FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                      For the quarter ended March 31, 1998

                                       OR

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

              For the transition period ___________ to ____________
                Commission File Number            33-24235

                   SECURED INVESTMENT RESOURCES FUND, L.P. III
             (Exact name of registrant as specified in its charter)

               Missouri                                     48-6291172
    (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                     Identification No.)

  1100 Main, Suite 2100, Kansas City, Missouri                  64105
    (Address of principal executive offices)                 (Zip Code)

      Registrant's telephone number,                        (816) 421-4670
          including area code

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

                                      None

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

                     Limited Partnership Interests ("Units")

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 such  shorter  periods  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>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III


          Index


PART I.   FINANCIAL INFORMATION                                            Page

Item 1.   Financial Statements (Unaudited):

          Consolidated Balance Sheets -- March 31, 1998
           and December 31, 1997                                            3-4

          Consolidated Statements of Operations -- Three
           Months Ended March 31, 1998 and 1997                               5

          Consolidated Statements of Partnership Deficit --
           Three Months Ended March 31, 1998 and
           the Years Ended December 31, 1997 and 1996                         6

          Consolidated Statements of Cash Flows -- Three
           Months Ended March 31, 1998 and 1997                               7

          Notes to Consolidated Financial Statements                        8-9

Item 2.   Management's Discussion and Analysis
           of Financial Condition and Results
           of Operations                                                     10

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                  11

Item 2.   Changes in Securities                                              12

Item 3.   Defaults Upon Senior Securities                                    12


Item 4.   Submission of Matters to a Vote of
           Security Holders                                                  12

Item 5.   Other Information                                                  12

Item 6.   Exhibits and Reports on Form 8-K                                   12

SIGNATURES                                                                   13

<PAGE>
PART I.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED BALANCE SHEETS

                                             March 31,            December 31,
                                               1998                  1997
                                            (Unaudited)
ASSETS

INVESTMENT PROPERTIES
  Land and buildings                        $ 9,949,757           $14,591,003
  Furniture, fixtures and equipment           1,118,225             1,516,980
                                            -----------           -----------
                                             11,067,982            16,107,983

  Less accumulated depreciation              (3,701,590)           (5,273,994)
                                            -----------           -----------
                                              7,366,392            10,833,989

RESTRICTED DEPOSIT
  Restricted Reserve Fund                       108,778                93,553
                                            -----------         -------------
                                                108,778                93,553

OTHER ASSETS
  Cash                                          332,579               317,315
  Rents and other receivables, less
   allowance of $4,600 in 1998 and
   $27,950 in 1997                                1,166                 7,347
  Prepaid expenses, deposits and other           12,519                30,695
  Due from related parties (Note C)
    Note Receivable                              87,637                85,694
    Syndication Costs                            21,751                21,751
  Debt issuance costs, net of
   accumulated amortization of
   $110,693 in 1998 and $94,880
   in 1997                                      210,846               226,659
                                            -----------         -------------
                                                666,498               689,461
                                            -----------         -------------

      TOTAL ASSETS                          $ 8,141,668          $ 11,617,003
                                            ===========          ============

See notes to consolidated financial statements.

                                       3
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED BALANCE SHEETS--CONT'D.

                                            March 31,        December 31,
                                              1998              1997
                                           (Unaudited)
LIABILITIES AND PARTNERSHIP DEFICIT

  Mortgage debt (Note B)                  $ 8,407,253        $ 12,344,460
  Accounts payable and
   accrued expenses                            90,949             300,653
  Accrued interest                             68,288             141,133
  Unearned revenue                             11,707              14,449
  Tenant security deposits                     79,292             105,913
                                          -----------        ------------

             TOTAL LIABILITIES              8,657,489          12,906,608
                                          -----------        ------------

PARTNERSHIP DEFICIT

  General Partner
    Capital contributions                       2,000               2,000
    Partnership deficit                      (44,313)             (52,051)
                                          -----------        ------------
                                             (42,313)             (50,051)
                                          -----------        ------------

  Limited Partner
    Capital contributions                   3,915,084           3,915,084
    Partnership deficit                   (4,388,592)          (5,154,638)
                                         ------------         ------------

                                            (473,508)          (1,239,554)
                                         ------------         ------------
      TOTAL PARTNERSHIP DEFICIT             (515,821)          (1,289,605)
                                         ------------         ------------

                                         $ 8,141,668         $ 11,617,003
                                         ===========        ============

See notes to consolidated financial statements.
 
