FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

            x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 2000

                                       OR

           o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             For the transition period from ________ to ___________

                         Commission file number: 0-23908


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.


California                                                           33-0531301
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)


              3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626

                                 (714) 662-5565


Indicate by check mark whether the registrant (1) 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 90 days. Yes ____ No __X__.




<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                               INDEX TO FORM 10-Q

                     For the Quarter Ended December 31, 2000



PART I. FINANCIAL INFORMATION

 Item 1. Financial Statements

 Balance Sheets
          December 31, 2000 and March 31, 2000...............................3

 Statements of Operations
          For the three and nine months ended December 31, 2000 and 1999.....4

 Statement of Partners' Equity (Deficit)
          For the nine months ended December 31, 2000........................5

 Statements of Cash Flows
          For the nine months ended December 31, 2000 and 1999...............6

 Notes to Financial Statements...............................................7

 Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations...............................13

 Item 3. Quantitative and Qualitative Disclosures About Market Risks........14

PART II. OTHER INFORMATION

 Item 1. Legal Proceedings..................................................14

 Item 6. Exhibits and Reports on Form 8-K...................................14

 Signatures ................................................................15

                                       2


<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                  December 31, 2000                  March 31, 2000
                                                                -----------------------            --------------------
                                                                     (Unaudited)
                                     ASSETS
<S>                                                           <C>                                <C>
Cash and cash equivalents                                     $                443,170           $             480,598
Investments in limited partnerships, net (Note 2)                            7,519,708                       8,224,971
                                                                -----------------------            --------------------

                                                              $              7,962,878           $           8,705,569
                                                                =======================            ====================


                   LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Accrued fees and expenses due to
  General Partner and affiliates (Note 3)                     $                816,317           $             718,279
                                                                -----------------------            --------------------

      Total liabilities                                                        816,317                         718,279
                                                                -----------------------            --------------------
Partners' equity (deficit):
 General partner                                                               (98,665)                        (90,258)
 Limited partners (30,000 units authorized;
     18,000 units issued and outstanding)                                    7,245,226                       8,077,548
                                                                -----------------------            --------------------

      Total partners' equity                                                 7,146,561                       7,987,290
                                                                -----------------------            --------------------

                                                              $              7,962,878           $           8,705,569
                                                                =======================            ====================
</TABLE>

                 See accompanying notes to financial statements
                                        3

<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF OPERATIONS

         For the Three and Nine Months Ended December 31, 2000 and 1999
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                     2000                                  1999
                                       ----------------------------------    ---------------------------------
                                          Three              Nine               Three             Nine
                                          Months             Months             Months            Months
                                       --------------     --------------     -------------     --------------
<S>                                  <C>                 <C>                <C>              <C>
Interest income                      $         5,018     $       15,502     $       4,954    $        15,000
                                       --------------     --------------     -------------     --------------

Operating expenses:
 Amortization                                 15,116             45,348            15,116             45,348
 Asset management fees (Note 3)               45,346            136,038            44,151            134,843
 Legal and accounting                          2,235             14,800             3,971             14,573
 Other                                         2,210              5,568                34              4,901
                                       --------------     --------------     -------------     --------------

    Total operating expenses                  64,907            201,754            63,272            199,665
                                       --------------     --------------     -------------     --------------

Loss from operations                         (59,889)          (186,252)          (58,318)          (184,665)
                                       --------------     --------------     -------------     --------------
Equity in losses of
 limited partnerships (Note 2)              (218,159)          (654,477)         (223,175)          (677,225)
                                       --------------     --------------     -------------     --------------

Net loss                             $      (278,048)    $     (840,729)    $    (281,493)   $      (861,890)
                                       ==============     ==============     =============     ==============

Net loss allocated to:
  General partner                    $        (2,780)    $       (8,407)    $      (2,815)   $        (8,619)
                                       ==============     ==============     =============     ==============

