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, 2003

                                       OR

    |_| 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.)

                   17782 Sky Park Circle Irvine, CA 92614-6404
                    (Address of principal executive offices)

                                 (714) 662-5565
                               (Telephone number)

              3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
              (Former name, former address and former fiscal year,
                         if changed since last report)


          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
              ---------    ----------


          Indicate by check mark whether the registrant is an accelerated  filer
          (as defined in rule 12b-2 of the Exchange Act).

           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, 2003



      PART I. FINANCIAL INFORMATION

          Item 1. Financial Statements

          Balance Sheets
               December 31,2003 and March 31,2003..............................3

          Statements of Operations
               For the Three and Nine Months Ended December 31, 2003 and 2002..4

         Statement of Partners' Equity (Deficit)
               For the Nine Months Ended December 31, 2003.....................5

         Statements of Cash Flows
               For the Nine Months Ended December 31, 2003 and 2002............6

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

         Item 2. Management's Discussion and Analysis of Financial
                      Condition and Results of Operations.....................15

         Item 3. Quantitative and Qualitative Disclosures about Market Risks..16

         Item 4. Controls and Procedures......................................16

      PART II. OTHER INFORMATION

         Item 1. Legal Proceedings............................................17

         Item 6. Exhibits and Reports on Form 8-K.............................17

         Signatures ..........................................................18




                                       2
<PAGE>


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

<TABLE>
<CAPTION>
                                 BALANCE SHEETS




                                                                  December 31, 2003                   March 31, 2003
                                                                -----------------------             -------------------
                                                                     (unaudited)
ASSETS

<S>                                                          <C>                                 <C>
Cash and cash equivalents                                     $               310,722             $           371,426
Investments in limited partnerships, net (Note 2)                           5,039,466                       5,572,016
                                                                -----------------------             -------------------

                                                              $             5,350,188             $         5,943,442
                                                                =======================             ===================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Accrued fees and expenses due to
  General Partner and affiliates (Note 3)                     $             1,211,478             $         1,126,324

Commitments and contingencies

Partners' equity (deficit):
  General partner                                                            (128,744)                       (121,960)
  Limited partners (30,000 units authorized;
     18,000 units issued and outstanding)                                   4,267,454                       4,939,078
                                                                -----------------------             -------------------

        Total partners' equity                                              4,138,710                       4,817,118
                                                                -----------------------             -------------------

                                                              $             5,350,188             $         5,943,442
                                                                =======================             ===================
</TABLE>

                 See accompanying notes to financial statements
                                        3

<PAGE>


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

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

         For the Three and Nine Months Ended December 31, 2003 and 2002
                                   (unaudited)

                                              2003                  2003                  2002               2002
                                       -------------------    ------------------    -----------------   ----------------
                                          Three Months           Nine months          Three Months        Nine months
                                       -------------------    ------------------    -----------------   ----------------

<S>                                 <C>                    <C>                   <C>                 <C>
Interest income                      $               291    $            1,177    $             764   $          4,018
Distribution income                                  600                 4,347                    -              1,640
                                       -------------------    ------------------    -----------------   ----------------

                                                     891                 5,524                  764              5,658
                                       -------------------    ------------------    -----------------   ----------------

Operating expenses:
  Amortization (Note 2)                           14,981                44,943               14,711             44,943
  Asset management fees (Note 3)                  45,346               136,039               45,346            136,038
  Legal and accounting                               181                17,126                2,320             17,097
  Other                                            3,110                 5,467                1.352              5,064
                                       -------------------    ------------------    -----------------   ----------------

    Total operating expenses                      63,618               203,575               63,729            203,142
                                       -------------------    ------------------    -----------------   ----------------

Loss from operations                             (62,727)             (198,051)             (62,965)          (197,484)
                                       -------------------    ------------------    -----------------   ----------------

Equity in losses of
 limited partnerships (Note 2)                  (126,045)             (480,357)            (125,324)          (378,490)
                                       -------------------    ------------------    -----------------   ----------------