                                      4
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                                                   Three Months Ended
                                                        March 31,
                                               1998                    1997
REVENUES
  Rents                                     $ 482,719               $ 698,950
  Interest and other investment income          4,107                  19,476
                                            ---------               ---------
                                              486,826                 718,426
                                            ---------               ---------
OPERATING AND
 ADMINISTRATIVE EXPENSES
  Property operating
   expenses                                   137,513                 258,960
  General and
   administrative
   expenses                                     4,772                  13,074
  Professional services                        33,966                  20,968
  Management Fees                              23,593                  34,298
                                            ---------               ---------
                                              199,844                 327,300
                                            ---------               ---------

NET OPERATING INCOME BEFORE
  DEPRECIATION AND AMORTIZATION               286,982                 391,126
                                            ---------               ---------
  DEPRECIATION AND AMORTIZATION               105,833                 150,220
                                            ---------               ---------

NET OPERATING INCOME                          181,149                 240,906
                                            ---------               ---------

NON-OPERATING EXPENSES
  Interest                                    186,385                 289,200
                                            ---------               ---------

PARTNERSHIP GAIN (LOSS)
BEFORE EXTRAORDINARY ITEM                      (5,236)                (48,294)
                                            ---------               ---------

EXTRAORDINARY ITEM
  Debt Forgiveness                            779,020                    ----
                                            ---------              ----------

PARTNERSHIP GAIN (LOSS)                     $ 773,784               $ (48,294)
                                            =========              ==========

Allocation of gain (loss):
  General Partners                              7,738                    (483)
  Limited Partners                            766,046                 (47,811)
                                             --------              ----------

                                            $ 773,784               $ (48,294)
                                            =========               =========

Partnership gain (loss) per
 limited partnership
  unit                                        $ 79.10                 $ (4.94)
                                              =======                 =======

See notes to consolidated financial statements.

                                       5
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED STATEMENTS OF PARTNERSHIP DEFICIT

Three Months Ended March 31, 1998 (Unaudited)
and the Years Ended December 31, 1997 and 1996

                                        General       Limited
                                        Partners      Partners        Total
 

Balances at January 1, 1996            (44,229)      (663,193)      (707,422)

Partnership gain (loss)                 (3,780)      (374,227)      (378,007)
                                   -----------    -----------    -----------

Balances at December 31, 1996          (48,009)    (1,037,420)    (1,085,429)

Partnership gain (loss)                 (2,042)      (202,134)      (204,176)
                                   -----------    -----------    -----------

Balances at December 31, 1997          (50,051)    (1,239,554)    (1,289,605)

Partnership gain (loss)                  7,738        766,046        773,784
                                   -----------    -----------    -----------

Balances at March 31, 1998         $   (42,313)   $  (473,508)   $  (515,821)
                                   ===========    ===========    ===========

See notes to consolidated financial statements.

                                       6
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                         Three Months Ended
                                                              March 31,
                                                          1998         1997

OPERATING ACTIVITIES
  Partnership gain (loss)                             $ 773,784    $ (48,294)
  Adjustments to reconcile partnership gain
   (loss) to net cash provided by (used in)
   operating activities:
     Depreciation and amortization                      105,832      142,718
     Extraordinary Item                                (779,020)
     Provision for losses on rents
      and other receivables                              (4,600)      15,950
  Changes in assets and liabilities:
     Rent and other receivables                           5,314      (20,946)
     Prepaid expenses, deposits, and other                6,521       12,798
     Accounts payable and
      accrued expenses                                   24,217      (12,837)
     Accrued interest                                    (3,078)      44,663
     Unearned revenue                                      (674)      (4,184)
     Tenant security deposits                            (3,238)       2,924
                                                      ---------    ---------

NET CASH PROVIDED BY
 OPERATING ACTIVITIES                                   125,058      132,792
                                                      ---------    ---------

INVESTING ACTIVITIES
  Purchase of and improvements to
   investment properties                                (10,435)     (10,036)
  Restricted Reserve Funds                              (15,225)     (14,457)
  Interest earned on certificate
   of accrual on Treasury Security                         --        (17,629)
                                                      ---------    ---------

NET CASH PROVIDED BY (USED IN)
 INVESTING ACTIVITIES                                   (25,660)     (42,122)
                                                      ---------    ---------

FINANCING ACTIVITIES
  Note Receivable from Related Party                     (1,943)      (1,776)
  Principal payments on long-term debt                  (82,192)     (11,297)
                                                      ---------    ---------

NET CASH (USED IN)
 FINANCING ACTIVITIES                                   (84,135)     (13,073)
                                                      ---------    ---------

INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                        15,263       77,597

CASH AND CASH EQUIVALENTS BEGINNING
 OF PERIOD                                              317,315       82,985
                                                      ---------    ---------

CASH AND CASH EQUIVALENTS END
 OF PERIOD                                            $ 332,578    $ 160,582
                                                      =========    =========
See notes to consolidated financial statements.

