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, 2003.
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,
     2003, incorporated by reference to Form 10-K, Part II.

Item 11.  Registrant's  Financial  Statements for its fiscal year ended December
     31, 2003, 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, 2003, 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, 2003 and December 31, 2002 were as follows:


Location of Property       Average Occupancy         Average Occupancy Level
                           for the                   Level for the
                           Year Ended                Year Ended
                           Dec. 31, 2003             Dec. 31, 2002

Chico, California               86%                       89%

Fairfield, California           89%                       91%

Ft. Collins, Colorado           81%                       81%

LaVerne, California             90%                       90%

Littleton, Colorado             81%                       80%

Riverside, California           91%                       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, 2003 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 883 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 $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 and $13.23 per Limited Partnership Unit were declared
and paid each quarter for the year ended December 31, 2001.




Item 6.  SELECTED FINANCIAL DATA
         FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, 2001, 2000, and 1999
         --------------------------------------------------------------------
                     2003         2002         2001         2000        1999
                     ----         ----         ----         ----        ----

TOTAL REVENUES
AND OTHER
INCOME            $2,577,993   $2,614,292   $2,597,851   $2,351,050   $2,179,398

TOTAL
EXPENSES           1,286,265    1,320,183    1,210,651    1,237,093    1,556,719
                  ----------   ----------   ----------   ----------   ----------

NET
INCOME            $1,291,728   $1,294,109   $1,387,200   $1,113,957   $  622,679
                  ==========   ==========   ==========   ==========   ==========

TOTAL
ASSETS            $2,833,436   $2,650,108   $2,696,934   $2,603,230   $2,751,925
                  ==========   ==========   ==========   ==========   ==========

CASH FLOWS FROM:
(USED IN):
OPERATING         $1,277,393   $1,310,542   $1,344,360   $1,231,203   $1,191,273
INVESTING               -            -            -         (5,388)     (23,425)
FINANCING         (1,100,643)  (1,343,293)  (1,282,481)  (1,281,976) (1,101,945)

NET INCOME
PER LIMITED
PARTNERSHIP
UNIT              $    53.28   $    53.38   $    57.22   $    45.95   $    25.69
                  ==========   ==========   ==========   ==========   ==========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT              $    45.40   $    55.41   $    52.90   $    52.88   $    45.46
                  ==========   ==========   ==========   ==========   ==========



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

                              RESULTS OF OPERATIONS

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.


2002 COMPARED TO 2001

     Total revenues increased from $2,593,700 in 2001 to $2,613,254 in 2002,
while total expenses increased from $1,210,651 to $1,320,183 and other income
decreased from $4,151 to $1,038 resulting in a decrease in net income from
$1,387,200 to $1,294,109.  Rental revenue remained constant, as a decrease in
occupancy rates was offset bv higher unit rental rates.  Occupancy levels for
the Partnership's six mini-storage facilities averaged 86.2% for the year
ended December 31, 2002 and 90.0% for the year ended December 31, 2001.  The
Partnership continued its advertising campaign to attract and keep new
tenants in its various mini-storage facilities. The approximate $42,300 (5.3%)
increase in operating expenses was due primarily to increases in yellow pages
advertising costs, real estate tax and workers compensation insurance expenses,
partially offset by decreases in repairs and maintenance and security alarm
services expenses.  General and administrative expenses increased approximately
$61,600 (41.4%) primarily as a result of increases in legal and professional
equipment and computer lease and office supplies expenses.  General Partners'
incentive management fees remained relatively constant.  Property management
fees, which are based on revenue, also 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  decreased  approximately
$33,000 (2.5%) in 2003 compared to 2002 primarily due to the decrease in net
income and incentive management fee payable to general partners and an increase
in other assets.  Net cash provided by operating activities decreased approxi-
mately $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 1.0%, 3.0%, and 2.5% of capital contributed by Limited Part-
ners, were declared and paid on December 15, 2003, 2002, and 2001, respectively.

    The Partnership has no material commitments for capital expenditures.

     On April 22, 2002, the General Partners received a copy of a hostile tender
offer from MacKenzie Patterson, Inc. and associated corporations and limited
partnerships to purchase all of the Units in the Partnership.  This offer was
also filed with the Securities and Exchange Commission on the same date.  The
General Partners determined that the hostile tender offer was not in the best
interests of the Limited Partners, that the offer was grossly inadequate given
the performance history of the Limited Partnership and the inherent value of
the Units, and recommended that the Limited Partners reject the hostile tender
offer and not tender their Units pursuant thereto.  The offer was subsequently
increased and extended to June 30, 2002 and again to July 22, 2002.  The
General Partners' initial determination regarding the offer has not changed.
Prior to the expiration date of the offer, Limited Partners tendered 74 Units
representing 0.308% of the outstanding Units of the Partnership.