Net loss                             $          (188,772)   $         (678,408)   $        (188,289)  $       (575,974)
                                       ===================    ==================    =================   ================

Net loss allocated to:
  General partner                    $            (1,888)   $           (6,784)   $          (1,883)  $         (5,760)
                                       ===================    ==================    =================   ================

  Limited partners                   $          (186,884)   $         (671,624)   $        (186,406)  $       (570,214)
                                       ===================    ==================    =================   ================

Net loss per limited
 partner unit                        $               (10)   $              (37)   $             (10)  $            (32)
                                       ===================    ==================    =================   ================


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 (DEFICIT)

                   For the Nine Months Ended December 31, 2003
                                   (unaudited)

<TABLE>

<CAPTION>

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


<S>                                                  <C>                    <C>                  <C>
Partners' equity (deficit) at March 31, 2003          $        (121,960)     $     4,939,078      $     4,817,118

Net loss                                                         (6,784)            (671,624)            (678,408)
                                                        -----------------      ----------------     ----------------

Partners' equity (deficit) at December  31, 2003      $        (128,744)     $     4,267,454      $     4,138,710
                                                        =================      ================     ================


</TABLE>






                 See accompanying notes to financial statements
                                        5
<PAGE>


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

<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS

              For the Nine Months Ended December 31, 2003 and 2002
                                   (unaudited)


                                                                              2003                      2002
                                                                        ------------------        ------------------

<S>                                                                  <C>                       <C>
Cash flows from operating activities:
  Net loss                                                            $         (678,408)       $         (575,974)
     Adjustments to reconcile net loss to
       cash used in operating activities:
       Amortization                                                               44,943                    44,943
       Equity in losses of limited partnerships                                  480,357                   378,490
       Change in accrued fees and expenses due to
          General Partner and affiliates                                          85,154                    85,979
                                                                        ------------------        ------------------

Net cash used in operating activities                                            (67,954)                  (66,562)
                                                                        ------------------        ------------------

Cash flows from investing activities:
    Distributions from limited partnerships                                        7,250                    20,342
                                                                        ------------------        ------------------

Net decrease in cash and cash equivalents                                        (60,704)                  (46,220)

Cash and cash equivalents, beginning of period                                   371,426                   413,336
                                                                        ------------------        ------------------
Cash and cash equivalents, end of period                              $          310,722        $          367,116
                                                                        ==================        ==================

SUPPLEMENTAL DISCLOSURE
  OF CASH FLOW INFORMATION:

  Taxes paid                                                          $                -        $              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

                     For the Quarter Ended December 31, 2003
                                   (unaudited)
16



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

General
-------

The accompanying  condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America 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  accounting  principles  generally  accepted in the United States of
America 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 nine months
ended December 31, 2003 are not  necessarily  indicative of the results that may
be expected for the fiscal year ending March 31, 2004. 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,
2003.

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 of the Partnership is WNC Tax Credit Partners III, L.P. (the
"General Partner"). WNC & Associates,  Inc. ("Associates") and Wilfred N. Cooper
Sr. are the general partners of the General Partner.  The chairman and president
own substantially  all of the outstanding  stock of Associates.  The business of
the Partnership is conducted primarily through Associates as the Partnership has
no employees of its own.

The Partnership shall continue to be in full force and effect until December 31,
2050 unless terminated prior to that date pursuant to the partnership  agreement
or law.

