.  Rental revenues decreased primarily as a result of
lower occupancy rates.  Occupancy levels for the Partnership's six mini-storage
facilities averaged 83.5% for the year ended December 31, 2004 and 86.3% for
the year ended December 31, 2003.  The Partnership continued its advertising
campaign to attract and keep new tenants in its various mini-storage facilities.
The approximate $33,100 (4.2%) increase in operating expenses was due primarily
to increases in purchase of locks, real estate tax and salaries and wages
expenses, partially offset by a decrease in advertising expense.  General and
administrative expenses decreased approximately $48,500 (19.6%) primarily as
a result of decreases in legal and professional fees and equipment and computer
lease expenses, partially offset by an increase in office supplies and printing
expense.  The decrease in legal expense and professional expense is related to
unsuccessful legal challenges by two dissident Limited Partners to a proposed
amendment to the Partnership Agreement (see paragraph below).  The General
Partners' incentive management fee which is based on cash available for dis-
tribution, decreased as a result of the decrease in net cash provided by
operating activities reduced by additions to property.  Property management
fees remained relatively constant.


2003 COMPARED TO 2002

     Total revenues decreased from $2,613,254 in 2002 to $2,577,321 in 2003,
while total expenses decreased from $1,320,183 to $1,286,265 and other income
decreased from $1,038 to $672 resulting in a decrease in net income from
$1,294,109 to $1,291,728.  Rental revenue remained relatively constant.
Occupancy levels for the Partnership's six mini-storage facilities averaged
86.3% for the year ended December 31, 2003 and 86.2% for the year ended
December 31, 2002.  The Partnership  continued its advertising campaign
to attract and keep new tenants in its various mini-storage facilities.  The
approximate $57,200 (6.8%) decrease in operating expenses was due primarily
to decreases in yellow pages advertising costs, maintenance and repair and
workers compensation insurance expenses, partially offset by an increase in
salaries and wages expense.  General and administrative expenses increased
approximately $37,600 (17.9%) primarily as a result of increases in legal
and professional fees, partially offset by decreases in equipment and computer
lease and office supplies expenses.  Legal expense increased as a result of
legal challenges by dissident Limited Partners to a proposed amendment to
the Partnership Agreement.  General Partners' incentive management fee, which
is based on cash available for distribution, decreased approximately $12,800
(9.1%). Property management fees, which are based on revenue, remained
relatively constant.

     Operating expenses consists mainly of expenses such as yellow pages and
other advertising, utilities, repairs and maintenance, real estate taxes,
salaries and wages and their related expenses.  General and administrative
expenses consist mainly of expenses such as legal and professional, office
supplies accounting services and computer expenses.



                         LIQUIDITY AND CAPITAL RESOURCES

     Net cash  provided  by  operating  activities  increased  approximately
$129,400 (10.1%) in 2004 compared to 2003 primarily due to the increase in
customer deposits and other liabilities.  Net cash provided by operating
activities decreased approximately $33,800 (2.5%) in 2002 compared to 2001
primarily due to the decrease in net income, partially offset by an increase
in incentive management fee payable to general partners and a decrease in
other assets.

    Cash used in financing  activities, as set forth in the statements of cash
flows,  has  consisted  solely of cash  distributions  to partners. Special
distributions of 2.5%, 1.0%, and 3.0% of capital contributed by Limited Part-
ners, were declared and paid on December 15, 2004, 2003, and 2002, respectively.

    Cash used in investing activities, as set forth in the statement of cash
flows, has consisted solely of acquisitions of equipment for the Partnership's
mini storage properties in 2004.  The Partnership has no material commitments
for capital expenditures.

    In 2003, the Limited Partners approved an amendment to the Partnership
Agreement granting the General Partners ten days to review certain types of
transfers during which the General Partners may match, exceed or approve the
proposed transfers.  The Court rejected all preliminary attempts to halt the
implementation of the amendment.  Subsequently, the two dissident Limited
Partners who initiated the legal proceedings decided not to pursue the matter
any further.

     The General Partners  plan  to  continue  their  policy  of  funding  the
continuing  improvement and maintenance  of Partnership  properties  with cash
generated from operations.  The Partnership anticipates  that cash flows
generated from operations of the Partnership's rental real estate operations
will be sufficient to cover operating expenses and distributions for the next
twelve months and beyond.

     The General Partners are not aware of any environmental problems which
could have an adverse material effect upon the financial position of the Part-
nership.

