UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K



[x]
Annual Report Pursuant to Section 13 or 15 (d) of the Securities and
Exchange Act of 1934

For
the fiscal year ended December 31, 2008



[
] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934

For
the transition period from ________________ to _______________



Commission
File No. 2-83291.



DSI
REALTY INCOME FUND VII

a
California Limited Partnership

|California                                                         |  | 95-3871044                              
|------------------------------------------------------------------ |  | ----------------------------------------
|(State
				or other jurisdiction of incorporation or organization) |  | (I.R.S.
				Employer Identification No.)



6700
E. Pacific Coast Hwy., Long Beach, California 90803

(Address
of principal executive offices)



Registrant’s
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

Indicate
by check mark if registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate
by check mark if the issuer is not required to file reports pursuant
to Section 13 or Section 15(d) of the Exchange Act.

Yes
[ ]  No [X]

Indicate
by check mark  whether the  issuer (l) has filed all reports required
to be filed by Section 13 or 15(d) of the  Exchange  Act during  the
past 12 months  (or for such  shorter  period  that the registrant
was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes
[X]  No [ ]

Indicate
by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-B 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]

Indicate
by check mark whether the
registrant is
a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.

Large
accelerated filer [  ] Accelerated filer [  ]  Non-accelerated
filer [  ] Smaller reporting company [X]

Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).     Yes [ ]  No [X]

Page
1



Certain
statements contained in this discussion or elsewhere in this report
may be deemed “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 and
Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Words and phrases such as
“expects”, “anticipates”, “intends”,
“plans”, “believes”, “seeks”,
“estimates”, “designed to achieve”,
variations of such words and similar expressions are intended to
identify such forward-looking statements, which generally are not
historical in nature. All statements that address operating
performance, events or developments that we expect or anticipate will
occur in the future – including statements relating to
rent and occupancy growth, general conditions in the geographic areas
where we operate – are forward-looking statements. These
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to
predict.

Although
we believe the expectations reflected in any forward-looking
statements are based on reasonable assumptions, we can give no
assurance that our expectations will be attained and therefore,
actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements. Many of
the factors that may affect outcomes and results are beyond our
ability to control.

PART I



ITEM
l.  BUSINESS

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 (1%) 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.

The
Partnership 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 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  the Partnership 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 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 the
Partnership.  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.

Please
refer to the discussion appearing elsewhere herein under the caption
Management's Discussion and Analysis of Financial Condition and
Results of Operations for a detailed analysis of the results of
operations of the Partnership's properties.

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, the Partnership's
business is not affected by the change in seasons.



ITEM
1A. RISK FACTORS

Not
required.

Page
2

ITEM
1B. UNRESOLVED STAFF COMMENTS

None.



ITEM
2.  PROPERTIES

The
Partnership owns a fee interest in the
following
mini-storage facilities, none of which are subject to long-term
indebtedness.  Please refer to the discussion under “Business”
for a discussion of the average occupancy rate for each property
owned by the Partnership.  The following table sets forth information
regarding properties owned by the Partnership.

|                   |         |        | 2008         | 2007        
|------------------ | ------- | ------ | ------------ | ------------
|                   | Parcel  |        | (Average)    | (Average)   
|                   | Size    | Date   | Rentable     | Revenue     
|Location           | (Acres) | Opened | Sq.
					Ft. | Sq.
					Ft.
|Chico, CA          | 1.97    | Jul-84 | 38,795       | 8.04        
|La Verne,
					CA  | 2.78    | Apr-85 | 52,210       | 10.89       
|Littleton,
					CO | 3.07    | Oct-85 | 45,780       | 9.39        
|Riverside,
					CA | 2.92    | Jan-85 | 60,928       | 7.86        
|Fairfield,
					CA | 2.29    | Aug-84 | 41,010       | 11.78       



ITEM
3.  LEGAL PROCEEDINGS

The
Partnership is not a party to any material pending legal proceedings.



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

There
were no matters submitted to a vote of security holders during 2008.



Page
3

PART II



ITEM
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market
InformationThe
Partnership is a limited partnership and thus has no common stock. 
There is no established trading market for limited partnership
interests in the Partnership and it is not anticipated that any such
public market will develop.The Limited Partnership Agreement
effectively prevents the transfer of Limited Partnership Interests
except under very limited circumstances.  In order to transfer a
Limited Partner­ship Interest, a Limited Partner must obtain the
consent of the General Partners of the Partnership, which have the
absolute right to refuse any request for a transfer. In addition, the
proposed transferee must meet all applicable suitability standards
and agree to be bound by the Limited Partnership Agreement.