  Limited partners                   $      (275,268)    $     (832,322)    $    (278,678)   $      (853,271)
                                       ==============     ==============     =============     ==============
Net loss per limited
 partner unit                        $           (15)    $          (46)    $         (15)   $           (47)
                                       ==============     ==============     =============     ==============
Outstanding weighted limited
 partner units                                18,000             18,000            18,000             18,000
                                       ==============     ==============     =============     ==============
</TABLE>

                 See accompanying notes to financial statements
                                        4

<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                          STATEMENT OF PARTNERS' EQUITY

                   For the Nine Months Ended December 31, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                            General              Limited
                                                            Partner              Partners               Total
                                                       ------------------     ----------------     -----------------

<S>                                                  <C>                    <C>                  <C>
Partners' equity (deficit) at March 31, 2000         $          (90,258)    $     8,077,548      $      7,987,290


Net loss                                                         (8,407)           (832,322)             (840,729)
                                                       ------------------     ----------------     -----------------

Partners' equity (deficit) at December 31, 2000      $          (98,665)    $     7,245,226      $      7,146,561
                                                       ==================     ================     =================



</TABLE>


                 See accompanying notes to financial statements
                                        5



<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS

              For the Nine Months Ended December 31, 2000 and 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               2000                      1999
                                                         -----------------         ------------------
<S>                                                    <C>                       <C>
Cash flows from operating activities:
 Net loss                                              $        (840,729)        $         (861,890)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
   Amortization                                                   45,348                     45,348
   Equity in losses of limited partnerships                      654,477                    677,225
   Change in accrued fees and expenses due
    to General Partner and affiliates                             98,038                    136,760
                                                         -----------------         ------------------

Net cash used in operating activities                            (42,866)                    (2,557)
                                                         -----------------         ------------------
Cash flows from investing activities:
 Investment in limited partnerships (netP                              -                    (16,836)
 Distributions from limited partnerships                           5,438                      4,935
                                                         -----------------         ------------------

Net cash provided by (used in) investing activities                5,438                    (11,901)
                                                         -----------------         ------------------

Net decrease in cash and cash equivalents                        (37,428)                   (14,458)
                                                         -----------------         ------------------

Cash and cash equivalents, beginning of period                   480,598                    509,695
                                                         -----------------         ------------------
Cash and cash equivalents, end of period               $         443,170         $          495,237
                                                         =================         ==================
SUPPLEMENTAL DISCLOSURE
 OF CASH FLOW INFORMATION:

  Taxes paid                                           $             800         $              800
                                                         =================         ==================
</TABLE>

                 See accompanying notes to financial statements
                                        6

<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2000
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying condensed consolidated unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions  to Form  10-Q for  quarterly
reports  under  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three and nine months ended December 31, 2000 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  March  31,  2001.  For  further  information,  refer  to  the  financial
statements and footnotes thereto included in the Partnership's  annual report on
Form 10-K for the fiscal year ended March 31, 2000.

Organization

WNC California  Housing Tax Credits III, L.P. a California  Limited  Partnership
(the  "Partnership"),  was formed on October 5, 1992 under the laws of the state
of California and began  operations on July 19, 1993. The Partnership was formed
to  invest  primarily  in  other  limited   partnerships   (the  "Local  Limited
Partnerships")  which  own  and  operate  multi-family  housing  complexes  (the
"Housing  Complex") that are eligible for low income housing credits.  The local
general   partners  (the  "Local  General   Partners")  of  each  Local  Limited
Partnership retain  responsibility  for maintaining,  operating and managing the
Housing Complex.

The  general  partner  is WNC  Tax  Credit  Partners  III,  L.P.  (the  "General
Partner").  WNC &  Associates,  Inc.  ("WNC") is the general  partner of WNC Tax
Credit Partners III, L.P.  Wilfred N. Cooper Sr.,  through the Cooper  Revocable
Trust owns 66.8% of the  outstanding  stock of WNC. John B. Lester,  Jr. was the
original limited partner of the Partnership and owns,  through the Lester Family
Trust, 28.6% of the outstanding stock of WNC. Wilfred N. Cooper,  Jr., President
of  WNC,  owns  2.1%  of the  outstanding  stock  of WNC.  The  business  of the
Partnership  is  conducted   primarily  through  the  General  Partner,  as  the
Partnership has no employees of its own.