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  $10,000 was  collected on  subscriptions
accepted  for 10  additional  units 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

                     For the Quarter Ended December 31, 2003
                                   (unaudited)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
--------------------------------------------------------------

Risks and Uncertainties
-----------------------

An investment in the  Partnership  and the  Partnership's  investments  in Local
Limited  Partnerships  and their Housing  Complexes are subject to risks.  These
risks may impact the tax benefits of an investment in the  Partnership,  and the
amount of proceeds  available for distribution to the Limited Partners,  if any,
on liquidation of the Partnership's investments. Some of those risks include the
following:

The Low Income  Housing  Credit rules are extremely  complicated.  Noncompliance
with these rules  results in the loss of future Low Income  Housing  Credits and
the fractional  recapture of Low Income Housing  Credits  already taken. In most
cases the annual amount of Low Income Housing Credits that an individual can use
is limited to the tax  liability  due on the  person's  last  $25,000 of taxable
income.  The  Local  Limited  Partnerships  may be  unable  to sell the  Housing
Complexes at a profit. Accordingly,  the Partnership may be unable to distribute
any cash to its investors.  Low Income  Housing  Credits may be the only benefit
from an investment in the Partnership.

The Partnership has invested in a limited number of Local Limited  Partnerships.
Such  limited  diversity  means that the  results of  operation  of each  single
Housing  Complex  will have a greater  impact on the  Partnership.  With limited
diversity,   poor   performance   of  one  Housing   Complex  could  impair  the
Partnership's ability to satisfy its investment objectives. Each Housing Complex
is subject to mortgage  indebtedness.  If a Local Limited  Partnership failed to
pay its  mortgage,  it  could  lose  its  Housing  Complex  in  foreclosure.  If
foreclosure  were to occur during the first 15 years,  the loss of any remaining
future Low Income Housing  Credits,  a fractional  recapture of prior Low Income
Housing  Credits,  and a loss of the  Partnership's  investment  in the  Housing
Complex would occur. The Partnership is a limited partner or non-managing member
of each Local Limited Partnership.  Accordingly,  the Partnership will have very
limited rights with respect to management of the Local Limited Partnerships. The
Partnership  will  rely  totally  on the Local  General  Partners.  Neither  the
Partnership's  investments in Local Limited Partnerships,  nor the Local Limited
Partnerships'  investments in Housing Complexes, are 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 interests
in Local Limited Partnerships; limitations on removal of Local General Partners;
limitations on subsidy programs; and possible changes in applicable regulations.
Uninsured  casualties  could result in loss of property  and Low Income  Housing
Credits and recapture of Low Income Housing Credits  previously taken. The value
of real  estate  is  subject  to risks  from  fluctuating  economic  conditions,
including employment rates, inflation,  tax, environmental,  land use and zoning
policies, supply and demand of similar properties,  and neighborhood conditions,
among others.

The  ability of Limited  Partners to claim tax losses  from the  Partnership  is
limited.  The IRS may audit the  Partnership or a Local Limited  Partnership and
challenge  the tax  treatment  of tax items.  The  amount of Low Income  Housing
Credits and tax losses  allocable to the  investors  could be reduced if the IRS
were successful in such a challenge.  The  alternative  minimum tax could reduce
tax benefits from an investment  in the  Partnership.  Changes in tax laws could
also impact the tax benefits from an investment  in the  Partnership  and/or the
value of the Housing Complexes.

No trading market for the Units exists or is expected to develop.  Investors may
be unable to sell their Units  except at a discount  and should  consider  their
Units to be a long-term  investment.  Individual investors will have no recourse
if they  disagree  with actions  authorized by a vote of the majority of Limited
Partners.

                                       8
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                     For the Quarter Ended December 31, 2003
                                   (unaudited)


NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
-------------------------------------------------------------

Exit Strategy
-------------

The IRS  compliance  period for  low-income  housing  tax credit  properties  is
generally  15 years from  occupancy  following  construction  or  rehabilitation
completion.  WNC was one of the first in the industry to offer investments using
the tax credit.  Now these very first programs are completing  their  compliance
period.

With that in mind,  the  Partnership  is continuing to review the  Partnership's
holdings,  with special emphasis on the more mature  properties  including those
that have satisfied the IRS compliance  requirements.  The Partnership's  review
will consider many factors  including  extended use requirements on the property
(such as those due to mortgage restrictions or state compliance agreements), the
condition of the property,  and the tax  consequences  to the investors from the
sale of the property.