Approximate
Number of Security Holders

As
of December 31, 2008, there wereapproximately
867holders of Limited Partnership Interests.



Distributions

Average
cash distributions of $49.11 per Limited Partnership Unit were
declared and paid each quarter for the year ended December 31, 2008
and $11.40per
Limited Partnership Unit were declared and paid each quarter for the
year ended December 31, 2007. It is the Partnership expectation that
distributions will continue to be paid in the future.



ITEM
6. SELECTED FINANCIAL DATA

Not
Required.



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



Critical
Accounting Policies

Revenue
recognition - 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

2008
COMPARED TO 2007

Total
revenues decreased from $2,281,692 in 2007 to $2,269,982 in 2008,
while total expenses increased from $1,334,967 to $1,337,988 and
other income decreased from $657 to $537. Net income increased from
$1,170,937 to $4,532,440 primarily as a result of the sale of the
fund’s Fort Collins, CO facility in August, 2008.  Rental
revenues decreased primarily as a result of lower unit rental rates
due to poor economic conditions.Occupancy levels for
the Partnership’s mini-storage facilities averaged 80.1% for
the year 2008 as compared to 82.3% for 2007.  Operating expenses
remained relatively unchanged during 2008.  General and
administrative expenses increased approximately $31,119 (12.0%)
primarily as a result of higher legal and professional, office
supplies and equipment and computer lease expenses.The General Partners’
incentive management fee which is based on cash available for
distribution, decreased as a result of the decrease in net cash
provided by operating activities.

Operating
expenses consist mainly of expenses such as yellow pages and other
advertising, utilities, 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
$400,979 (33.6%) in 2008 compared to 2007 primarily due to the
incentive management fee paid to general partners.

Page
4

Cash
used in investing activities, consists of acquisition of property for
the Partnership's mini storage facilities in 2008 and 2007 and the
sale of the partnership’s Fort Collins, CO facility in 2008.
The Partnership has no material commitments for capital expenditures.

Cash
used in financing activities, as set forth in the statements of cash
flows, has consisted solely of cash distributions to partners in 2008
and 2007 and payments on capital lease obligations.  A special
distribution of 1.0%, of capital contributed by Limited Partners was
declared and paid on December 15, 2007.

Current
economic conditions may have a significant impact on the self storage
industry and our investment portfolio. A recession, more government
intervention and higher taxes could all have a detrimental affect on
the future performance of all properties. With the current crisis in
the housing and lending markets, very few people are moving. Also,
high gasoline prices are affecting people’s discretionary
income and their ability to afford storage.

The
advantage the partnership has is that very few new facilities are
being built. When the financial markets stabilize and the economy
begins to grow, occupancies and income should rebound quickly.

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 a  material  adverse  effect  upon  the  financial
position  of the Partnership.



LONG-TERM
LIABILITIES, CONTRACTUAL OBLIGATIONS,AND
OFF-BALANCE SHEET ARRANGEMENTS

None.



QUARTERLY
FINANCIAL INFORMATION (UNAUDITED)

Summarized
quarterly financial data for the year ended December 31, 2008 was as
follows:

|                                                                             | 2008
			Quarter Ended:
|---------------------------------------------------------------------------- | ----------------------
|                                                                             | March
			31           
|Total revenues                                                               | 691,099               
|Net income                                                                   | 284,908               
|Net
			income per limited
			partnership unit                                |                       
|11.75                                                                        | 12.82                 
|Weighted
			average number
			of
			limited partnership
			units outstanding |                       
|                                                                             |                       
|24,000                                                                       | 24,000                



ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not
Required.



ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DSI
REALTY INCOME FUND VII

(A
California Real Estate Limited Partnership)

INDEX
TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

FINANCIAL
STATEMENTS:								Page

Report
of Independent Registered Public Accounting Firm
			F-1

Balance
Sheet as of December 31, 2008 and 2007
		F-2

Statements
of Income for the Years Ended December 31, 2008 and 2007      		F-3

Statements
of Changes in Partners' Equity (Deficit) for

the
Years Ended December 31, 2008 and 2007                  		F-4

Statements
of Cash Flows for the Years Ended December 31, 2008 and 2007  	F-5

Notes
to Financial Statements
				F-6

SUPPLEMENTAL
SCHEDULE:

Schedule
III - Real Estate and Accumulated Depreciation as of December 31,
2008	F-9

Page
5

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

None.