The  Partnership  Agreement  authorized the sale of up to 30,000 units at $1,000
per Unit  ("Units").  The offering of Units concluded in July 1994 at which time
17,990 Units, representing subscriptions in the amount of $17,990,000,  had been
accepted. During 1995, an additional 10 units amounting to $10,000 was collected
on  subscriptions  accepted and  previously  deemed  uncollectible.  The General
Partner has a 1% interest in operating  profits and losses,  taxable  income and
losses,  cash available for distribution from the Partnership and tax credits of
the  Partnership.  The limited  partners  will be allocated the remaining 99% of
these items in proportion to their respective investments.

After the limited  partners  have received  proceeds from a sale or  refinancing
equal to their capital  contributions and their return on investment (as defined
in the  Partnership  Agreement)  and the General  Partner has received  proceeds
equal to its capital  contribution  and a subordinated  disposition fee from the
remainder,  any additional sale or refinancing  proceeds will be distributed 90%
to the limited partners (in proportion to their respective  investments) and 10%
to the General Partner.

                                       7
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 2000
                                   (unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Risks and Uncertainties

The Partnership's  investments in Local Limited  Partnerships are subject to the
risks incident to the management and ownership of low-income  housing and to the
management and ownership of multi-unit  residential  real estate.  Some of these
risks  are that the low  income  housing  credit  could be  recaptured  and that
neither the  Partnership's  investments  nor the Housing  Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes  receive  government  financing  or operating  subsidies,  they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests;  limitations on
removal of Local Partners; limitations on subsidy programs; and possible changes
in  applicable  regulations.  The  Housing  Complexes  are or will be subject to
mortgage indebtedness. If a Local Limited Partnership does not make its mortgage
payments,  the lender could foreclose resulting in a loss of the Housing Complex
and low  income  housing  credits.  As a limited  partner  of the Local  Limited
Partnerships,  the  Partnership  will have very  limited  rights with respect to
management of the Local Limited Partnerships, and will rely totally on the Local
General  Partners of the Local Limited  Partnerships for management of the Local
Limited Partnerships. The value of the Partnership's investments will be subject
to changes in national and local  economic  conditions,  including  unemployment
conditions, which could adversely impact vacancy levels, rental payment defaults
and operating expenses.  This, in turn, could substantially increase the risk of
operating  losses for the Housing  Complexes and the  Partnership.  In addition,
each Local Limited  Partnership  is subject to risks  relating to  environmental
hazards  and  natural   disasters  which  might  be  uninsurable.   Because  the
Partnership's  operations  will  depend on these and other  factors  beyond  the
control of the General Partner and the Local General  Partners,  there can be no
assurance that the  anticipated  low income housing credits will be available to
Limited Partners.

In addition,  Limited  Partners are subject to risks in that the rules governing
the low income  housing  credit are  complicated,  and the use of credits can be
limited.  The only  material  benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop.  All management decisions will
be made by the General Partner.

Method of Accounting For Investments in Limited Partnerships

The Partnership  accounts for its investments in limited  partnerships using the
equity method of  accounting,  whereby the  Partnership  adjusts its  investment
balance for its share of the Local Limited  Partnership's  results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership  in  acquiring  the  investments  are  capitalized  as  part  of the
investment account and are being amortized over 30 years.

Offering Expenses

Offering  expenses consist of underwriting  commissions,  legal fees,  printing,
filing and  recordation  fees,  and other costs  incurred  with selling  limited
partnership  interests in the  Partnership.  The General Partner is obligated to
pay all  offering  and  organization  costs in  excess of 15%  (including  sales
commissions) of the total offering proceeds.  Offering expenses are reflected as
a reduction of partners'  capital and amounted to  $2,366,564  at the end of all
periods presented.