Upon identifying  those  properties with the highest  potential for a successful
sale,  refinancing  or  syndication,  the  Partnership  expects to proceed  with
efforts  to  liquidate  those  properties.  The  Partnership's  objective  is to
maximize the investors' return wherever possible and,  ultimately,  to wind down
those  funds  that no longer  provide  tax  benefits  to  investors.  To date no
properties in the Partnership have been selected.

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  Partnerships'  results of operations
and for any  contributions  made and  distributions  received.  The  Partnership
reviews the  carrying  amount of an  individual  investment  in a Local  Limited
Partnership for possible  impairment whenever events or changes in circumstances
indicate that the carrying  amount of such  investment  may not be  recoverable.
Recoverability  of such  investment  is measured by a comparison of the carrying
amount to future  undiscounted  net cash flows  expected to be generated.  If an
investment  is  considered  to be impaired,  the  impairment to be recognized is
measured by the amount by which the carrying  amount of the  investment  exceeds
fair value.  The  accounting  policies  of the Local  Limited  Partnerships  are
generally  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 (see Note 2).

Equity in losses of limited partnerships for the periods ended December 31, 2003
and 2002 have been recorded by the  Partnership  based on nine months of results
estimated  by  management  of the  Partnership.  Management's  estimate  for the
nine-month  period is based on either actual  unaudited  results reported by the
Local Limited  Partnerships or historical  trends in the operations of the Local
Limited Partnerships.  Equity in losses of Local Limited Partnerships  allocated
to the  Partnership  will not be  recognized  to the extent that the  investment
balance would be adjusted below zero. As soon as the investment  balance reaches
zero,  the related  costs of acquiring the  investment  are  accelerated  to the
extent of losses available (see Note 2).


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.


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

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                     For the Quarter Ended December 31, 2003
                                   (unaudited)


NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
-------------------------------------------------------------

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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,  2003,  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
------------------------------

The  Statement of Financial  Accounting  Standards  ("SFAS") No. 130,  Reporting
Comprehensive  Income  established  standards  for the  reporting and display of
comprehensive  income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
for all periods presented, as defined by SFAS No. 130.

New Accounting Pronouncements
-----------------------------

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No. 143,  "Accounting  for Asset
Retirement  Obligations",  which requires that the fair value of a liability for
an asset  retirement  obligation  be  recognized  in the  period  in which it is
incurred with the associated asset retirement costs being  capitalized as a part
of the  carrying  amount of the  long-lived  asset.  SFAS No. 143 also  includes
disclosure   requirements   that  provide  a  description  of  asset  retirement
obligations   and   reconciliation   of  changes  in  the  components  of  those
obligations.  The statement is effective for fiscal years  beginning  after June
15,  2002.  The  adoption of SFAS No. 143 did not have a material  effect on the
Partnership's financial position or results of operations.

In August  2001,  the FASB  issued  SFAS No.  144,  "Impairment  or  Disposal of
Long-Lived  Assets," which addresses  accounting and financial reporting for the
impairment or disposal of long-lived assets. This standard was effective for the
Partnership's financial statements beginning January 1, 2002. The implementation
of SFAS No. 144 did not have a material  impact on the  Partnership's  financial
position or results of operations.
                                       10
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                     For the Quarter Ended December 31, 2003
                                   (unaudited)

 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 --------------------------------------------------------------

New Accounting Pronouncements, continued
----------------------------------------

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical  Corrections."
SFAS No. 145 rescinded three previously  issued  statements and amended SFAS No.
13, "Accounting for Leases." The statement provides reporting standards for debt
extinguishments   and   provides   accounting   standards   for  certain   lease
modifications that have economic effects similar to sale-leaseback transactions.
The statement is effective for certain lease  transactions  occurring  after May
15,  2002 and all other  provisions  of the  statement  shall be  effective  for
financial statements issued on or after May 15, 2002. The implementation of SFAS
No. 145 did not have a material impact on the Partnership's  financial  position
or results of operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or  Disposal  Activities,"  which  updates  accounting  and  reporting
standards for personnel and operational restructurings.  The Partnership adopted
SFAS No. 146 for exit,  disposal  or other  restructuring  activities  initiated
after  December 31,  2002.  The adoption of SFAS No. 146 did not have a material
effect on the Partnership's financial position or results of operations.