                     QUARTERLY FINANCIAL INFORMATION (UNAUDITED)



Summarized quarterly financial data for the years ended December 31, 2004 and
2003 was as follows:

                                            2004 QUARTER ENDED
                                            ------------------
                           March 31   June 30   September 30    December 31

Total revenues             $642,833   $633,029   $635,270        $603,497

Net income                  327,568    287,364    312,327         321,145

Net income per
  limited partnership unit $  13.51   $  11.85   $  12.88        $  13.26

Weighted average number
 of limited partnership
 units outstanding           24,000     24,000     24,000          24,000



                                            2003 QUARTER ENDED
                                            ------------------

                           March 31   June 30   September 30    December 31

Total revenues             $650,704   $648,778   $652,525        $625,314

Net income                  338,859    323,617    290,895         338,357

Net income per
  limited partnership unit $  13.98   $  13.35   $  12.00        $  13.95

Weighted average number
 of limited partnership
 units outstanding           24,000     24,000     24,000          24,000



Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     None.


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Attached hereto as Exhibit l is the information required to be set forth as
     Item 8, Part II hereof.

     See the financial statements.

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

     None.

Item 9a. CONTROLS AND PROCEDURES

     The Partnership evaluated the effectiveness of its disclosure controls
     and procedures.  This evaluation was performed by the Partnership's
     Controller with the assistance of the Partnership's President and the
     Chief Executive Officer. These disclosure controls and procedures are
     designed to ensure that the information required to be disclosed by the
     Parnership in its periodic reports filed with the Securities and Exchange
     Commission (the "Commission") is recorded, processed summarized and
     reported, within the time periods specified by the Commission's rules
     and forms, and that the information is communicated to the certifying
     officers on a timely basis.  Based on this evaluation, the Partnership
     concluded that its disclosure controls and procedures were effective.
     There have been no significant changes in the Partnership's internal
     controls or in other factors that could significantly affect the internal
     controls subsequent to the date of their evaluation.


                                    PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S GENERAL PARTNER

     The General Partners of Registrant are the same as when the Partnership was
formed, i.e., DSI Properties,  Inc., a California  corporation,  and Diversified
Investors Agency. As of December 31, 2004,  Messrs.  Robert J. Conway and Joseph
W. Conway,  each of whom own approximately  48.4% of the issued and outstanding
capital stock of DSI Financial,  Inc., a California  corporation,  together with
Mr.  Joseph W. Stok,  currently  comprise  the entire  Board of Directors of DSI
Properties, Inc.

     Mr. Robert J. Conway is 71 years of age and is a licensed  California  real
estate  broker,  and since 1965 has been  President and a member of the Board of
Directors of  Diversified  Securities,  Inc.,  and since 1973  President,  Chief
Financial Officer and a member of the Board of Directors of DSI Properties, Inc.
Mr. Conway received a Bachelor of Science Degree from Marquette  University with
majors in Corporate Finance and Real Estate.

     Mr.  Joseph W.  Conway  is age 76 and has been  Executive  Vice  President,
Treasurer and a member of the Board of Directors of Diversified Securities, Inc.
since 1965 and since 1973 the Vice President,  Treasurer and member of the Board
of Directors of DSI  Properties,  Inc.  Mr.  Conway  received a Bachelor of Arts
Degree from Loras College with a major in Accounting.

     Mr.  Joseph  W.  Stok is age 82 and  has  been a  member  of the  Board  of
Directors of DSI  Properties,  Inc.  since 1994, a Vice President of Diversified
Securities,   Inc.  since  1973,  and  an  Account  Executive  with  Diversified
Securities, Inc. since 1967.

Item 11. EXECUTIVE COMPENSATION (MANAGEMENT REMUNERATION AND TRANSACTIONS)

     The  information  required  to be  furnished  in  Item  11 of  Part  III is
contained  in  Registrant's  Financial  Statements  for its  fiscal  year  ended
December 31, 2004,  which together with the report of its independent  auditors,
Deloitte & Touche LLP, is attached hereto as Exhibit 1 and  incorporated  herein
by this reference. In addition to such information:

     (a)  No annuity,  pension or retirement  benefits are proposed to be paid
          by Registrant to any of the General Partners or to any officer or
          director of the corporate General Partner;

     (b)  No  standard or other  arrangement  exists by which  directors  of the
          Registrant are compensated;

     (c)  The  Registrant  has not  granted  any option to  purchase  any of its
          securities; and

