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 June 30, 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, MO 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 -- June 30, 1998
           and December 31, 1997                                            3-4

          Consolidated Statements of Operations -- Three
           and Six Months Ended June 30, 1998 and 1997                        5

          Consolidated Statements of Partnership Deficit --
           Six Months Ended June 30, 1998 and
           the Years Ended December 31, 1997 and 1996                         6

          Consolidated Statements of Cash Flows -- Six
           Months Ended June 30, 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
                                                   June 30,      December 31,
                                                    1998             1997
                                                  (Unaudited)
ASSETS

INVESTMENT PROPERTIES
  Land and buildings                             $ 10,007,357    $ 14,591,003
  Furniture, fixtures and equipment                 1,131,072       1,516,980
                                                 ------------    ------------
                                                   11,138,429      16,107,983

  Less accumulated depreciation                    (3,791,608)     (5,273,994)
                                                 ------------    ------------
                                                    7,346,821      10,833,989

RESTRICTED DEPOSIT
  Restricted Reserve Fund                             124,212          93,553
                                                 ------------    ------------
                                                      124,212          93,553

OTHER ASSETS
  Cash                                                289,798         317,315
  Rents and other receivables, less
   allowance of $4,600 in 1998 and
   $16,200 in 1997                                      9,684           7,347
  Prepaid expenses, deposits and other                  4,998          30,695
  Due from related parties (Note C)
    Note Receivable                                    89,623          85,694
    Syndication Costs                                  21,751          21,751
  Debt issuance costs, net of
   accumulated amortization of
   $126,507 in 1998 and $94,880
   in 1997                                            195,032         226,659
                                                 ------------    ------------
                                                      610,886         689,461
                                                 ------------    ------------

      TOTAL ASSETS                               $  8,081,919    $ 11,617,003
                                                 ============    ============

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

CONSOLIDATED BALANCE SHEETS--CONT'D.

                                                     June 30,     December 31,
                                                       1998            1997
                                                    (Unaudited)
LIABILITIES AND PARTNERSHIP DEFICIT

  Mortgage debt (Note B)                          $  8,391,840    $ 12,344,460
  Accounts payable and
   accrued expenses                                     67,474         300,653
  Accrued interest                                      60,188         141,133
  Unearned revenue                                       9,461          14,449
  Tenant security deposits                              76,618         105,913
                                                  ------------    ------------

      TOTAL LIABILITIES                              8,605,581      12,906,608
                                                  ------------    ------------

PARTNERSHIP DEFICIT

  General Partner
    Capital contributions                                2,000           2,000
    Partnership deficit                                (44,392)        (52,051)
                                                  ------------    ------------
                                                       (42,392)        (50,051)
                                                  ------------    ------------
  Limited Partner
    Capital contributions                            3,915,084       3,915,084
    Partnership deficit                             (4,396,354)     (5,154,638)
                                                  ------------    ------------

                                                      (481,270)     (1,239,554)
                                                  ------------    ------------
      TOTAL PARTNERSHIP DEFICIT                       (523,662)     (1,289,605)
                                                  ------------    ------------

                                                  $  8,081,919    $ 11,617,003
                                                  ============    ============

See notes to consolidated financial statements.

                                       4
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
                                                    Six Months Ended            Three Months Ended
                                                       June 30,                     June 30,
                                                  1998           1997            1998         1997
<S>                                           <C>            <C>           <C>            <C>
REVENUES
  Rents                                      $   975,232    $ 1,395,189    $   492,513    $   696,239
  Interest                                         9,061         39,351          4,954         19,875
                                             -----------    -----------    -----------    -----------
                                                 984,293      1,434,540        497,467        716,114
                                             -----------    -----------    -----------    -----------
OPERATING AND
 ADMINISTRATIVE EXPENSES
  Property operating
   expenses                                      279,215        544,691        141,702        285,731
  General and
   administrative
   expenses                                       16,563         23,876         11,791         10,802
  Professional services                           67,118         43,870         33,152         22,902
  Management Fees                                 47,179         68,464         23,586         34,166
  Depreciation and Amortization                  211,665        300,439        105,833        150,219 
                                             -----------    -----------    -----------    -----------
                                                 621,740        981,340        316,064        503,820
                                             -----------    -----------    -----------    -----------

 NET OPERATING INCOME                            362,553        453,200        181,403        212,294
                                             -----------    -----------    -----------    -----------
NON-OPERATING EXPENSES
  Interest                                       375,630        572,640        189,245        283,440
                                             -----------    -----------    -----------    -----------
PARTNERSHIP GAIN (LOSS)
    BEFORE EXTRAORDINARY ITEM                    (13,077)      (119,440)        (7,842)       (71,146)
                                             -----------    -----------    -----------    -----------
ETRAORDINARY ITEM
 Debt Forgiveness                                779,020           --             --             --
                                             -----------    -----------    -----------    -----------
PARTNERSHIP GAIN (LOSS)                      $   765,943    $  (119,440)   $    (7,842)   $   (71,146)
                                             ===========    ===========    ===========    ===========
Allocation of gain (loss):
  General Partners                                 7,659         (1,194)           (78)          (711)
  Limited Partners                               758,284       (118,246)        (7,764)       (70,435)
                                             -----------    -----------    -----------    -----------
                                             $   765,943    $  (119,440)   $    (7,842)   $   (71,146)
                                             ===========    ===========    ===========    ===========
Partnership gain (loss) per
 limited partnership
  unit                                       $     78.29    $    (12.21)   $      (.80)   $     (7.27)
                                             ===========    ===========    ===========    ===========
</TABLE>
See notes to consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF PARTNERSHIP DEFICIT

Six Months Ended June 30, 1998 (Unaudited) and the Years Ended December 31, 1997
and 1996

<TABLE>
<CAPTION>
                                              General          Limited
                                             Partners         Partners         Total

<S>                                         <C>              <C>             <C>
Balances at January 1, 1995                  (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)                        7,659            758,284         765,943
                                           ---------        -----------     -----------

Balances at June 30, 1998                   $(42,392)        $ (481,270)     $ (523,662)
                                            ========         ==========      ==========
</TABLE>

See notes to consolidated financial statements.