ITEM
9A. CONTROLS AND PROCEDURES

No
response required



ITEM
9A (T).CONTROLS
AND PROCEDURES

The
Partnership’s management, with the participation of the
principal executive officer and principal financial officer of DSI
Properties, Inc., its General Partner, who are the equivalent of the
Partnership’s principal executive officer and principal
financial officer, respectively, has evaluated the effectiveness of
the Partnership’s disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the“Exchange
Act”))
as of the end of the period covered by this report. Based on such
evaluation, the principal executive officer and principal financial
officer of the General Partner, who are the equivalent of the
Partnership’s principal executive officer and principal
financial officer, respectively, have concluded that, as of the end
of such period, the Partnership’s disclosure controls and
procedures are effective.



Management’s
Report on Internal Control Over Financial Reporting

The
Partnership’s management is responsible for establishing and
maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act as a process designed
by, or under the supervision of, the principal executive and
principal financial officers of the General Partner, who are the
equivalent of the Partnership’s principal executive officer and
principal financial officer, respectively, and effected by the
Partnership’s management and other personnel to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external
purposes in accordance with generally accepted accounting principles
and includes those policies and procedures that:

- pertain
	to the maintenance of records that in reasonable detail accurately
	and fairly reflect the transactions and dispositions of assets;
- provide
	reasonable assurance that transactions are recorded as necessary to
	permit preparation of consolidated financial statements in
	accordance with generally accepted accounting principles, and that
	receipts and expenditures are being made only in accordance with
	authorizations of the Partnership’s management; and
- provide
	reasonable assurance regarding prevention or timely detection of
	unauthorized acquisition, use or disposition of assets that could
	have a material effect on the consolidated financial statements.

Because
of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the
risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

The
Partnership’s management assessed the effectiveness of the
Partnership’s internal control over financial reporting as of December
31, 2008. In
making this assessment, the Partnership’s management used the
criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) inInternal
Control-Integrated Framework.

Based
on their assessment, the Partnership’s management concluded
that, as of December
31, 2008,
the Partnership’s internal control over financial reporting is
effective.

This
annual report does not include an attestation report of the
Partnership’s registered public accounting firm regarding
internal control over financial reporting. Management’s report
was not subject to the attestation by the Partnership’s
registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Partnership to
provide only management’s report in this annual report.

Page
6

Changes
in Internal Control Over Financial Reporting.

There
have been no significant changes in the Partnership’s internal
control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fourth quarter of 2008
that have materially affected, or are reasonably likely to materially
affect, the Partnership’s internal control over financial
reporting.



ITEM
9B. OTHER INFORMATION

None.



PART
III

ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The
Partnership has no directors or executives officers of its own. 
The following biographical information is presented for the officers
of DSI Properties, Inc., a General Partner of the Partnership, as
well as the partners of Diversified Investors Agency, the other
General Partner. The General Partners have principal responsibility
for the Partnership’s affairs.



DSI
Properties, Inc.

Robert
J. Conway,74, has been President, Chief Financial Officer and a member of the
Board of Directors of DSI Properties, Inc. since 1973.He has also
been President and a member of the Board of Directors of Diversified
Securities, Inc., since 1965.  Mr. Conway is also a licensed
California real estate broker, and received a Bachelor of Science
Degree from Marquette University with majors in Corporate Finance and
Real Estate.

Joseph
W. Conway,79, has been Vice President, Treasurer and member of the Board of
Directors of DSI Properties, Inc. since 1973. He has also been
Executive Vice President, Treasurer and a member of the Board of
Directors of Diversified Securities, Inc. since 1965. Mr. Conway
received a Bachelor of Arts Degree from Loras College with a major in
Accounting.

Joseph
W. Stok,85, 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.



Diversified
Investors Agency

Robert
J. Conway and Joseph W. Conway (descriptions above) are the sole
general partners of Diversified Investors Agency.

As
the Partnership has no directors or executive officers, it has no
audit, nominating or other committees.



ITEM
11.  EXECUTIVE COMPENSATION

None
of the directors or officers of the General Partners received any
direct remuneration from the Partnership during the years ended December
31, 2008
or 2007.



ITEM
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS

The
following table sets forth certain information regarding the
beneficial ownership of the Partnership's limited partnership units
as of December 31, 2008 by (i) each person known to beneficially own
more than 5% of the Partnership's limited partnership units, and (ii)
each officer of the General Partners of the Partnership.

Page
7



|Title
				of Class               | Name
				of Beneficial Owner | Number
				of LP Units Beneficially Held (1) | Percent
				of Class
|-------------------------------- | ---------------------------- | -------------------------------------------- | --------------------
|Limited
				Partnership Interest | Robert J. Conway             | 308
				- Direct                             | 1.3                 
|Limited
				Partnership Interest | Joseph W. Conway             | 187
				- Direct                             | Less
				than 1%    
|                                 | Total                        | 495                                          | 1.4%                

(1)
Unless otherwise indicated, the address for each listed director or
officer is c/o 6700 E. Pacific Coast Hwy. #150, Long Beach, CA 90803.
As used in this table, "beneficial ownership" means the
sole or shared power to vote or direct the voting or to dispose or
direct the disposition of any security.