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others."  The adoption of FIN 45 did not have a
material  impact  on  the  Partnership's   financial   position  or  results  of
operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and Disclosure - an Amendment to SFAS No. 123." SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair value based method on accounting for stock-based employee compensation. The
implementation  of SFAS No. 148 is not expected to have a material effect on the
Partnership's financial position or results of operations.

In January 2003, the FASB issued Interpretation No. 46 ("FIN46"), "Consolidation
of  Variable  Interest  Entities,"  FIN 46  provides  guidance on when a company
should include the assets,  liabilities,  and activities of a variable  interest
entity  ("VIE")  in  its  financial  statements  and  when  it  should  disclose
information  about its relationship  with a VIE. A VIE is a legal structure used
to conduct activities or hold assets, which must be consolidated by a company if
it is the primary  beneficiary  because it absorbs the  majority of the entity's
expected losses,  the majority of the expected returns,  or both. The provisions
of FIN 46 were  effective  February 1, 2003 for all  arrangements  entered  into
after  January 31, 2003.  FIN 46 is effective in the second  quarter of 2004 for
those  arrangements  entered  into prior to January 31, 2003.  We are  currently
reviewing whether we have  relationships with VIEs and, if so, whether we should
consolidate them and disclose  information about them as the primary beneficiary
or  disclose  information  about  them as an  interest  holder.  We may  have to
consolidate  some of our  equity  investments  in  partnerships  based on recent
interpretations from accounting professionals. We currently record the amount of
our investment in these partnerships as an asset on our balance sheet, recognize
our share of partnership income or losses in our income statement,  and disclose
how we account for material  types of these  investments  in our 2003  financial
statements.   However,  we  do  not  yet  know  the  extent  of  the  impact  of
consolidating  the assets and  liabilities of these  partnerships on our balance
sheet   because  of  the   complexities   of  applying   FIN  46,  the  evolving
interpretations  from  accounting   professionals,   and  the  nuances  of  each
individual partnership.
                                       11

<PAGE>

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

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                     For the Quarter Ended December 31, 2003
                                   (unaudited)

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's  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  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.

Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income.

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, 2003             March 31, 2003
                                                                      -------------------         -------------------

<S>                                                                <C>                         <C>
  Investments per balance sheet, beginning of period                $         5,572,016         $         6,455,167

  Distributions received                                                         (7,250)                    (24,446)
  Equity in losses of limited partnerships                                     (480,357)                   (799,326)
  Amortization of paid acquisition fees and costs                               (44,943)                    (59,379)
                                                                      -------------------         -------------------

  Investments per balance sheet, end of period                      $         5,039,466         $         5,572,016
                                                                      ===================         ===================

</TABLE>
                                       12

<PAGE>

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

                     NOTES TO FINANCIAL STATEMENTS-CONTINUED

                     For the Quarter Ended December 31, 2003
                                   (unaudited)

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------

Selected financial information for the nine months ended December 31, 2003 and
2002 from the unaudited combined condensed financial statements of the limited
partnerships in which the Partnership has invested as follows:


<TABLE>
<CAPTION>
                             COMBINED CONDENSED STATEMENTS OF OPERATIONS
                                                              2003                      2002
                                                      ----------------------     --------------------