                                       7
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 1998

NOTE A--BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and with the  instructions  for Form  10-Q and  Article  10 of  Regulation  S-X.
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  month  period  ended  March 31,  1998 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 1998.  General  disclosures in the text of the notes are rounded to
the nearest thousand dollars.  For further  information,  refer to the financial
statements and footnotes thereto included in the Partnership's  annual report on
Form 10-K for the year ended December 31, 1997.

NOTE B--MORTGAGE DEBT

Non-recourse mortgage debt consists of the following:

                                               March 31,          December 31,
                                                 1998               1997
Collateralized by Investment Property:

 First Mortgages:
    Greenhills Bicycle Club Apartments      $ 8,010,088           $  8,025,084
    KC Club Apartments                           ----                3,922,211

 Second Mortgage:
    Greenhills Bicycle Club
      Apartments                                397,165                397,165
                                             ----------            -----------

                                            $ 8,407,253           $ 12,344,460
                                            ===========           ============

Interest  expense totaled $186,000 and $289,000 during the first quarter of 1998
and 1997, respectively.

KC Club Apartments
------------------

The   cash   generated   from   operations   for  the  KC  Club  Apartments  was
insufficient to service the mortgage under the current payment requirements. The
Managing General Partner had ongoing  negotiations  with the lender concerning a
complete  restructure of the mortgage and related debt service. The negotiations
were  unsuccessful  and on January 7, 1998 the property was lost to foreclosure.
(Described in Note E.)

                                       8
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE C--RELATED PARTY TRANSACTIONS

SPECS,  Inc.,  a Kansas   Corporation  in   which  James R.  Hoyt,   a   general
partner,  is a  shareholder,  receives  property  management  fees for providing
property  management  services.  SPECS, Inc. also performs various  professional
services for the Partnership,  primarily tax accounting,  audit preparation, SEC
10-Q and 10-K preparation,  and investor services. Property management fees paid
by the Partnership to SPECS, Inc. are as follows:

                                                              March 31,
                                                          1998        1997

Property management fees                              $ 25,593     $ 34,298

Amounts due from related parties consist of
 the following:

                                                       March 31,  December 31,
                                                          1998        1997
General Partners -- Excess
 Syndication Costs                                    $ 21,751      $ 21,751
Secured Investment Resources
 Fund, L.P.                                             87,637        85,694
                                                      --------      --------
                                                      $109,388      $107,445
                                                      ========      ========

NOTE D--CASH DISTRIBUTIONS

No distributions have been made since July 1990. Future  distributions will only
be made from excess cash flow not needed for working capital reserves.


NOTE E - EXTRAORDINARY ITEMS

Gain on forgiveness of debt:

A gain on forgiveness of debt of $779,000 was included as an  extraordinary
item in the January 1998 consolidated  financial  statements of the Partnership.
The gain was due to  forgiveness  of debt related to the  foreclosure  of the KC
Club Apartments  (described in note B). The assets and liabilities as of January
7,  1998  that were  applicable  to the  foreclosed  property  approximated  the
following:

   Investment properties, net of accumulated depreciation        $3,388,000
   Other assets                                                      84,000
   Mortgage payable, including accrued interest                  (3,992,000)
   Other Liabilities                                               (259,000)

                                       9
<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of  Operations

Total  revenues  for the first three  months  decreased  $232,000  (32.2%)  when
compared to the same period in 1997. The majority of the decrease  ($206,000) is
due to the loss of  rental  revenue  caused  by the  foreclosure  of the KC Club
Apartments.  Rental revenue for the first three months at the Greenhills Bicycle
Club  Apartments  increased  $3,000  (0.6%) when  compared to the same period in
1997.  Interest  revenue  decreased  $15,000  (78.9%) from 1997. The decrease in
interest revenue was caused by the August 1997 sale of the Treasury  certificate
of accrual,  held by the  partnership as collateral for the KC Club  Apartments.

Property  operating  expenses  for the  first  three  months  of 1998  decreased
$121,000  (46.9%)  compared to the same period in 1997.  Of the total  decrease,
$107,000  relates  to  the  foreclosure  of the KC  Club  Apartments.  Operating
expenses at the Greenhills  Bicycle Club  decreased by $14,000.  The decrease is
due  primarily to a reduction in payroll,  utilities and  maintenance  expenses.

Professional  service expense  increased  $13,000 (62.0%)  compared to the first
three  months of 1997.  The  majority  of the  increase  is due to legal fees in
connection with the foreclosure of the KC Club Apartments and other  partnership
related matters.

Management fee expense for the first three months  decreased by $11,000  (31.2%)
compared to the same period in 1997.  The decrease is due to the  foreclosure of
the KC  Club  Apartments.  Management  fees  for  the  Greenhills  Bicycle  Club
Apartments increased slightly from 1997, due to the increase in rental revenue.