(2)
As of December 31, 2008, no person owned more than 5% of the limited
partnership units of record, nor was any person known by the
Partnership to beneficially own more than 5% thereof.



ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

The
Partnership has no employees and depends on the General Partners and
their affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for
certain payments to affiliates for services and reimbursement of
certain expenses incurred by affiliates on behalf of the Partnership.

Under
the Agreement of Limited Partnership, the General Partners are
allocated 1% of the net profits or losses from operations of the
Partnership. During 2008 an aggregate of $45,324 was allocated to the
General Partners, and during 2007 an aggregate of $11,709 was
allocated to the General Partners. In addition, under the Limited
Partnership Agreement the General Partners are entitled to receive a
percentage, of any cash distribution from the sale, other
disposition, or refinancing of properties of the Partnership, based
on a formula set forth in the Limited Partnership Agreement. In 2008,
fees paid to the general partners in accordance with the partnership
agreement amounting to $79,882.

In
addition, the general partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership,
equal to 9% per annum of the cash available for distribution on a
cumulative basis, calculated as cash generated from operations less
capital expenditures. During 2008 the Partnership paid the General
Partners an incentive management fee of $95,833, and during 2007 the
Partnership paid the General Partners an incentive management fee of
$115,901.

All
of the Partnership’s properties were purchased from Dahn
Corporation ("Dahn"). Dahn is not affiliated with the
Partnership, but is affiliated with other partnerships in which DSI
Properties, Inc. is a general partner The Partnership has entered
into management agreements with Dahn to operate its mini-storage
facilities.  Each agreement provides for a management fee equal to 5%
of gross revenue from operations, defined as the entire amount of all
receipts from the renting or leasing of storage compartments and sale
of locks.  The management agreements are renewable annually. During
2008 and 2007 the Partnership paid Dahnmanagement
fees of $113,111 and $113,186, respectively.  Amounts payable to Dahn
at December 31, 2008 and 2007, were $11,170 and $14,890,
respectively.

None
of the General Partner's directors is “independent” under
the independence standards established by the Securities and Exchange
Commission, as all directors are employed by a General Partner.



ITEM
14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit
Fees

The
aggregate fees for professional services rendered by Cacciamatta
Accountancy Corporation for the audit of the Partnership's annual
financial statements and for reviews of the financial statements
included in the Partnership's Quarterly Reports on Form 10-Q for 2008
were$49,400 and for
2007 were $29,600.



Other
Fees

The
Partnership did not pay Cacciamatta Accountancy Corporation any
Non-Audit-Related Fees, Tax Fees, or other fees during 2008 and 2007.

Page
8

PART IV



ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(1)
Financial Statements

See
Index to Financial Statements and Supplemental Schedule in Item 7.

(2)
Financial Statement Schedules

See
Index to Financial Statements and Supplemental Schedule in Item 7.

(3)
Exhibits

13   Annual Report Letter
to Limited Partners

31.1 Rule
13a-14(a)/15d-14(a) Certification: Principal Executive Officer

31.2 Rule
13a-14(a)/15d-14(a) Certification: Principal Financial Officer

32.1 Section 1350
Certification: Principal Executive Officer

32.2 Section 1350
Certification: Principal Financial Officer



Page
9

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,

a
California Limited Partnership

by:
DSI Properties, Inc., a California corporation,

as
General Partner

/s/ ROBERT J. CONWAY

By_____________________________

Dated:
April 14, 2009

ROBERT
J. CONWAY,President

(Chief
Executive Officer, Chief Financial Officer, and Director)

/s/ JOSEPH W. CONWAY

By_____________________________

Dated:
April 14, 2009

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,

a
California Limited Partnership

by:
DSI Properties, Inc., a California corporation, as

General
Partner

/s/
ROBERT J. CONWAY

By_____________________________

Dated:April 14, 2009

ROBERT
J. CONWAY,President

(Chief
Executive Officer, Chief Financial Officer, and Director)

/s/
JOSEPH W. CONWAY

By_____________________________

Dated:April 14, 2009

JOSEPH
W. CONWAY,(Executive

Vice
President and Director)

Page
10

ITEM15(1)



2008
ANNUAL REPORT TO LIMITED PARTNERS OF

DSI
REALTY INCOME FUND VII

Financial
Statements for its fiscal year ended December 31, 2008

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the 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, 2008 and 2007 and the related statements of
income, changes in partners' equity (deficit), and cash flows for
each of the two years in the period ended December 31, 2008.  Our
audits also included the supplemental schedule listed in the Index at
Item 15(2).  These financial statements and the supplemental schedule
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements
and supplemental 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 audits 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 Partnership'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 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, 2008 and 2007, and the results of its operations
and its cash flows for each of the two years in the period ended
December 31, 2008, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such
supplemental 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.



