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 September 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

                                       1
<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III

                     Index

PART I.  FINANCIAL INFORMATION                                             Page

Item 1.   Financial Statements (Unaudited):

          Consolidated Balance Sheets -- September 30, 1998
           and December 31, 1997                                            3-4

          Consolidated Statements of Operations -- Three
           and Nine Months Ended September 30, 1998 and 1997                  5

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

          Consolidated Statements of Cash Flows -- Nine
           Months Ended September 30, 1998 and 1997                           7

          Notes to Consolidated Financial Statements                       8-10

Item 2.   Management's Discussion and Analysis
           of Financial Condition and Results
           of Operations                                                  11-12

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                  13

Item 2.   Changes in Securities                                              14

Item 3.   Defaults Upon Senior Securities                                    14


Item 4.   Submission of Matters to a Vote of
           Security Holders                                                  14

Item 5.   Other Information                                                  14

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

SIGNATURES                                                                   15

                                       2
<PAGE>
PART I.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS

                                               September  30,      December 31,
                                                  1998                 1997
                                               (Unaudited)
ASSETS
INVESTMENT PROPERTIES
     Land and  buildings                      $  10,008,907       $  14,591,003
     Furniture,  fixtures,  and equipment         1,163,146           1,516,980
                                               ------------         -----------
                                                 11,172,053          16,107,983
                                               ------------         -----------
     Less  accumulated  depreciation             (3,881,628)         (5,273,994)
                                               ------------         -----------
                                                  7,290,425          10,833,989
RESTRICTED DEPOSIT
     Restricted Reserve Fund                        139,214              93,553
                                               ------------         -----------
                                                    139,214              93,553
OTHER ASSETS
     Cash                                           209,399             317,315
     Rents and receivables, less allowance
       of $4,600 in 1998 and $16,200 in 1997         22,453               7,347
     Prepaid expenses, deposits and other             7,174              30,695
     Due from related parties (Note C)
       Note Receivable                                 ----              85,694
       Syndication Costs                               ----              21,751
     Debt issuance costs,  net of
       accumulated  amortization of
       $142,320 in 1998 and $94,880 in 1997         179,219             226,659
                                               ------------         -----------
                                                    418,245             689,461
                                               ------------         -----------
TOTAL ASSETS                                    $ 7,847,884        $ 11,617,003
                                               ============         ===========

See notes to consolidated financial statements.

                                       3


<PAGE>

SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS--CONT'D.

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

  Mortgage debt (Note B)              $ 7,978,912           $ 12,344,460
  Accounts payable and
   accrued expenses                       102,953                300,653
  Accrued interest                         60,188                141,134
  Unearned revenue                          9,356                 14,449
  Tenant security deposits                 74,810                105,913
                                          -------               --------

      TOTAL LIABILITIES                 8,226,219             12,906,609
                                       ----------            -----------

PARTNERSHIP DEFICIT

  General Partners
    Capital contributions                   2,000                  2,000
    Partnership deficit                  (42,939)                (52,051)
                                        ---------               --------
                                         (40,939)                (50,051)
                                        ---------               --------
  Limited Partners
    Capital contributions              3,915,084               3,915,084
    Partnership deficit               (4,252,480)             (5,154,638)
                                     ------------            -----------

                                        (337,396)             (1,239,554)
                                       ----------            -----------
      TOTAL PARTNERSHIP DEFICIT         (378,335)             (1,289,606)
                                       ----------            -----------

                                      $ 7,847,884           $ 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>
                                                  Nine Months Ended            Three Months Ended
                                                     September 30,               September 30,
                                                 1998           1997           1998          1997
<S>                                              <C>            <C>            <C>           <C> 
REVENUES
  Rents                                      $ 1,483,924    $ 2,070,788    $   508,693    $   675,599
  Interest                                        11,696         60,398          2,634         21,047
                                             -----------    -----------    -----------    -----------
                                               1,495,620      2,131,186        511,327        696,646
                                             -----------    -----------    -----------    -----------
OPERATING AND
 ADMINISTRATIVE EXPENSES
  Property operating
   expenses                                      457,415        847,451        178,200        302,760
  General and
   administrative
   expenses                                       28,160         38,919         11,597         15,043
  Professional services                          124,622         58,368         57,504         14,498
  Management Fees                                 71,391        101,934         24,212         33,470
  Depreciation and Amortization                  317,496        450,659        105,832        150,220 
                                             -----------    -----------    -----------    -----------
                                                 999,084      1,497,331        377,345        515,991
                                             -----------    -----------    -----------    -----------

    NET OPERATING INCOME                         496,536        633,855        133,982        180,655
                                             -----------    -----------    -----------    -----------
NON-OPERATING EXPENSES
  Interest                                       561,448        852,725        185,818        280,085
                                             -----------    -----------    -----------    -----------