                                       8

<PAGE>
 WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 2000
                                   (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

 Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management 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 materially differ from those estimates.

Cash and Cash Equivalents

The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents.  The Partnership had
no cash equivalents at the end of all periods presented.

 Concentration of Credit Risk

 At December 31, 2000,  the  Partnership  maintained a cash balance at a certain
 financial institution in excess of the maximum federally insured amounts.

Net Loss Per Limited Partner Unit

Net loss per limited  partnership  unit is  calculated  pursuant to Statement of
Financial  Accounting  Standards No. 128,  Earnings Per Share. Net loss per unit
includes no dilution  and is computed  by  dividing  loss  available  to limited
partners by the weighted average number of units outstanding  during the period.
Calculation of diluted net income per unit is not required.

 Reporting Comprehensive Income

 In June 1997,  the FASB issued  Statement  of  Financial  Accounting  Standards
 ("SFAS") No. 130, Reporting  Comprehensive  Income. This statement  establishes
 standards  for reporting the  components of  comprehensive  income and requires
 that all items that are required to be recognized under accounting standards as
 components of comprehensive income be included in a financial statement that is
 displayed with the same prominence as other financial statements. Comprehensive
 income includes net income as well as certain items that are reported  directly
 within a separate  component  of  partners'  equity and bypass net income.  The
 Partnership  adopted the  provisions of this statement in 1998. For the periods
 presented,  the Partnership has no elements of other  comprehensive  income, as
 defined by SFAS No. 130.

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of the periods  presented,  the Partnership had acquired limited  partnership
interests in eighteen Local Limited Partnerships, each of which owns one Housing
Complex  consisting  of an  aggregate of 635  apartment  units.  The  respective
general  partners  of the  Local  Limited  Partnerships  manage  the  day-to-day
operations  of the entities.  Significant  Local  Limited  Partnership  business
decisions require approval from the Partnership.  The Partnership,  as a limited
partner,  is  generally  entitled  to 99%,  as  specified  in the Local  Limited
Partnership agreements,  of the operating profits and losses, taxable income and
losses and tax credits of the Limited Partnerships.

Equity  in  losses  of the  Local  Limited  Partnerships  is  recognized  in the
financial  statements until the related  investment account is reduced to a zero
balance. Losses incurred after the investment account is reduced to zero are not

                                       9
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 2000
                                   (unaudited)

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

recognized. If the Local Limited Partnerships report net income in future years,
the  Partnership  will resume applying the equity method only after its share of
such net  income  equals  the share of net  losses  not  recognized  during  the
period(s) the equity method was suspended.

The following is a summary of the equity method  activity of the  investments in
Local Limited Partnerships for the periods presented.
<TABLE>
<CAPTION>
                                                               For the Nine           For the Year
                                                               Months Ended               Ended
                                                             December 31, 2000       March 31, 2000
                                                             ------------------      ----------------
<S>                                                        <C>                     <C>
   Investments per balance sheet, beginning of period      $        8,224,971      $      9,164,197
   Distributions received                                              (5,438)               (5,909)
   Equity in losses of limited partnerships                          (654,477)             (872,853)
   Amortization of paid acquisition fees and costs                    (45,348)              (60,464)
                                                             ------------------      ----------------

   Investments per balance sheet, end of period            $        7,519,708      $      8,224,971
                                                             ==================      ================

Selected  financial  information for the nine months ended December 31, from the
unaudited combined financial statements of the limited partnerships in which the
Partnership has invested as follows:

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS

                                                              2000                      1999
                                                      ----------------------     --------------------
<S>                                                 <C>                         <C>
   Revenue                                          $             2,207,000     $          2,234,000
                                                      ---------------------      -------------------