     The Limited Partners have  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 has rejected all preliminary attempts to halt
the implementation of the amendment.  Subsequently, the dissident Limited
Partners who initiated the legal proceedings decided no 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, 2003 and
2002 was as follows:

                                            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



                                            2002 QUARTER ENDED
                                            ------------------

                           March 31   June 30   September 30    December 31

Total revenues             $671,743   $637,269   $658,822        $645,420

Net income                  354,504    306,910    338,964         293,731

Net income per
  limited partnership unit $  14.62   $  12.66   $  13.98        $  12.12

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






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.

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

     None.

                                    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, 2003,  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 70 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 75 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 81 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, 2003,  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,  2003,  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, 2003,  attached hereto as Exhibit l and incorporated herein by this
reference.

                                     PART IV

Item 14 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, 2003,  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, 2003.

     (b)  No reports on Form 8K were filed during the fiscal year ended December
          31, 2003.

                                   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, 2004
  ROBERT J. CONWAY, President
  (Chief Executive Officer, Chief
  Financial Officer, and Director)



By____________________________      Dated:  March 31, 2004
  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, 2004
  ROBERT J. CONWAY, President,
  Chief Executive Officer, Chief
  Financial Officer, and Director



By___________________________       Dated:  March 31, 2004
  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, 2003, 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, 2003

-----------------------------------------------------------------------------
                     2003         2002         2001         2000        1999
                     ----         ----         ----         ----        ----

TOTAL REVENUES
AND OTHER
INCOME            $2,577,993   $2,614,292   $2,597,851   $2,351,050   $2,179,398

TOTAL
EXPENSES           1,286,265    1,320,183    1,210,651    1,237,093    1,556,719
                  ----------   ----------   ----------   ----------   ----------

NET
INCOME            $1,291,728   $1,294,109   $1,387,200   $1,113,957   $  622,679
                  ==========   ==========   ==========   ==========   ==========

TOTAL
ASSETS            $2,833,436   $2,650,108   $2,696,934   $2,603,230   $2,751,925
                  ==========   ==========   ==========   ==========   ==========

CASH FLOWS FROM:
(USED IN):
OPERATING         $1,277,393   $1,310,542   $1,344,360   $1,231,203   $1,191,273
INVESTING                -           -            -         (5,388)     (23,425)
FINANCING         (1,100,643)  (1,343,293)  (1,282,481)  (1,281,976) (1,101,945)

NET INCOME
PER LIMITED
PARTNERSHIP
UNIT              $    53.28   $    53.38   $    57.22   $    45.95   $    25.69
                  ==========   ==========   ==========   ==========   ==========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT              $    45.40   $    55.41   $    52.90   $    52.88   $    45.46
                  ==========   ==========   ==========   ==========   ==========




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, 2003.

                                                         Net          Partners'
                                                        Income         Equity

Per financial statements                             $ 1,291,728    $ 2,228,462
Excess book depreciation                                 (63,942)       (78,446)
Accrued property taxes                                       (86)       (97,368)
Deferred rental revenues                                                 85,723
Accrued distributions to partners                                       242,415
Accrued incentive management fees                                       221,117
Acquisition costs capitalized
  for tax purposes                                                      218,274
State taxes                                               (9,734)
                                                     -----------    -----------
Per Partnership income tax return                    $ 1,217,966    $ 2,820,177
                                                     ===========    ===========
Net taxable income per
limited partnership unit                             $     50.24
                                                     ===========



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


INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE


                                                                            Page


   Independent Auditors' Report                                              F-1

FINANCIAL STATEMENTS:

    Balance Sheets at December 31, 2003 and 2002                             F-2

    Statements of Income for the Three Years Ended December 31, 2003         F-3

    Statements of Changes in Partners' Equity (Deficit)for the Three Years
    Ended December 31, 2003                                                  F-4

    Statements of Cash Flows for the Three Years Ended December 31, 2003     F-5

    Notes to Financial Statements                                            F-6

SUPPLEMENTAL SCHEDULE:

    Schedule IIII - Real Estate and Accumulated Depreciation                 F-9

SCHEDULES OMITTED:

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.


CONTROLS AND PROCEDURES

     Within 90 days prior to the date of this report, the Partnership evaluated
     the effectiveness of its disclosure controls and procedures.  This evalu-
     ation 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 inform-
     ation required to be disclosed by the Parnership it 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.