     (d)  The Registrant has no plan, nor does the Registrant  presently propose
          a plan,  which  will  result  in any  remuneration  being  paid to any
          officer or director upon termination of employment.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of  December  31,  2004,  no person of record  owned more than 5% of the
limited partnership units of Registrant,  nor was any person known by Registrant
to own of record and beneficially,  or beneficially  only, more than 5% thereof.
The balance of the  information  required to be furnished in Item 12 of Part III
is contained in  Registrant's  Registration  Statement on Form S-11,  previously
filed  pursuant  to the  Securities  Act of  1933,  as  amended,  and  which  is
incorporated  herein  by this  reference.  The only  change  to the  information
contained in said  Registration  Statement on Form S-11 is the fact that Messrs.
Benes and Blakley have retired and Messrs. Robert J. Conway and Joseph W. Conway
equity  interest in DSI Financial,  Inc.,  parent of DSI  Properties,  Inc., has
increased. Please see information contained in Item 10 hereinabove.



Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required  to be  furnished  in  Item  13 of  Part  III is
contained  in  Registrant's  Financial  Statements  for its  fiscal  year  ended
December 31, 2004,  attached hereto as Exhibit l and incorporated herein by this
reference.

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Audit Fees

     The aggregate fees for professional services rendered by Deloitte & Touche
LLP for the audit of the Partnership's annual financial statements and for re-
view of the financial statements included in the Partnership's Quarterly Reports
on Form 10-Q for 2004 were $26,920 and for 2003 were $25,600.

     Tax Fees

     The aggregate fees for professional services rendered by Deloitee & Touche
LLP for tax compliance, tax advice and tax planning for 2004 were $20,900 and
for 2003 were $19,500.  Most of the fees related to preparation of the Partner-
ship's tax returns.


                                     PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(l) Attached hereto and incorporated herein by this reference as Exhibit
          l are Registrant's  Financial Statements and Supplemental Schedule for
          its fiscal year ended December 31, 2004,  together with the reports of
          its independent  auditors,  Deloitte & Touche LLP.  See Index to
          Financial Statements and Supplemental Schedule.

     (a)(2) Attached hereto and incorporated herein by this reference as Exhibit
          2 is Registrant's  letter to its Limited Partners regarding its Annual
          Report for its fiscal year ended December 31, 2004.

     (b)  No reports on Form 8K were filed during the fiscal year ended December
          31, 2004.

                                   SIGNATURES

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

DSI REALTY INCOME FUND VII
by:  DSI Properties, Inc., a
California corporation, as
General Partner



By_____________________________     Dated:  March 31, 2005
  ROBERT J. CONWAY, President
  (Chief Executive Officer, Chief
  Financial Officer, and Director)



By____________________________      Dated:  March 31, 2005
  JOSEPH W. CONWAY (Executive
  Vice President and Director)

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

DSI REALTY INCOME FUND VII
by:  DSI Properties, Inc., a
California corporation, as
General Partner



By:__________________________       Dated:  March 31, 2005
  ROBERT J. CONWAY, President,
  Chief Executive Officer, Chief
  Financial Officer, and Director



By___________________________       Dated:  March 31, 2005
  JOSEPH W. CONWAY
  (Executive Vice President
  and Director)



                           DSI REALTY INCOME FUND VII

                              CROSS REFERENCE SHEET

                        FORM 1O-K ITEMS TO ANNUAL REPORT


PART I, Item 3. There are no legal proceedings pending or threatened.

PART I, Item 4.  Not applicable.

PART II, Item 5.  Not applicable.

PART II, Item 6. The information required is contained in Registrant's Financial
Statements for its fiscal year ended December 31, 2004, attached as Exhibit l to
Form 10-K.

PART II, Item 8. See Exhibit l to Form 10-K filed herewith.

PART II, Item 9.  Not applicable.



                                    EXHIBIT l

DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 2004

-----------------------------------------------------------------------------
                     2004         2003         2002         2001        2000
                     ----         ----         ----         ----        ----

TOTAL REVENUES
AND OTHER
INCOME            $2,515,273   $2,577,993   $2,614,292   $2,597,851   $2,351,050

TOTAL
EXPENSES           1,266,869    1,286,265    1,320,183    1,210,651    1,237,093
                  ----------   ----------   ----------   ----------   ----------

NET
INCOME            $1,248,404   $1,291,728   $1,294,109   $1,387,200   $1,113,957
                  ==========   ==========   ==========   ==========   ==========

TOTAL
ASSETS            $2,952,694   $2,833,436   $2,650,108   $2,696,934   $2,603,230
                  ==========   ==========   ==========   ==========   ==========