General and administrative  property operating expenses decreased $8,000 (63.5%)
when compared to the first three months of last year. General and administrative
expenses  for the  first  three  months  of  1998  decreased  $6,000  due to the
foreclosure of the KC Club Apartments.  General and  administrative  expenses at
the Greenhills  Bicycle Club  Apartments  decreased  $2,000 for the same period.

Interest  expense  decreased  $103,000 (35.6%) and depreciation and amortization
expense  decreased  $44,000  (29.5%) when  compared to the first three months of
last year. The decrease in interest  expense and  depreciation  and amortization
expense due to the foreclosure of the KC Club Apartments is $93,000 and $46,000,
respectively.

Liquidity and Capital Resources

During  the  first  three  months  of 1998,  $125,000  of cash was  provided  by
operations,  $26,000 was used in investing  activities  and $84,000 was used for
financing activities.

Based upon the above, the General Partners feel that adequate working capital is
available  to maintain the  solvency of this  entity.  In addition,  the General
Partners also  anticipate  that 1998 cash flow from  operations will continue to
improve  because of strong  occupancy,  rental  rate  increases  and  stabilized
expenses.

The  General   Partners  have   determined  it  prudent  to   discontinue   cash
distributions  until  such  time  that  adequate  working  capital  and  capital
improvements reserves are in place.

                                       10
<PAGE>
PART II. OTHER INFORMATION

     Item 1.   LEGAL PROCEEDINGS

a) Foreclosure:

The  Partnership  was in  negotiations  with  the  mortgage  holder  on KC  Club
Apartments  concerning a restructure of that debt. More favorable interest rates
and  possible  principal  write  downs  were  under  consideration.  Due  to the
inability to  restructure  the debt, on January 7, 1998 the property was lost to
foreclosure.

The assets and  liabilities  as of January 7, 1998 that were  applicable  to the
foreclosed property approximated the following:

   Investment properties, net of accumulated depreciation      $3,388,000
   Other assets                                                    84,000
   Mortgage payable, including accrued interest                (3,992,000)
   Other liabilities                                             (259,000)

Rental  revenue for the KC Club  Apartments for the year ended December 31, 1997
was $853,000 while operating expenses (including interest) were $1,160,000.

b) Change in control:

Nichols Resources,  Ltd,. a general partner of the Registrant  ("Nichols"),  has
filed a civil action against SIR Partners III, L.P.,  also a general  partner of
the Registrant ("SIR Partners III"), James R. Hoyt, the current Managing General
Partner  of  the  Partnership  ("Hoyt"),  the  Hoyt  Group,  Ltd.  And  Hoyt  S.
Partnership,  L.P. in the Circuit Court of Jackson  County,  Missouri on January
27, 1998. Nichols alleges in the petition that the defendants (i) failed to make
the books and records of the Registrant  available to Nichols as required by law
and the Registrant's limited partnership  agreement,  (ii) breached a settlement
agreement that had been entered between,  among other, Nichols, Hoyt and certain
Hoyt  affiliates  pursuant  to which Hoyt had agreed to  effectuate  a change in
management  of the  properties of the  Registrant  as requested by Nichols.  The
relief sought by Nichols was (i) a preliminary order in mandamus  directing Hoyt
and his  affiliates  to file an answer to the  petition or take a  judgement  by
default, (ii) damages, both actual and punitive,  along with interest, costs and
attorneys'  fees,  (iii) a restraining  order and an injunction  restraining and
enjoining  Hoyt and his  affiliates  from  selling  any asset of the  Registrant
without the consent of the limited  partners and the co-general  partners of the
Registrant and (iv) a judgment that Nichols is entitled to inspect the books and
records of the Registrant and that the change in management of the assets of the
Registrant be effected.  The  Registrant  does not believe that the lawsuit will
have a material effect on the operations of the Registrant.

                                       11
<PAGE>
     Item 2.   CHANGES IN SECURITIES

          Inapplicable.

     Item 3.   DEFAULTS UPON SENIOR SECURITIES

          None.

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

          Inapplicable.

     Item 5.   OTHER INFORMATION

          Inapplicable.

     Item 6.   EXHIBIT AND REPORTS ON FORM 8-K

          (a)  Exhibits

                    Exhibit 27 Financial Data Schedule

          (b)  Reports on Form 8-K

                    None

                                       12
<PAGE>
SIGNATURES

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.


                                     SECURED INVESTMENT RESOURCES FUND, L.P. III
                                     A Missouri Limited Partnership
                                     (Registrant)



                                     By:  Nichols Resources, Ltd.
                                          as General Partner


                                          /s/ Christine A. Robinson
                                          Christine A. Robinson
                                          President (Principal Financial and
                                          Chief Accounting Officer)

                                          Date:  January 19, 1999

                                       13