INDEPENDENT AUDITORS' REPORT
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, 2003
and 2002,  and the related  statements of income,  changes in partners' equity
(deficit), and cash flows for each of the three years in the period ended
December 31, 2003.  Our audits also included the financial statement schedule
listed in the Index at Item 14.  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  generally  accepted in the
United States of America.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements and
financial statement schedule are free of material misstatement.  An audit in-
cludes examining, on a test basis, evidence supporting the amounts and dis-
closures in the financial statements.  An audit also includes assessing the
accounting  principles  used and significant  estimates  made by management,
as well as evaluating 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,
2003 and 2002,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  2003,  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 20, 2004




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

BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------


ASSETS                                                  2003             2002

CASH AND CASH EQUIVALENTS                           $   674,918      $  497,970

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

OTHER ASSETS                                             68,718          62,338
                                                    -----------      -----------
TOTAL                                               $ 2,833,436      $2,650,108
                                                    ===========      ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

LIABILITIES:
Distribution due partners (Note 4)                  $   242,424      $   242,424
Incentive management fee payable to
general partners (Note 4)                               254,576          262,508
Property management fees payable                         10,253           10,078
Customer deposits and other liabilities                  97,721           97,721
                                                    -----------      -----------
Total liabilities                                       604,974          612,731
                                                    -----------      -----------
PARTNERS' EQUITY (DEFICIT)(Notes 4):
General partners                                        (85,484)        (87,395)
Limited partners (24,000 limited
partnership units outstanding
at December 31, 2003 and 2002)                        2,313,946       2,124,772
                                                   ------------      -----------
Total partners' equity                                2,228,462       2,037,377
                                                   ------------      -----------
TOTAL                                               $ 2,833,436     $ 2,650,108
                                                   ============      ===========

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, 2003
--------------------------------------------------------------------------------


                                               2003         2002         2001

REVENUES:
Rental                                      $2,577,321   $2,613,254   $2,593,700
                                            ----------   ----------   ----------
EXPENSES:
 Depreciation
 Operating                                     781,921      839,143      796,881
 General and administrative                    248,000      210,413      148,844
 General partners' incentive
  management fee (Note 4)                      127,790      140,588      136,432
 Property management fee                       128,554      130,039      128,494
                                            ----------   ----------   ----------
Total expenses                               1,286,265    1,320,183    1,210,651
                                            ----------   ----------   ----------
OPERATING INCOME                             1,291,056    1,293,071    1,383,049

OTHER INCOME-
 Interest income                                   672        1,038        4,151
                                            ----------   ----------   ----------
NET INCOME                                  $1,291,728   $1,294,109   $1,387,200
                                            ==========   ==========   ==========

AGGREGATE NET INCOME ALLOCATED
TO (Note 4):
Limited partners                            $1,278,811   $1,281,168   $1,373,328
General partners                                12,917       12,941       13,872
                                            ----------   ----------   ----------
TOTAL                                       $1,291,728   $1,294,109   $1,387,200
                                            ==========   ==========   ==========
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Notes 2 and 4)                        $    53.28   $    53.38   $    57.22
                                            ==========   ==========   ==========

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, 2003
--------------------------------------------------------------------------------


                                         General       Limited
                                        Partners       Partners         Total

BALANCE, JANUARY 1, 2001               $(87,950)    $ 2,069,792     $ 1,981,842

 Net income                              13,872       1,373,328       1,387,200

 Distributions                          (12,825)     (1,269,656)     (1,282,481)
                                        -------     -----------     -----------
BALANCE, DECEMBER 31, 2001             $(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
                                       =========    ===========     ===========


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, 2003
--------------------------------------------------------------------------------


                                            2003          2002          2001

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                             $ 1,291,728   $ 1,294,109   $ 1,387,200
 Adjustments to reconcile net income
  to net cash provided by
  operating activities:
  Depreciation
 Changes in assets and liabilities:
  Other assets                               (6,380)       14,075       (31,825)
  Incentive management fee
  payable to general partners                (7,932)       27,093           (96)
  Property management fees payable              175          (850)          281
  Customer deposits and
   other liabilities                                      (23,885)      (11,200)
                                         -----------   -----------   -----------
  Net cash provided by operating
  activities                              1,277,591     1,310,542     1,344,360


CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners                (1,100,643)   (1,343,293)   (1,282,481)

                                        -----------   -----------   ------------
NET(DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS                            176,948       (32,751)       61,879

CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR                        497,970       530,721       468,842
                                        -----------   -----------   ------------
CASH AND CASH EQUIVALENTS,
AT END OF YEAR                          $   674,918   $   497,970   $   530,721
                                        ===========   ===========   ============

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, 2003


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  that were  purchased  for $500 a unit.  The  general
        partners have made no capital  contribution  to the  Partnership and are
        not  required  to make  any  capital  contribution  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 equivalents.

        Property  and  Depreciation  -  Property was  recorded  at  cost  and is
        composed primarily of mini-storage facilities. The facilities' buildings
        and improvements were fully depreciated.

        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  $73,762.

        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 2003, 2002 and 2001.

        Fair Value of Financial Instruments - The Partnership's financial
        instruments consist primarily of cash, 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 equivalents with high credit quality
        institutions.