CASH FLOWS FROM (USED IN):
OPERATING         $1,249,363   $1,277,393   $1,310,542   $1,344,360   $1,231,203
INVESTING            (23,858)        -            -            -         (5,388)
FINANCING         (1,284,378)  (1,100,643)  (1,343,293)  (1,282,481) (1,281,976)

NET INCOME
PER LIMITED
PARTNERSHIP
UNIT              $    51.50   $    53.28   $    53.38   $    57.22   $    45.95
                  ==========   ==========   ==========   ==========   ==========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT              $    52.98   $    45.40   $    55.41   $    52.90   $    52.88
                  ==========   ==========   ==========   ==========   ==========




The following are  reconciliations  between the operating  results and partners'
equity per the financial  statements and the Partnership's income tax return for
the year ended December 31, 2004.

                                                         Net          Partners'
                                                        Income         Equity

Per financial statements                             $ 1,248,404    $ 2,192,488
Excess tax depreciation                                  (74,819)      (153,265)
Accrued property taxes                                    (3,891)      (101,259)
Deferred rental revenues                                                 85,723
Accrued expenses                                           9,800          9,800
Accrued incentive management fees                                       221,117
Fixed asset adjustment                                   (11,450)       206,824
Excess book distribution                                                242,415
Tax expense adjustment                                   (11,648)
                                                     -----------    -----------
Per Partnership income tax return                    $ 1,156,396    $ 2,703,843
                                                     ===========    ===========
Net taxable income per
limited partnership unit                             $     47.70
                                                     ===========



DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)


INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE


                                                                            Page

FINANCIAL STATEMENTS:

    Report of Independent Registered Public
        Accounting firm                                                      F-1


    Balance Sheets as of December 31, 2004 and 2003                          F-2

    Statements of Income for each of the Three
        Years Ended December 31, 2004                                        F-3

    Statements of Changes in Partners' Equity (Deficit)for each
        of the Three Years Ended December 31, 2004                           F-4

    Statements of Cash Flows for each of the Three Years
        Ended December 31, 2004                                              F-5

    Notes to Financial Statements                                            F-6

SUPPLEMENTAL SCHEDULE:

    Schedule III - Real Estate and Accumulated Depreciation                  F-9

    NOTE:

     Financial  statements and schedules not listed above are omitted  because
     of the absence  of  conditions  under  which  they are  required  or
     because  the information is included in the financial  statements named
     above, or in the notes thereto.



REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Partners of
DSI Realty Income Fund VII:

We have audited the accompanying balance sheets of DSI Realty Income Fund VII, a
California limited  partnership (the  "Partnership")  as of December 31, 2004
and 2003,  and the related  statements of income,  changes in partners' equity
(deficit), and cash flows for each of the three years ended December 31, 2004.
Our audits also included the financial statement schedule listed in the Index
at Item 15.  These financial  statements  and the financial statement schedule
are the responsibility of the Partnership's management. Our responsibility  is
to express an opinion on these financial statements and financial statement
schedule based on our audits.

We  conducted  our  audits  in  accordance  with  the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Partnership is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial
reporting.  Accordingly, we express no such opinion.  An audit also includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and signi-
ficant estimates made by management, as well as evlauating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of DSI Realty Income Fund VII at December 31,
2004 and 2003,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  2004,  in  conformity  with
accounting principles generally accepted  in the United States of America. Also,
in our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.


Deloitte & Touche LLP
March 14, 2005




DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
--------------------------------------------------------------------------------


ASSETS                                                  2004             2003

CASH AND CASH EQUIVALENTS                           $   616,045      $  674,918

PROPERTY, net (Note 3)                                2,268,876       2,089,800

OTHER ASSETS                                             67,773          68,718
                                                    -----------      -----------
TOTAL                                               $ 2,952,694      $2,833,436
                                                    ===========      ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

LIABILITIES:
Distribution due partners (Note 4)                  $   242,424      $   242,424
Incentive management fee payable to
general partners (Note 4)                               250,403          254,576
Property management fees payable                         13,066           10,253
Customer deposits and other liabilities                 107,959           97,721
Capital lease obligations (Note 3)                      146,354
                                                    -----------      -----------
Total liabilities                                       760,206          604,974
                                                    -----------      -----------
PARTNERS' EQUITY (DEFICIT)(Notes 4):
General partners                                        (85,844)        (85,484)
Limited partners (24,000 limited
partnership units outstanding
at December 31, 2004 and 2003)                        2,278,332       2,313,946
                                                   ------------      -----------
Total partners' equity                                2,192,488       2,228,462
                                                   ------------      -----------
TOTAL                                               $ 2,952,694     $ 2,833,436
                                                   ============      ===========

See accompanying notes to financial statements.



DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

STATEMENTS OF INCOME
THREE YEARS ENDED DECEMBER 31, 2004
--------------------------------------------------------------------------------


                                               2004         2003         2002

REVENUES:
Rental                                      $2,514,629   $2,577,321   $2,613,254
                                            ----------   ----------   ----------
EXPENSES:
 Depreciation                                    2,386         -            -
 Operating                                     814,977      781,921      839,143
 General and administrative                    199,484      248,000      210,413
 General partners' incentive
  management fee (Note 4)                      120,973      127,790      140,588
 Property management fee                       129,049      128,554      130,039
                                            ----------   ----------   ----------
Total expenses                               1,266,869    1,286,265    1,320,183
                                            ----------   ----------   ----------
OPERATING INCOME                             1,247,760    1,291,056    1,293,071

OTHER INCOME-
 Interest income                                   644          672        1,038
                                            ----------   ----------   ----------
NET INCOME                                  $1,248,404   $1,291,728   $1,294,109
                                            ==========   ==========   ==========

NET INCOME ALLOCATED TO (Note 4):
Limited partners                            $1,235,920   $1,278,811   $1,281,168
General partners                                12,484       12,917       12,941
                                            ----------   ----------   ----------
TOTAL                                       $1,248,404   $1,291,728   $1,294,109
                                            ==========   ==========   ==========
NET INCOME ALLOCATED TO LIMITED
PARTNERS PER LIMITED PARTNERSHIP
UNIT (Notes 2 and 4)                        $    51.50   $    53.28   $    53.38
                                            ==========   ==========   ==========

See accompanying notes to financial statements.


DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 2004
--------------------------------------------------------------------------------


                                         General       Limited
                                        Partners       Partners         Total

BALANCE, JANUARY 1, 2002               $(86,903)    $ 2,173,464     $ 2,086,561

 Net income                              12,941       1,281,168       1,294,109

 Distributions                          (13,433)     (1,329,860)     (1,343,293)
                                       --------     -----------     -----------
BALANCE, DECEMBER 31, 2002             $(87,395)    $ 2,124,772     $ 2,037,377

 Net income                              12,917       1,278,811       1,291,728

 Distributions                          (11,006)     (1,089,637)     (1,100,643)
                                       --------     -----------     -----------
BALANCE, DECEMBER 31, 2003             $(85,484)    $ 2,313,946     $ 2,228,462

 Net income                              12,484       1,235,920       1,248,404

 Distributions                          (12,844)     (1,271,534)     (1,284,378)
                                       --------     -----------     -----------
BALANCE, DECEMBER 31, 2004             $(85,844)    $ 2,278,332     $ 2,192,488
                                       =========    ===========     ===========


See accompanying notes to financial statements.


DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2004
--------------------------------------------------------------------------------


                                            2004          2003          2002

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                             $ 1,248,404   $ 1,291,728   $ 1,294,109
 Adjustments to reconcile net income
  to net cash provided by
  operating activities:
  Depreciation                                2,386
 Changes in assets and liabilities:
  Other assets                                  945        (6,380)       14,075
  Incentive management fee
  payable to general partners                (4,173)       (7,932)       27,093
  Property management fees payable            2,813           175          (850)
  Customer deposits and
   other liabilities                         10,238                     (23,885)
  Capital lease obligations                 (11,250)
                                         -----------   -----------   -----------
  Net cash provided by operating
  activities                              1,249,363     1,277,591     1,310,542


CASH FLOWS USED IN INVESTING
 ACTIVITIES- Additions to property          (23,858)

CASH FLOWS USED IN FINANCING ACTIVITIES -
Distributions to partners                (1,284,378)   (1,100,643)   (1,343,293)

                                        -----------   -----------   ------------
NET (DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS                            (58,873)      176,948       (32,751)

CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR                        674,918       497,970       530,721
                                        -----------   -----------   ------------
CASH AND CASH EQUIVALENTS,
AT END OF YEAR                          $   616,045   $   674,918   $   497,970
                                        ===========   ===========   ============

NON CASH INVESTING ACTIVITIES

Acquisition of trucks utilizing capital leases        $157,604


See accompanying notes to financial statements.


DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 2004


1.      GENERAL


        DSI Realty Income Fund VII, a California Real Estate Limited Partnership
        (the "Partnership"),  has two general partners (DSI Properties, Inc. and
        Diversified Investors Agency) and limited partners owning 24,000 limited
        partnership  units which were  purchased  for $500 a unit.  The  general
        partners have made no capital  contributions to the  Partnership and are
        not  required  to make  any  capital  contributions in the  future.  The
        Partnership  has a maximum  life of 50 years and was formed on August 1,
        1983  under  the  California  Uniform  Limited  Partnership  Act for the
        primary purpose of acquiring and operating real estate.

        The  Partnership  has acquired six  mini-storage  facilities  located in
        Chico,  Fairfield,  La Verne, and Riverside,  California and Ft. Collins
        and  Littleton,  Colorado.  All  facilities  were  purchased  from  Dahn
        Corporation ("Dahn"). Dahn is not affiliated with the Partnership.  Dahn
        is affiliated with other partnerships in which DSI Properties, Inc. is a
        general  partner.  The  mini-storage  facilities  are  operated  for the
        Partnership by Dahn under various agreements that are subject to renewal
        annually. Under the terms of the agreements, the Partnership is required
        to pay Dahn a property  management fee equal to 5% of gross revenue from
        operations, defined as the entire amount of all receipts from the rent-
        ing or leasing of storage compartments and sale of locks.

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


        Cash and Cash  Equivalents - The  Partnership  classifies its short-term
        investments  purchased with an original maturity of three months or less
        as cash and cash equivalents.

        Property  and  Depreciation  -  Property was  recorded  at  cost  and is
        composed primarily of mini-storage facilities. The facilities' buildings
        are fully depreciated.  Building improvements are depreciated over a
        five year period.  Property under capital leases is amortized over the
        lives of the the respective leases or the estimated useful lives of the
        assets.

        Income  Taxes - No  provision  has  been  made for  income  taxes in
        the  accompanying  financial  statements.  The taxable  income or loss
        of the Partnership is allocated to each partner in accordance with the
        terms of the Agreement of Limited  Partnership.  Each  partner's  tax
        status,  in turn,  determines the appropriate  income tax for its
        allocated share of the Partnership's taxable income or loss.  The net
        difference between the basis of the Partnership's assets and liabilities
        for federal income tax purposes and as reported for financial statement
        purpose is  $92,008.

        Revenues - Rental revenue is recognized using the accrual method
        based on contractual amounts provided for in the lease agreements,
        which approximates recognition on a straight line basis.  The term
        of the lease agreements are usually less than one year.

        Net  Income  per  Limited  Partnership  Unit - Net  income  per  limited
        partnership  unit is computed by dividing  net income  allocated  to the
        limited partners by the weighted  average number of limited  partnership
        units outstanding during each year.

        Estimates - The  preparation of financial  statements in conformity with
        accounting principles generally accepted in the United States of America
        requires the Partnership's management to make  estimates and assumptions
        that affect the reported amounts  of  assets  and  liabilities  at  the
        date  of  the financial statements and the reported  amounts of revenues
        and expenses during the reporting period.  Actual results could differ
        from those  estimates.

        Impairment of Long-Lived Assets - The Partnership regularly reviews
        long-lived assets for impairment whenever events or changes in
        circumstances indicate that the carrying amount of the asset may not
        be recoverable.  If the sum of the expected undiscounted future cash
        flow is less than the carrying amount of the asset, the Partnership
        would recognize an impairment loss to the extent the carrying value
        exceeded the fair market value of the property.  No impairment losses
        were required in 2004, 2003 and 2002.

        Fair Value of Financial Instruments - The Partnership's financial
        instruments consist primarily of cash and cash equivalents, receivables,
        accounts payable and accrued liabilities.  The carrying values of all
        financial instruments are representative of their fair values due to
        their short-term maturities.

        Concentrations of Credit Risk - Financial instruments that potentially
        subject the Partnership to concentrations of credit risk consist
        primarily of cash and cash equivalents and rent receivables. The
        Partnership places its cash and cash equivalents with high credit
        quality institutions.


3.      PROPERTY

        The total cost of property and accumulated depreciation is as follows
        as of December 31:

                                                  2004            2003

       Land                                   $ 2,089,800     $ 2,089,800
       Buildings and improvements               7,770,140       7,746,282
                                              -----------     -----------

       Total                                    9,859,940       9,836,082
       Less accumulated depreciation           (7,748,668)     (7,746,282)
                                              -----------     -----------

       Total                                  $ 2,111,272     $ 2,089,800

       Rental trucks under capital leases         157,604
                                              -----------     -----------
       Property-net                           $ 2,268,876     $ 2,089,800
                                              ===========     ===========

      The rental trucks under capital leases were not placed into service
      until January 2005 and therefore no depreciation expense was recorded
      during 2004.