<S>                                                <C>                        <C>
  Revenue                                           $            2,503,000     $          2,355,000
                                                      ----------------------     --------------------
  Expenses:
     Operating expenses                                          1,687,000                1,520,000
     Interest expense                                              706,000                  643,000
     Depreciation and amortization                                 832,000                  849,000
                                                      ----------------------     --------------------

  Total expenses                                                 3,225,000                3,012,000
                                                      ----------------------     --------------------

  Net loss                                          $             (722,000)    $           (657,000)
                                                      ======================     ====================

  Net loss allocable to the Partnership             $             (714,000)    $           (650,000)
                                                      ======================     ====================

  Net loss recorded by the Partnership              $             (480,000)    $           (378,000)
                                                      ======================     ====================
</TABLE>


Certain Local Limited  Partnerships have incurred  significant  operating losses
and/or 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  Partner  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,  and
the loss and recapture of the related tax credits could occur.


                                       13
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                For the Quarterly Period Ended September 30, 2003
                                   (unaudited)

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 $136,039 and
     $136,038 were incurred  during the nine months ended  December 31, 2003 and
     2002,  respectively.  The  Partnership  paid  the  General  Partner  or its
     affiliates  $50,000  of those fees  during  each of the nine  months  ended
     December 31, 2003 and 2002.

(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, 2003            March 31, 2003
                                                                 ----------------------      ----------------------

<S>                                                          <C>                         <C>
Reimbursement for expenses paid by the General
   Partners and affiliates                                    $                  1,005    $                  1,890
Asset management fee payable                                                 1,210,473                   1,124,434
                                                                 ----------------------      ----------------------
                                                              $              1,211,478    $              1,126,324
                                                                 ======================      ======================

</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.

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.


                                       14
<PAGE>





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

Forward-Looking Statements

With  the  exception  of  the  discussion  regarding   historical   information,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  and  other   discussions   elsewhere  in  this  Form  10-Q  contain
forward-looking  statements.  Such statements are based on current  expectations
subject to uncertainties and other factors,  which may involve known and unknown
risks that could cause actual  results of operations to differ  materially  from
those, projected or implied.  Further,  certain  forward-looking  statements are
based upon assumptions about future events, which may not prove to be accurate.

Risks and uncertainties inherent in forward-looking  statements include, but are
not  limited  to,  our  future  cash  flows and  ability  to  obtain  sufficient
financing, level of operating expenses, conditions in the low-income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical  results are not necessarily  indicative of the operating results for
any future period.

Subsequent  written and oral  forward-looking  statements  attributable to us or
persons  acting on our behalf  are  expressly  qualified  in their  entirety  by
cautionary  statements  in this Form 10-Q and in other reports we filed with the
Securities and Exchange  Commission.  The following discussion should be read in
conjunction  with the  condensed  Financial  Statements  and the  Notes  thereto
included elsewhere in this filing.

The following discussion and analysis compares the results of operations for the
three and nine months ended  December  31, 2003 and 2002,  and should be read in
conjunction  with the condensed  financial  statements  and  accompanying  notes
included within this report.

Financial Condition

The Partnership's assets at December 31, 2003 consisted primarily of $311,000 in
cash and aggregate  investments  in the eighteen Local Limited  Partnerships  of
$5,039,000.  Liabilities at December 31, 2003 primarily  consisted of $1,211,000
of accrued asset management fees and expenses due to the General Partner.

Results of Operations

Three Months Ended December 31, 2003 Compared to Three Months Ended December 31,
2002.  The  Partnership's  net loss for the three months ended December 31, 2003
was $(189,000),  reflecting an increase of $(1,000) from the $(188,000) net loss
for the three months ended December 31, 2002. The increase in net loss is due to
an  increase  in equity  in  losses  of  limited  partnerships  of  $(1,000)  to
$(126,000) for the three months ended December 31, 2003 from  $(125,000) for the
three months ended December 31, 2002.