/s/
Cacciamatta Accountancy Corporation

Santa
Ana, California

March
31, 2009

Page
F-1

DSI
REALTY INCOMEFUND
VII

(A
California Real Estate Limited Partnership)

|BALANCE SHEET                            |                 |                
|---------------------------------------- | --------------- | ---------------
|DECEMBER 31                              | 2008            | 2007           
|ASSETS                                   |                 |                
|Cash and cash
				equivalents            | $
				628,913   | $
				 760,743 
|Property, Net                            | 1,745,570       | 2,159,537      
|Uncollected rental
				revenue           | 67,643          | 83,205         
|Prepaid
				advertising                  | 68,817          | 50,604         
|Other assets                             | 558,943         | 25,251         
|TOTAL                                    | $
				3,069,887 | $
				3,079,340
|LIABILITIES AND
				PARTNERS' EQUITY     |                 |                
|LIABILITIES:                             |                 |                
|Distribution due
				to partners(Note 4) | $
				749,814   | $
				242,424  
|Incentive
				management fee liability   | 19,936          | 218,069        
|Property
				management fee liability    | 11,170          | 14,890         
|Capital leases                           | 0               | 47,090         
|Deferred income                          | 49,552          | 68,092         
|Accrued expenses                         | 31,435          | 24,010         
|Other liabilities                        | 17,635          | 44,545         
|Total
				liabilities                    | 879,544         | 659,120        
|PARTNERS'
				EQUITY (DEFICIT)(Note 4):  |                 |                
|General partners                         | (85,866)        | (83,567)       
|Limited partners                         | 2,276,209       | 2,503,787      
|Total partners'
				equity               | 2,190,343       | 2,420,220      
|TOTAL                                    | $
				3,069,887 | $
				3,079,340

The
accompanying notes are an integral part of these Financial
Statements.

Page
F-2

DSI
REALTY INCOMEFUND
VII

(A
California Real Estate Limited Partnership)

|STATEMENTS OF
				INCOME                                                      |                 |              
|----------------------------------------------------------------------------- | --------------- | -------------
|DECEMBER 31                                                                   | 2008            | 2007         
|REVENUES:                                                                     |                 |              
|Self-storage
				rental income                                                | 2,115,108       | 2,127,786    
|Ancillary
				operating revenue                                               | 112,862         | 153,249      
|Interest and other
				income                                                 | 537             | 657          
|Total                                                                         | 2,228,507       | 2,281,692    
|EXPENSES:                                                                     |                 |              
|Depreciation                                                                  | 42,569          | 43,290       
|Operating                                                                     | 797,572         | 799,749      
|General and
				administrative                                                | 290,628         | 259,509      
|Interest                                                                      | (1,725)         | 3,332        
|General
				partners' incentive management fee
				(Note 4)                   | 95,833          | 115,901      
|Property
				management fee (Note 6)                                          | 113,111         | 113,186      
|Total                                                                         | 1,337,988       | 1,334,967    
|INCOME
				FROM CONTINUING OPERATIONS
				BEFORE
				DISCONTINUED OPERATIONS: | 890,519         | 946,725      
|DISCONTINUED
				OPERATIONS(Note 7):                                          |                 |              
|Net income from
				discontinued operations                                   | 79,045          | 224,212      
|Net gain on sale
				of discontinued operations                               | 3,562,876       | 0            
|Total income from
				discontinued operations                                 | 3,641,921       | 224,212      
|NET INCOME                                                                    | 4,532,440       | 1,170,937    
|AGGREGATE
				NET INCOME ALLOCATEDTO (Note 4):                                |                
|Limited partners                                                              | $4,487,116      | 1,159,228    
|General partners                                                              | 45,324          | 11,709       
|TOTAL                                                                         | $4,532,440      | $1,170,937   
|Number of limited
				partnership units outstanding                           | 24,000          | 24,000       
|NET
				INCOME PER LIMITED PARTNERSHIP UNIT (Notes 2 and 4)                   | $
				   186.96 | $
				  48.30

The
accompanying notes are an integral part of these Financial
Statements.