      The Partnership leases certain vehicles under agreements that meet the
      criteria for classification as capital leases which expire in 2008.
      Future minimum lease payments under these capital leases at December 31,
      2004 are summarized  as follows:

      2005                                              $40,500
      2006                                               40,500
      2007                                               40,500
      2008                                               40,500
                                                        -------
      Total future minimum payment obligations          162,000
      Less interest portion                              15,646
                                                        -------
      Present value of net minimum lease payments      $146,354
                                                        =======



4.      ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNER MANAGEMENT FEES


        Under the Agreement of Limited Partnership,  the general partners are
        to be  allocated  1% of the net profits or losses from  operations
        and the limited  partners are to be allocated  the balance of the net
        profits or losses  from  operations  in  proportion  to their  limited
        partnership interests.   The  general  partners  are  also  entitled to
        receive  a percentage,  based on a predetermined  formula, of any cash
        distribution from the  sale,  other  disposition,  or  refinancing  of
        a real  estate project.

        In addition, the general partners are entitled to receive an incentive
        management fee for supervising the operations of the Partnership. The
        fee is to be paid in an  amount  equal to 9% per  annum of the  cash
        available for distribution on a cumulative basis, calculated as  cash
        generated from operations less capital expenditures.

5.      BUSINESS SEGMENT INFORMATION

        The following disclosure about segment reporting of the Partnership is
        made in accordance with the requirements of SFAS No. 131, Disclosures
        about Segments of an Enterprise and Related Information.  The Partner-
        ship operates in a single segment; storage facility operations, under
        which the Partnership rents its storage facilities to its customers
        on a need basis and charges rent on a predetermined rate.



DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)

REAL ESTATE AND ACCUMULATED DEPRECIATION
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                    Costs Capitalized
                                 Initial Cost to      Subsequent to    Gross Amount at Which Carried
                                   Partnership         Acquisition           at Close of Period
                               -------------------  -----------------  -----------------------------
                                        Buildings                               Buildings                         Date
                                           and       Improve- Carrying             and                    Accum.   of   Date
Description       Encumbrances   Land  Improvements    ments   Costs     Land   Improvements   Total     Deprec.  Const. Acq. Life

MINI-U-STORAGE
<S>                   <C>     <C>       <C>         <C>            <C>         <C>        <C>         <C>         <C>   <C>   <C>

Chico, CA             None    $209,700  $  932,373   $ 9,702         $209,700  $  942,075  $1,151,775    939,346  09/84 12/83 15 Yrs
Fairfield, CO         None     264,500   1,267,896    15,666          264,500   1,283,562   1,548,062  1,281,206  08/84 01/84 15 Yrs
Fort Collins, CO      None     375,100   1,396,960    13,128          375,100   1,410,088   1,785,188  1,406,054  12/84 05/84 15 Yrs
Riverside, CA         None     356,000   1,391,210    19,029          356,000   1,410,239   1,766,239  1,405,971  12/84 06/84 15 Yrs
La Verne, CA          None     453,250   1,243,974    15,874          453,250   1,259,848   1,713,098  1,255,604  03/85 08/84 15 Yrs
Littleton, CO         None     431,250   1,423,811    40,517          431,250   1,464,328   1,895,578  1,460,487  10/85 05/85 15 Yrs
                              --------  ----------   -------         --------  ----------  ---------- ----------
                            $2,089,800  $7,656,224  $113,916       $2,089,800  $7,770,140 $ 9,859,940 $7,748,668
                            ==========  ==========  ========       ==========  ========== =========== ==========
</TABLE>

                                                     Real Estate     Accumulated
                                                        at Cost     Depreciation

               Balance, January 1, 2002               $ 9,836,082     $7,746,282
                 Additions                                  -               -
                                                      -----------     ----------
               Balance, December 31, 2002             $ 9,836,082     $7,746,282
                 Additions                                  -               -
                                                      -----------     ----------
               Balance, December 31, 2003             $ 9,836,082     $7,746,282
                 Additions                                 23,858          2,386
                                                      -----------     ----------
               Balance, December 31, 2004             $ 9,859,940     $7,748,668
                                                      ===========     ==========



<PAGE>


                                    EXHIBIT 2

                                 March 14, 2005

                      ANNUAL REPORT TO LIMITED PARTNERS OF

                           DSI REALTY INCOME FUND VII

Dear Limited Partner:

     This report  contains the  Partnership's  balance sheets as of December 31,
2004 and 2003, and the related statements of income, changes in partners' equity
and cash flows for each of the three years ended December 31, 2004 accompanied
by an  independent  auditors'  report.  The  Partnership  owns  six  mini-
storage  facilities.  The Partnership's  properties were each purchased for
all cash and funded solely from subscriptions for limited partnership  interests
without the use of mortgage financing.