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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                         Six Months Ended
                                                              June 30,
                                                         1998         1997
OPERATING ACTIVITIES
  Partnership gain (loss)                           $ 765,943    $(119,440)
  Adjustments to reconcile partnership gain
  (loss) to net cash provided by (used in)
  operating activities:
     Depreciation and amortization                    211,665      300,440
     Provision for losses on rents
      and other receivables                            (4,600)      19,400
     Extraordinary item                              (779,020)        --
  Changes in assets and liabilities:
     Rent and other receivables                        (3,205)     (27,847)
     Prepaid expenses, deposits, and other             14,045      (30,452)
     Accounts payable and
      accrued expenses                                    741       56,403
     Accrued interest                                 (11,178)      81,133
     Unearned revenue                                  (2,922)      (7,880)
     Tenant security deposits                          (5,912)      (1,924)
                                                   ---------    ---------

NET CASH PROVIDED BY
OPERATING ACTIVITIES                                  185,557      269,833
                                                    ---------    ---------

INVESTING ACTIVITIES
  Purchase of and improvements to
    investment properties                             (80,882)     (25,598)
  Restricted Reserve deposits                         (30,659)     (29,104)
  Interest earned on certificate
    of accrual on Treasury Security                      --        (35,257)
                                                    ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                (111,541)     (89,959)
                                                    ---------    ---------

FINANCING ACTIVITIES
  Note Receivable from Related Party                   (3,929)      (3,592)
  Principal payments on long-term debt                (97,604)     (25,388)
  Debt issuance costs                                    --        (16,500)
                                                    ---------    ---------

NET CASH USED IN FINANCING ACTIVITIES                (101,533)     (45,480)
                                                    ---------    ---------

INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                     (27,517)    (134,394)

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

CASH AND CASH EQUIVALENTS END
 OF PERIOD                                          $ 289,798    $ 217,379
                                                    =========    =========

See notes to consolidated financial statements.


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

NOTES TO FINANCIAL STATEMENTS (Unaudited)

June 30, 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  six  month  period  ended  June  30,  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:

                                               June 30,      December 31,
                                                1998            1997
Collateralized by Investment
  Property:
  First Mortgages:

    Greenhills Bicycle Club
      Apartments                              $7,994,675      $8,025,084
    KC Club Apartments                          ----           3,922,211

  Second Mortgage:

    Greenhills Bicycle Club
      Apartments                                 397,165         397,165
                                            ------------   -------------

                                             $ 8,391,840     $12,344,460
                                             ===========     ===========

Interest  expense  totaled  $376,000 and $573,000 during the first six months 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

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:

                                                    June  30,
                                               1998            1997

Property management fees                    $ 47,179         $ 68,464

Amounts due from related parties consist of the following:

                                              June 30,        December 31,
                                                1998             1997
General Partners -- Excess
 Syndication Costs                            $ 21,751         $ 21,751
Secured Investment Resources
  Fund, L.P.                                    89,623           85,694
                                               -------          -------
                                             $ 111,374         $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

     Results of Operations

Total revenues for the first six months decreased $450,000 (31.4%) when compared
to the same period in 1997.  The majority of the decrease  ($439,000)  is due to
the loss of rental revenue caused by the foreclosure of the KC Club  Apartments.
Rental  revenue  for  the  first  six  months  at the  Greenhills  Bicycle  Club
Apartments  increased  $18,000  (1.8%) when compared to the same period in 1997.
This increase is due to a strong rental market, which allowed the Partnership to
increase rental rates upon lease  renewals.  These higher market rates are being
achieved with fewer rent concessions. Interest revenue decreased $30,000 (77.0%)
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 six months of 1998 decreased $265,000
(48.7%)  compared to the same period in 1997.  Of the total  decrease,  $225,000
relates to the foreclosure of the KC Club Apartments.  Operating expenses at the
Greenhills Bicycle Club decreased by $40,000. The decrease is due primarily to a
reduction in payroll and utilities expenses.

Professional  services expense  increased  $23,000 (53.0%) compared to the first
six  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 six months  decreased  by $21,000  (31.1%)
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 $7,000 (30.6%)
when compared to the first six months of last year.  General and  administrative
expenses  for  the  first  six  months  of  1998  decreased  $11,000  due to the
foreclosure of the KC Club Apartments.  General and  administrative  expenses at
the Greenhills Bicycle Club Apartments increased $4,000 for the same period.

Interest  expense  decreased  $197,000 (34.4%) and depreciation and amortization
expense  decreased $89,000 (29.5%) when compared to the first six months of last
year. The decrease in interest expense and depreciation and amortization expense
due to the  foreclosure  of the KC  Club  Apartments  is  $185,000  and  $91,000
respectively.


Liquidity and Capital Resources

During  the  first  six  months  of  1998,  $185,000  of cash  was  provided  by
operations,  $112,000 was used in investing activities and $102,000 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) 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:  March 3, 1999

                                       13