Page
F-3

DSI
REALTY INCOME FUND VII

(A
California Real Estate Limited Partnership)

|STATEMENTS OF
				CHANGES IN PARTNERS' EQUITY (DEFICIT)
|-------------------------------------------------------
|                                                       
|                                                       
|BALANCE
				DECEMBER 31, 2006                          
|Net
				income allocation                              
|Distributions                                          
|BALANCE DECEMBER
				31, 2007                          
|Net income
				allocation                              
|Distributions                                          
|BALANCE
				DECEMBER 31, 2008                          

The
accompanying notes are an integral part of these Financial
Statements.

Page
F-4

DSI
REALTY INCOMEFUND
VII

(A
California Real Estate Limited Partnership)

|STATEMENTS OF
				CASH FLOWS                                 |                 |                
|------------------------------------------------------------ | --------------- | ---------------
|                                                             | 2008            | 2007           
|CASH FLOWS FROM
				OPERATING ACTIVITIES:                    |                 |                
|Net income                                                   | 4,532,440       | $
				1,170,934
|Adjustments
				to reconcile net income to net cash provided |                 |                
|byoperating activities:                                      |                 |                
|Depreciation                                                 | 50,186          | 53,604         
|Gain on sale from
				discontinued operations                | (3,562,876)     | -              
|Changes in
				assets and liabilities:                       |                 |                
|Other assets                                                 | (536,344)       | (6,112)        
|Incentive
				management fee payable                         |                 |                
|to
				general partners                                      | (198,133)       | (16,752)       
|Property
				management fees payable                         | (3,720)         | 78             
|Customer deposits
				and other liabilities                  | 469,366         | (8,379)        
|Net
				cash provided by operating activities                | 790,919         | 1,193,373      
|CASH FLOWS FROM
				INVESTING ACTIVITIES -                   |                 |                
|Additions to
				property                                    | (17,485)        | (1,650)        
|Proceeds from the
				sale of discontinued operations        | 3,944,143       | -              
|Net
				cash used in investing activities                    | 3,926,658       | (1,650)        
|CASH FLOWS FROM
				FINANCING ACTIVITIES -                   |                 |                
|Distributions to
				partners                                | (4,762,317)     | (1,105,512)    
|Payments
				on capital lease obligations                    | (47,090)        | (40,836)       
|Net cash used in
				financing activities                    | (4,809,407)     | (1,146,348)    
|NET
				INCREASEIN CASH AND                                  |                 |                
|CASH
				EQUIVALENTS                                         | (131,830)       | 45,375         
|CASH AND CASH
				EQUIVALENTS,                               |                 |                
|AT BEGINNING OF
				YEAR                                     | 760,743         | 715,368        
|CASH AND CASH
				EQUIVALENTS,                               |                 |                
|AT END OF YEAR                                               | 628,913         | 760,743        
|SUPPLEMENTAL
				DISCLOSURE OF CASH                          |                 |                
|FLOW
				INFORMATION -                                       |                 |                
|Cash paid for
				interest                                   | (1,725)         | 3,332          
|NON CASH
				INVESTING AND FINANCING ACTIVITIES:             |                 |                
|Distribution
				due partners  included in partners' equity  | $
				  749,814 | $
				  242,424

The
accompanying notes are an integral part of these Financial
Statements.

Page
F-5



DSI
REALTY INCOME FUND VII

(A
California Real Estate Limited Partnership)

NOTES
TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007



1.
  GENERAL

DSI
Realty Income Fund VII, a California 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 per
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 owns 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 (see Note 6).



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 is recorded at cost and is composed
primarily of mini-storage facilities.  Depreciation is provided using
the straight-line method over an estimated useful life of 20 years
for the facilities.  Building improvements are depreciated over a
five year period. Property under capital leases is amortized over the
lesser of the lives of 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 purposes for the year ended December 31, 2008 and
2007 is $223,485 and $18,029, respectively.

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 is 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 to make estimates and  assumptions
that affect the reported  amounts of assets and liabilities and
disclosure of contingent 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 value of the property. No impairment losses were
required in 2007 or 2006.

Fair
Value of Financial Instruments - For all financial instruments,
including cash and cash equivalents, other assets, distributions due
to partners, incentive management fee payable to general partners,
property

management
fee payable, and customer deposits and other liabilities, carrying
values approximate fair values because of the short maturity of those
instruments. The carrying value of the capital lease obligations
approximates fair value because the terms of the instrument are
similar to terms available to the Partnership for similar types of
leasing agreements.

Page
F-6

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.