   Expenses:
    Operating expenses                                            1,555,000                1,350,000
    Interest expense                                                430,000                  711,000
    Depreciation and amortization                                   919,000                  890,000
                                                      ----------------------     --------------------

   Total expenses                                                 2,904,000                2,951,000
                                                      ----------------------     --------------------

   Net loss                                         $              (697,000)    $           (717,000)
                                                      ======================     ====================

   Net loss allocable to the Partnership            $              (690,000)    $           (710,000)
                                                      ======================     ====================

   Net loss recorded by the Partnership             $              (654,000)    $           (677,000)
                                                      ======================     ====================
</TABLE>

                                       10
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 2000
                                   (unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIP, continued

Certain Local Limited  Partnerships have incurred  significant  operating losses
and  have  working  capital  deficiencies.  In the  event  these  Local  Limited
Partnerships continue to incur significant operating losses,  additional capital
contributions  by the  Partnership  and/or  the Local  General  Partners  may be
required to sustain operations of such Local Limited Partnerships. If additional
capital  contributions  are not made when they are required,  the  Partnership's
investment in certain of such Local Limited Partnerships could be impaired.

NOTE 3 - RELATED PARTY TRANSACTIONS

The Partnership has no officers,  employees,  or directors.  However,  under the
terms of the  Partnership  Agreement the Partnership is obligated to the General
Partner or its  affiliates  during the current or future years for the following
fees:

(a)  Annual Asset  Management  Fee. An annual asset  management fee in an amount
     equal  to 0.5% of the  Invested  Assets  of the  Partnership,  as  defined.
     "Invested  Assets" means the sum of the  Partnership's  Investment in Local
     Limited Partnership Interests and the Partnership's  allocable share of the
     amount of the  mortgage  loans on and other  debts  related to, the Housing
     Complexes  owned by such Local Limited  Partnerships.  Fees of $136,038 and
     $134,843 were incurred  during the nine months ended  December 31, 2000 and
     1999,  respectively.  The  Partnership  paid  the  General  Partner  or its
     affiliates  $37,500 of those fees during the nine months ended December 31,
     2000 and $0 during the nine months ended December 31, 1999.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the sales price of real estate sold.  Payment of this fee is
     subordinated to the limited  partners  receiving a preferred  return of 16%
     through  December 31, 2003 and 6% thereafter (as defined in the Partnership
     Agreement)  and is payable  only if the General  Partner or its  affiliates
     render services in the sales effort.

The accrued fees and expenses due to General  Partner and affiliates  consist of
the following:
<TABLE>
<CAPTION>

                                                                   December 31, 2000            March 31, 2000
                                                                 ----------------------      ----------------------
<S>                                                           <C>                         <C>
Asset management fee payable                                  $                816,317    $                718,279


</TABLE>

The General  Partner does not anticipate that these accrued fees will be paid in
full  until such time as capital  reserves  are in excess of future  foreseeable
working capital requirements of the Partnership.

                                       11
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 2000
                                   (unaudited)

NOTE 4 - INCOME TAXES

No provision for income taxes has been  recorded in the financial  statements as
any  liability  for  income  taxes  is the  obligation  of the  partners  of the
Partnership.










                                       12
<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

This  Quarterly  Report  contains  forward-looking   statements  concerning  the
Partnership's anticipated future revenues and earnings,  adequacy of future cash
flow and related matters. These forward-looking  statements include, but are not
limited to, statements containing the words "expect",  "believe", "will", "may",
"should", "project", "estimate", and like expressions, and the negative thereof.
These statements are subject to risks and uncertainties  that could cause actual
results to differ materially from the statements, including competition, as well
as those  risks  described  in the  Partnership's  SEC  reports,  including  the
Partnership's  Form 10-K filed  pursuant to the  Securities  and Exchange Act of
1934 on June 29, 2000.

The following discussion and analysis compares the results of operations for the
three and nine months ended  December  31, 2000 and 1999,  and should be read in
conjunction   with  the  condensed   consolidated   financial   statements   and
accompanying notes included within this report.