     Your attention is directed to the section entitled Management's  Discussion
and Analysis of Financial  Condition and Results of  Operations  for the General
Partners'  discussion and analysis of the financial statements and operations of
the Partnership.

     Average  occupancy levels for each of the  Partnership's six properties for
the years ended December 31, 2004 and December 31, 2003 were as follows:

Location of Property               Average Occupancy          Average Occupancy
                                   Levels for the             Levels for the
                                   Year Ended                 Year Ended
                                   Dec. 31, 2004              Dec. 31, 2003


Chico, California                        84%                       85%

Fairfield, California                    85%                       88%

Ft. Collins, Colorado                    83%                       82%

LaVerne, California                      86%                       88%

Littleton, Colorado                      77%                       78%

Riverside, California                    87%                       89%


     We will keep you informed of the  activities  of DSI Realty Income Fund VII
as  they  develop.  If  you  have  any  questions,  please  contact  us at  your
convenience at (562) 493-3022.

     If you would like a copy of the  Partnership's  Annual  Report on Form 10-K
for the year ended  December  31, 2004 which was filed with the  Securities  and
Exchange  Commission (which report includes the enclosed Financial  Statements),
we will forward a copy of the report to you upon written request.

                                                     Very truly yours,

                                                     DSI REALTY INCOME FUND VII
                                                     By:  DSI Properties, Inc.



                                                   By___________________________
                                                     ROBERT J. CONWAY, President


                          CERTIFICATIONS

    I, Robert J. Conway, certify that:


    1.  I have reviewed this annual report on Form 10-K of DSI Realty Income
    Fund VII;

    2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period cover-
    ed by this annual report.

    3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report;

    4.  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:

         a)  designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our super-
         vision, to ensure that material information relating to the registrant,
         including its consolidated subsidiaries, is made known to us by others
         within those entities, particularly during the period in which this
         annual report is being prepared;

         b)  evaluated the effectiveness of the registrant's disclosure controls
         and procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures as of the end
         of the period covered by this report based on such evaluation; and

         c)  disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of our annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

    5.  The registrant's other certifying officers and I have disclosed based
    on our most recent evaluation of internal control over financial reporting,
    to the registrant's auditors:

         a)  all significant deficiencies and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to affect the registrant's ability to record, pro-
         cess, summarize and report financial information; and

         b)  any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's in-
         ternal controls over financial reporting.


    Date:  March 14, 2005



    Robert J. Conway
    Chief Executive Officer



                          CERTIFICATIONS



    I, Richard P. Conway, certify that:

    1.  I have reviewed this annual report on Form 10-K of DSI Realty Income
    Fund VII;

    2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period cover-
    ed by this annual report.

    3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report;

    4.  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have:

         a)  designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our super-
         vision, to ensure that material information relating to the registrant,
         including its consolidated subsidiaries, is made known to us by others
         within those entities, particularly during the period in which this
         annual report is being prepared;

         b)  evaluated the effectiveness of the registrant's disclosure controls
         and procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures as of the end
         of the period covered by this report based on such evaluation; and

         c)  disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of our annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

    5.  The registrant's other certifying officers and I have disclosed based
    on our most recent evaluation of internal control over financial reporting,
    to the registrant's auditors:

         a)  all significant deficiencies and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to affect the registrant's ability to record, pro-
         cess, summarize and report financial information; and

         b)  any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's in-
         ternal controls over financial reporting.


    Date:  March 14, 2005



    Richard P. Conway
    Vice President




                       CERTIFICATION PURSUANT TO
                        18 U.S.C. SECTION 1350,
                        AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



     In connection with the Annual Report of DSI Realty Income Fund VII (the
"Partnership") on Form 10-K for the period ending December 31, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.



                                    Robert J. Conway
                                    Chief Executive Officer
                                    March 14, 2005






                       CERTIFICATION PURSUANT TO
                        18 U.S.C. SECTION 1350,
                        AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



     In connection with the Annual Report of DSI Realty Income Fund VII (the
"Partnership") on Form 10-K for the period ending December 31, 2004 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.



                                    Richard P. Conway
                                    Vice President
                                    March 14, 2005