Recent
Accounting Pronouncement - In December 2007, the FASB issued SFAS No.
 141(revised 2007), "Business Combinations," or SFAS No.
141R.  SFAS No. 141R replaces SFAS No. 141, "Business
Combinations." SFAS No. 141R establishes principles and
requirements for how an acquiror recognizes and measures in its
financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree, and
the goodwill acquired or a gain from a bargain purchase.  SFAS No.
141R also determines disclosure requirements to enable the evaluation
of the nature and financial effects of the business combination. SFAS
No. 141R applies prospectively to business combinations for which the
acquisition date is on or after the beginning of a fiscal year that
begins on or after December 15, 2008 and has implications for
acquisitions that occur prior to this date.  The Partnership does not
expect the adoption of SFAS No. 141R will have a material, if any,
impact on its current financial position, results of operations and
cash flows.

In
December 2007, the FASB issued SFAS No.  160, "Noncontrolling
Interests in Consolidated Financial Statements," or SFAS No.
160. SFAS No. 160 amends Accounting Research Bulletin 51,
"Consolidated Financial Statements," or ARB 51, and
requires all entities to report noncontrolling (minority) interests
in subsidiaries within equity in the consolidated financial
statements, but separate from the parent shareholders' equity.  SFAS
No. 160 also requires any acquisitions or dispositions of
noncontrolling interests that do not result in a change of control to
be accounted for as equity transactions.  Further, SFAS No. 160
requires that a parent recognize a gain or loss in net income when a
subsidiary is deconsolidated.  SFAS No.  160 is effective for fiscal
years beginning on or after December 15, 2008.  The Partnership does
not expect the adoption of SFAS No. 160 will have a material, if any,
impact on its financial position, results of operations and cash
flows.



3.
  PROPERTY

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

|                                       | 2008            | 2007           
|-------------------------------------- | --------------- | ---------------
|Land                                   | $
				1,714,700 | $
				2,089,800
|Buildings and
				improvements         | 6,398,254       | 7,794,172      
|Rental trucks
				under capital leases | 140,093         | 175,116        
|Total                                  | 8,253,047       | 10,059,088     
|                                       |                 |                
|Less accumulated
				depreciation      | (6,507,477)     | (7,899,551)    
|                                       |                 |                
|Property - net                         | $
				1,745,570 | $
				2,159,537



Depreciation
expense of $33,534 and $43,779 was recorded on the rental trucks
under capital leases in 2008 and 2007.



4.
  ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE

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
the 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.

Page
F-7



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 Partnership 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.



6.
  RELATED-PARTY TRANSACTIONS

The
Partnership has entered into management agreements with Dahn to
operate its mini-storage facilities.  Each agreement provides for a
management fee equal to 5% of gross revenue from operations, defined
as the entire amount of all receipts from the renting or leasing of
storage compartments and sale of locks.  The management agreements
are renewable annually. During 2008 and 2007 the Partnership paid
Dahnmanagement
fees of $113,111 and $113,186, respectively.  Amounts payable to Dahn
at December 31, 2008 and 2007, were $11,170 and $14,890,
respectively.

In
2004, the Partnership entered into truck lease agreements with KMD
Trucks, LLC ("KMD"). The president of Dahn, Brian Dahn, is
also a member of KMD. The truck lease agreements expired as of
December 31, 2008.



7.
  DISCONTINUED OPERATIONS

In
accordance with SFAS No. 144, "Business Combinations", the
net income and the net gain on disposition of a mini-storage facility
located in Fort Collins, CO, which was sold on August 15, 2008, is
reflected

in
the statement of income as discontinued operations for all periods
presented.  The mini-storage facility was sold for the sale price of
$4,147,500.  In September, 2008, proceeds in the amount of $3,302,970

were
distributed to the limited partners.  The net gain on the sales of
the facility is $3,562,876. In 2008, fees paid to the general
partners in accordance with the partnership agreement amounting to
$79.882.

The
following table summarizes the revenue and expense components that
comprise discontinued operations.

|                                                            | 2008      | 2007   
|----------------------------------------------------------- | --------- | -------
|REVENUES:                                                   |           |        
|Self-storage
				rental income                              | 277,355   | 450,820
|Ancillary
				operating revenue                             | 22,930    | 37,976 
|Interest and other
				income                               | 112       | 0      
|Total                                                       | 300,397   | 488,796
|EXPENSES:                                                   |           |        
|Depreciation                                                | 7,617     | 10,316 
|Operating                                                   | 177,952   | 204,527
|General and
				administrative                              | 19,147    | 24,456 
|Interest                                                    | 488       | 833    
|General
				partners' incentive management fee
				(Note 4) | 0         | 0      
|Property
				management fee(Note 6)                         | 16,148    | 24,453 
|Total                                                       | 221,352   | 264,585
|                                                            |           |        
|Net income from
				discontinued operations                 | 79,045    | 224,212
|Net gain on sale
				of discontinued operations             | 3,562,876 | 0      
|                                                            |           |        
|Total income from
				discontinued operations               | 3,641,921 | 224,212