        Impact of Recent Accounting Pronouncements - In 2002, the Partnership
        adopted the following pronouncements:  Statements of Financial Account-
        ing Standards ("SFAS") No. 144, Accounting for Impairment or Disposal
        of Long-Lived Assets; SFAS No 145, Rescission of FASB Statements No. 4,
        44, 64 and Amendment of FASB Statement No. 13, and Technical Correc-
        tions.  The adoption of these pronouncements did not have a material
        impact on the Partnership's financial position or results of operations.
        The Partnership believes the adoption of Financial Accounting Standards
        Board Interpretation No. 46, Consolidation of Variable Interest Entities
        will not have a material impact on the financial statements.

3.      PROPERTY

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

                                                  2003            2002

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

       Total                                    9,836,082       9,836,082
       Less accumulated depreciation           (7,746,282)     (7,746,282)
                                              -----------     -----------

       Property, net                          $ 2,089,800     $ 2,089,800
                                              ===========     ===========


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   $ 6,670         $209,700  $  939,043  $1,148,743    939,043  09/84 12/83 15 Yrs
Fairfield, CO         None     264,500   1,267,896    13,047          264,500   1,280,943   1,545,443  1,280,943  08/84 01/84 15 Yrs
Fort Collins, CO      None     375,100   1,396,960     8,643          375,100   1,405,603   1,780,703  1,405,603  12/84 05/84 15 Yrs
Riverside, CA         None     356,000   1,391,210    14,289          356,000   1,405,499   1,761,499  1,405,499  12/84 06/84 15 Yrs
La Verne, CA          None     453,250   1,243,972    11,162          453,250   1,255,136   1,708,386  1,255,136  03/85 08/84 15 Yrs
Littleton, CO         None     431,250   1,423,811    36,247          431,250   1,460,058   1,891,308  1,460,058  10/85 05/85 15 Yrs
                              --------  ----------   -------         --------  ----------  ---------- ----------
                            $2,089,800  $7,656,224  $ 90,058       $2,089,800  $7,746,282  $9,836,082 $7,746,282
                            ==========  ==========  ========       ==========  ========== =========== ==========
</TABLE>

                                                     Real Estate     Accumulated
                                                        at Cost     Depreciation

               Balance, January 1, 2001               $ 9,836,082     $7,746,282
                 Additions                                  -              -
                                                      -----------     ----------
               Balance, December 31, 2001             $ 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
                                                      ===========     ==========



<PAGE>

                                    EXHIBIT 2

                                 March 20, 2004

                      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,
2003 and 2002, and the related statements of income, changes in partners' equity
and cash flows for each of the three years in the period ended December 31, 2003
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, 2003 and December 31, 2002 were as follows:

Location of Property               Average Occupancy          Average Occupancy
                                   Levels for the             Levels for the
                                   Year Ended                 Year Ended
                                   Dec. 31, 2003              Dec. 31, 2002


Chico, California                        86%                       89%

Fairfield, California                    89%                       91%

Ft. Collins, Colorado                    81%                       81%

LaVerne, California                      90%                       90%

Littleton, Colorado                      81%                       80%

Riverside, California                    91%                       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, 2003 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-14 and 15d-14) for the registrant and have:

         a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its con-
         solidated 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 as of a date within 90 days prior to the filing date of
         this annual report (the "Evaluation Date"); and

         c)  presented in this annual report our conclusions about the effec-
         tiveness of the disclosure controls and procedures based on our evalu-
         ation as of the Evaluation Date;

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

         a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to re-
         cord, process, summarize and report financial data and have identified
         for the registrant's auditors any material weaknesses in internal
         controls; 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; and

    6.  The registrant's other certifying officers and I have indicated in this
    annual report whether there were significant changes in internal controls
    or in other factors that could significantly affect internal controls sub-
    sequent to the date of our most recent evaluation, including any corrective
    actions with regard to significant deficiencies and material weaknesses.

    Date:  March 20, 2004



    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-14 and 15d-14) for the registrant and have:

         a)  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its con-
         solidated 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 as of a date within 90 days prior to the filing date of
         this annual report (the "Evaluation Date"); and

         c)  presented in this annual report our conclusions about the effec-
         tiveness of the disclosure controls and procedures based on our evalu-
         ation as of the Evaluation Date;

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

         a)  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to re-
         cord, process, summarize and report financial data and have identified
         for the registrant's auditors any material weaknesses in internal
         controls; 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; and

    6.  The registrant's other certifying officers and I have indicated in this
    annual report whether there were significant changes in internal controls
    or in other factors that could significantly affect internal controls sub-
    sequent to the date of our most recent evaluation, including any corrective
    actions with regard to significant deficiencies and material weaknesses.

    Date:  March 20, 2004



    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, 2003 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 20, 2004






                       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, 2003 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 20, 2004