PARTNERSHIP GAIN(LOSS)
BEFORE EXTRAORDINARY ITEMS                       (64,912)      (218,870)       (51,836)       (99,430)
                                              -----------    -----------    -----------    -----------

EXTRAORDINARY ITEMS
  Gain on forgiveness of debt                    779,020           --             --             --
  Gain on early extinguishment of debt           197,164           --          197,164           --

                                                 976,184           --          197,164           --

PARTNERSHIP GAIN (LOSS)                      $   911,272    $  (218,870)   $   145,328    $   (99,430)
                                              ===========    ===========    ===========    ============
Allocation of loss:
  General Partners                                (9,113)        (2,189)        (1,453)          (994)
  Limited Partners                              (902,159)      (216,681)      (143,875)       (98,436)
                                              -----------    -----------    -----------    -----------
                                             $  (911,272)   $  (218,870)   $  (145,328)   $   (99,430)
                                              ===========    ===========    ===========    ===========

Partnership loss per
 limited partnership
 unit                                        $    (93.15)   $    (22.37)   $    (14.86)   $    (10.16)
                                              ===========    ===========    ===========    ===========
</TABLE>
See notes to consolidated financial statements.

                                       5
<PAGE>

SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF PARTNERSHIP DEFICIT

<TABLE>
Nine Months Ended  September 30, 1998 (Unaudited)
and the Years Ended December , 1997 and 1996

<CAPTION>
                                              General        Limited
                                             Partners       Partners          Total

<S>                                          <C>           <C>            <C>      
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)                        9,113        902,159        911,272
                                         -----------    -----------    -----------

Balances at September 30, 1998           $   (40,938)   $  (337,395)   $  (378,333)
                                          ===========    ===========    ===========

</TABLE>
See notes to consolidated financial statements.

                                       6
<PAGE>

SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                           September 30,
                                                         1998         1997
<S>                                                      <C>          <C> 
OPERATING ACTIVITIES
  Partnership gain (loss)                             $ 911,272    $(218,870)
  Adjustments to reconcile partnership gain
  (loss) to net cash provided by
   operating activities:
     Depreciation and amortization                      317,497      434,159
     Provision for losses on rents
      and other receivables                               4,600       27,200
     Extraordinary items:
      Gain on forgiveness of debt                      (779,020)        --
      Gain on early extinguishment of debt             (197,164)        --
  Changes in assets and liabilities:
     Rent and other receivables                         (25,172)     (32,803)
     Prepaid expenses, deposits, and other               11,865      (13,649)
     Accounts payable and
      accrued expenses                                   36,219       87,405
     Accrued interest                                   (11,177)      95,062
     Unearned revenue                                    (3,028)      (9,369)
     Tenant security deposits                            (7,720)       5,340
                                                      ---------    ---------

NET CASH PROVIDED BY
OPERATING ACTIVITIES                                    258,172      374,475
                                                      ---------    ---------

INVESTING ACTIVITIES
  Improvements to investment properties                (114,505)     (48,948)
  Restricted Reserve deposits                           (45,661)     (43,991)
  Interest earned on certificate
   of accrual on Treasury Security                         --        (52,886)
  Excess Syndication Costs                               21,751         --
                                                      ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                  (138,415)    (145,825)
                                                      ---------    ---------

FINANCING ACTIVITIES
  Note Receivable from Related Party                     85,694       (5,450)
  Principal payments on long-term debt                 (313,367)     (42,634)
                                                      ---------    ---------

NET CASH USED IN FINANCING ACTIVITIES                  (227,673)     (48,084)
                                                      ---------    ---------

INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                      (107,916)     180,566

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

CASH AND CASH EQUIVALENTS END
 OF PERIOD                                            $ 209,399    $ 263,551
                                                      =========    =========
</TABLE>

See notes to consolidated financial statements.

                                       7
<PAGE>

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

September 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 nine month  period ended  September  30, 1998 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 1998. 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:

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

    Greenhills Bicycle Club
      Apartments                                  $ 7,978,912   $ 8,025,084
    KC Club Apartments                                   --       3,922,211

  Second Mortgage:

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

                                                  $ 7,978,912   $12,344,460
                                                  ===========   ===========

Interest  expense totaled  $561,000 and $853,000 during the first nine 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
NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE B--MORTGAGE DEBT--CONT=D


Greenhills Bicycle Club Apartments

On July 8,  1996 the  partnership  refinanced  the  matured  first  mortgage  on
Greenhills Bicycle Club Apartments. The terms of the new mortgage are $8,100,000
at 9.0% interest with monthly  principal and interest  payments in the amount of
$65,000 through the loan maturity date of August 1, 2001.