Financial Condition

The Partnership's assets at December 31, 2000 consisted primarily of $443,000 in
cash and aggregate  investments  in the eighteen Local Limited  Partnerships  of
$7,520,000.  Liabilities at December 31, 2000 primarily consisted of $816,000 of
accrued asset management fees due to the General Partner.

Results of Operations

Three Months Ended December 31, 2000 Compared to Three Months Ended December 31,
1999.  The  Partnership's  net loss for the three months ended December 31, 2000
was $(278,000),  reflecting a decrease of $3,000 from the $(281,000) of net loss
for the three  months  ended  December  31,  1999.  The  decline  in net loss is
primarily  due to equity in losses of limited  partnerships  which  declined  by
$5,000  to  $(218,000)  for the  three  months  ended  December  31,  2000  from
$(223,000)  for the three months ended  December 31, 1999.  This  decrease was a
result of the Partnership  not  recognizing  certain losses of the Local Limited
Partnerships.  The investments in such Local Limited Partnerships had reached $0
at December  31, 2000.  Since the  Partnership's  liability  with respect to its
investments is limited, losses in excess of investment are not recognized. Along
with the  decrease  in equity in losses of  limited  partnerships,  there was an
increase in loss from  operations of $2,000 for the three months ended  December
31, 2000 to $(60,000)  from  $(58,000)  for the three months ended  December 31,
1999, due to a comparable increase in operating expense allocations.

Nine Months Ended  December 31, 2000 Compared to Nine Months Ended  December 31,
1999. The Partnership's net loss for the nine months ended December 31, 2000 was
$(841,000),  reflecting  a decrease of $21,000 from  $(862,000)  of the net loss
experienced for the nine months ended December 31, 1999. The decline in net loss
is primarily due to equity in losses of limited  partnerships  which declined by
$23,000  to  $(654,000)  for the  nine  months  ended  December  31,  2000  from
$(677,000)  for the nine months ended  December 31,  1999.  This  decrease was a
result of the Partnership  not  recognizing  certain losses of the Local Limited
Partnerships.  The investments in such Local Limited Partnerships had reached $0
at December  31, 2000.  Since the  Partnership's  liability  with respect to its
investments is limited, losses in excess of investment are not recognized.

Cash Flows

Nine Months Ended  December 31, 2000 Compared to Nine Months Ended  December 31,
1999. Net cash used during the nine months ended December 31, 2000 was $(37,000)
compared to a net use of cash for the nine  months  ended  December  31, 1999 of
$(14,000).  The change of $23,0000 was due primarily to an increase in operating
costs  paid of  $40,000  offset  by a  decrease  in  payables  paid  to  limited
partnerships of $17,000.  The $(40,000) increase was due primarily to payment of
asset management fees of $36,000.

                                       13
<PAGE>

During the nine months ended  December 31, 2000 accrued  payables  which consist
primarily  of asset  management  fees due to the General  Partner  increased  by
$98,000. The General Partner does not anticipate that these accrued fees will be
paid  until such time as capital  reserves  are in excess of future  foreseeable
working capital requirements of the partnership.

The Partnership  expects its future cash flows,  together with its net available
assets at December 31, 2000, to be sufficient to meet all currently  foreseeable
future cash requirements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risks

         NONE

Part II. Other Information

Item 1.  Legal Proceedings

         NONE

Item 6.  Exhibits and Reports on Form 8-K

         NONE






                                       14
<PAGE>

Pursuant  to the  requirements  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.

WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.

By:  WNC California Tax Credit Partners III General Partner

By:  WNC & Associates, Inc.         General Partner





By: /s/  Wilfred N. Cooper, Jr.

Wilfred N. Cooper, Jr.,
President - Chief Operating Officer of WNC & Associates, Inc.

Date:   February 16, 2001





By:  /s/ Thomas J. Riha

Thomas J. Riha,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.

Date:   February 16, 2001



                                       15