Page
F-8

ITEM 15(2)



DSI
REALTY INCOME FUND VII

(A
California Real Estate Limited Partnership)



SCHEDULE
III

REAL
ESTATE AND ACCUMULATED DEPRECIATION

As
of December 31, 2008

|Initial
			Cost  | Gross
			Carrying Amount at December 31, 2008
|---------------- | ---------------------------------------------
|Description      | Acqui-sition
			Date                         
|Chico,
			CA     | 12/83                                        
|Fairfield,
			CA | 01/84                                        
|La
			Verne, CA  | 08/84                                        
|Littleton,
			CO | 05/85                                        
|Riverside,
			CA | 06/84                                        
|                 |                                              

Notes:

1. Depreciation expense is
	computed using the straight-line method over an estimated useful
	life of 20 years for the buildings.

1. There
	are no encumbrances.

Page
F-9

EXHIBIT
13



2008
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,
2008 and 2007, and the related statements of income, changes in
partners' equity (deficit) and cash flows for each of the two years
ended December 31, 2008 accompanied by a report of Independent
Registered Public Accounting firm. 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 and revenue per square foot for each of the
Partnership's properties for the years ended December 31, 2008 and
2007 were as follows:

|                   |         |        | 2008         | 2007        
|------------------ | ------- | ------ | ------------ | ------------
|                   | Parcel  |        | (Average)    | (Average)   
|                   | Size    | Date   | Rentable     | Revenue     
|Location           | (Acres) | Opened | Sq.
					Ft. | Sq.
					Ft.
|Chico, CA          | 1.97    | Jul-84 | 38,795       | 8.04        
|La Verne,
					CA  | 2.78    | Apr-85 | 52,210       | 10.89       
|Littleton,
					CO | 3.07    | Oct-85 | 45,780       | 9.39        
|Riverside,
					CA | 2.92    | Jan-85 | 60,928       | 7.86        
|Fairfield,
					CA | 2.29    | Aug-84 | 41,010       | 11.78       

We
will keep you informed of the activities of your Fund 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, 2008, 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.

/s/
ROBERT J. CONWAY

By_______________________________

ROBERT
J. CONWAY, President

EXHIBIT
31.1Rule
13a-14(a)/15d-14(a) Certification

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 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
covered by this report.

3.
 Based on my knowledge, the financial statements, and other financial
information included in this 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
report.

4.
 The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)), for the registrant and have:

a)
 designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 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;

c)  
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

d)
 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 an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

5.
 The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):

a)
 all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, 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
internal control over financial reporting.

Date:April 14, 2009

/s/
ROBERT J. CONWAY _______________________________

Robert
J. Conway

President
of DSI Properties, Inc., General Partner (chief executive officer)

EXHIBIT
31.2Rule
13a-14(a)/15d-14(a) Certification



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 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
covered by this report.

3.
 Based on my knowledge, the financial statements, and other financial
information included in this 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
report.

4.
 The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)), for the registrant and have:

a)
 designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 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;

c)  
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

d)
 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 an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

5.
 The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):

a)
 all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, 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
internal control over financial reporting.

Date:
 April 14, 2009

/s/
RICHARD P. CONWAY

__________________________________

Richard
P. Conway

Senior
Vice President of DSI Properties, Inc., General Partner (chief
financial officer)

EXHIBIT
32.1



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 ofDSI
Realty Income Fund VII(the "Partnership") on Form 10-K for the period ending
December 31, 2008 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Robert J.
Conway, President of DSI Properties, Inc., General Partner of the
Partnership, and performing the functions of 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.

/s/
ROBERT J. CONWAY

___________________________________

Robert
J. Conway

President
of DSI Properties, Inc., General Partner (chief executive officer)

April
14, 2009

EXHIBIT
32.2



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 ofDSI
Realty Income Fund VII(the "Partnership") on Form 10-K for the period ending
December 31, 2008 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Richard P.
Conway, Senior Vice President of DSI Properties, Inc., General
Partner of the Partnership, and performing the functions of chief
financial 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.

/s/
RICHARD P. CONWAY

__________________________________

Richard
P. Conway

Senior
Vice President of DSI Properties, Inc., General Partner (chief
financial officer)

April
14, 2009