                                       15
<PAGE>


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

Nine Months Ended  December 31, 2003 Compared to Nine Months Ended  December 31,
2002. The Partnership's net loss for the nine months ended December 31, 2003 was
$(678,000),  reflecting an increase of $(102,000)  from the  $(576,000) net loss
for the nine months ended  December 31, 2002. The increase in net loss is due to
an  increase  in equity  in losses of  limited  partnerships  of  $(102,000)  to
$(480,000) for the nine months ended  December 31, 2003 from  $(378,000) for the
nine months ended December 31, 2002. The increase in equity in losses is largely
due to the fact  that five  lower  tier  partnerships  investment  balances  had
reached zero,  therefore,  the acquisition  fees and costs associated with those
properties were written off in 2003.

Cash Flows

Nine Months Ended  December 31, 2003 Compared to Nine Months Ended  December 31,
2002. Net cash used during the nine months ended December 31, 2003 was $(60,000)
compared  to net  cash  used in the  nine  months  ended  December  31,  2002 of
$(46,000).  The  decrease  of  $(14,000)  was  primarily  due to a  decrease  in
distributions  received from limited  partnerships  of  approximately  $(13,000)
along with an increase in cash paid for operating costs of $(1,000).

During the nine months ended December 31, 2003 accrued  payables,  which consist
primarily  of  asset  management  fees to the  General  Partner  or  affiliates,
increased by $85,000. 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.

The Partnership  expects its future cash flows,  together with its net available
assets at December 31, 2003, to be sufficient to meet all currently  foreseeable
future cash requirements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risks

         NONE

Item 4.  Controls and Procedures

Within the 90 days prior to the date of this report, the General Partners of the
General  Partner  of the  Partnership  carried  out  an  evaluation,  under  the
supervision  and with the  participation  of Associates'  management,  including
Associate's  Chief  Executive  Officer  and  Chief  Financial  Officer,  of  the
effectiveness  of the  design  and  operation  of the  Partnerships'  disclosure
controls and  procedures  pursuant to Exchange Act Rule 13a- 14. Based upon that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that the Partnership's  disclosure controls and procedures are effective.  There
were no significant  changes in the Partnership's  internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.



                                       16
<PAGE>




Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 6.  Exhibits and Reports on Form 8-K

(a)  Reports on Form 8-K.
     --------------------

1.   A current  report on Form 8-K was  filed on  behalf  of the  registrant  on
     November 4, 2003  reporting  the  resignation  of the  registrant's  former
     principal  independent  accountants,  and the  engagement  of new principal
     independent  accountants under Item 4 of the Form 8-K. An amendment thereto
     on Form 8-K/A was filed on November  10, 2003 and  November 25, 2003 (under
     Item 7 and under  Items 4 and 7,  respectively)  to file as an exhibit  the
     required letter from the former principal independent accountants.  Neither
     the initial report nor the amendments included any financial statements.

(b)  Exhibits.
     ---------

31.1 Certification of the Principal Executive Officer pursuant to Rule 13a-15(e)
     and 15d-15(e), as adopted pursuant to section 302 of the Sarbanes-Oxley Act
     of 2002. (filed herewith)

31.2 Certification of the Principal Financial Officer pursuant to Rule 13a-15(e)
     and 15d-15(e), as adopted pursuant to section 302 of the Sarbanes-Oxley Act
     of 2002. (filed herewith)

32.1 Certification  of the  Principal  Executive  Officer  pursuant to 18 U.S.C.
     section 1350, as adopted pursuant to section 906 of the  Sarbanes-Oxley Act
     of 2002. (filed herewith)

32.2 Certification  of the  Principal  Financial  Officer  pursuant to 18 U.S.C.
     section 1350, as adopted pursuant to section 906 of the  Sarbanes-Oxley Act
     of 2002. (filed herewith)



                                       17
<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 and Chief Executive Officer of WNC & Associates, Inc.

Date:  February 9, 2004





By:  /s/ Thomas J. Riha
     ------------------

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

Date:  February 9, 2004



                                       18