In addition, a second mortgage note was signed by the Partnership.  The terms of
the  note are  $400,000  with  interest  paid  monthly  at the rate of 9% with a
maturity  date of July 31, 2001 at which time the  principal  shall be due.  The
past due real estate taxes on Greenhills  Bicycle Club  Apartments  were paid in
full from a portion  of the  proceeds  of this note.  The note had a  prepayment
discount option which could be exercised before July 31, 1998. The note was paid
in full on July 27, 1998 for $200,000 plus interest of $3,000 (described in note
E).

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:

                                                 September 30,
                                             1998              1997

Property management fees                   $ 71,391         $ 101,934


Amounts due from related parties consist of the following:

                                        September 30,      December 31,
                                             1998             1997
General Partners -- Excess
 Syndication Costs                         $  ----           $ 21,751
Secured Investment Resources
  Fund, L.P.                                  ----             85,694
                                           -------            -------
                                           $  ----           $107,445
                                          ========           ========

(refer to Part II, item 1)

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.

                                       9
<PAGE>

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

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)

Gain on early extinguishment of debt:

The second  mortgage on the Greenhills  Bicycle Club Apartments was paid in full
on July 27, 1998 at a discount  (described  in note B). The note balance on July
27, 1998 was $ 397,000. The note was paid in full for $203,000 of which $200,000
was  principal and $3,000 was  interest.  The  resulting  $197,000 gain on early
extinguishment of debt was included as an extraordinary  item in the August 1998
consolidated financial statements of the partnership.

NOTE F - ADDITIONAL CASH FLOW INFORMATION

                                                            September 30,
                                                         1998            1997
                                                      ----------       --------



Noncash Investing and Financing Activities

    Assets exchanged for the forgiveness of debt     $ 3,405,000          ----
    Debt forgiven in exchange for assets              (4,251,000)         ----

Additional Cash Payment Information

    Interest Paid                                      642,393          757,663

                                       10

<PAGE>

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

     Results of Operations

Total  revenues  for the first  nine  months  decreased  $636,000  (29.8%)  when
compared to the same period in 1997. The majority of the decrease  ($640,000) is
due to the loss of  rental  revenue  caused  by the  foreclosure  of the KC Club
Apartments.  Rental revenue for the first nine months at the Greenhills  Bicycle
Club  Apartments  increased  $53,000  (3.5%) 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
$49,000  (80.6%) 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.

Operating  expenses for the first nine months of 1998 decreased $390,000 (46.0%)
compared to the same period in 1997. Of the total decrease,  $362,000 relates to
the foreclosure of the KC Club Apartments.  Operating expenses at the Greenhills
Bicycle Club decreased by $28,000.  The decrease is due primarily to a reduction
in payroll, utilities and insurance expenses. There was not a full-time  manager
salary for the entire year, resulting in a decrease in payroll expense.  Utility
expenses decreased primarily due to lower usage of utilities  in  vacant  units.
Nichols Resources entered into a new insurance contract in August 1998.  The new
contract  is  at  a  lower rate, resulting in a decrease in insurance expense in
1998.

Professional  service expense  increased  $66,000 (113,5%) compared to the first
nine  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 nine months  decreased by $31,000  (30.0%)
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 $11,000 (27.6%)
when compared to the first nine months of last year.  General and administrative
expenses  for the  first  nine  months  of  1998  decreased  $20,000  due to the
foreclosure of the KC Club Apartments.  General and  administrative  expenses at
the Greenhills Bicycle Club Apartments increased $9,000 for the same period. The
increase was due primarily to an increase in screening  expense  and  collection
fees.  The increase in screening expense is offset by an  increase  reported  in
application  income.  The  increase  in  collection  fees  is  due  to increased
collection  efforts.  License fees also increased due to zoning requirements for
directional signage for the Greenhills Bicycle Club Apartments.

Interest  expense  decreased  $291,000 (34.2%) and depreciation and amortization
expense  decreased  $133,000  (29.5%) when  compared to the first nine months of
last year. The decrease in interest  expense and  depreciation  and amortization
expense  due to the  foreclosure  of the KC  Club  Apartments  is  $278,000  and
$137,000 respectively.

The Partnership anticipates that the operating results for the first nine months
will be representative of the results for the remaining portion of the year.

Liquidity and Capital Resources

During the first nine months of 1998,  $258,172 of working  capital was provided
by  operations,  $138,415 was consumed in investing  activities and $227,673 was
used for financing activities.

As  a  result  of the  foreclosure of the KC Club Apartments,  the liquidity and
financial condition  of  the  Partnership  is  expected  to  improve.  The  cash
generated from operations for the KC Club Apartments was insufficient to service
the mortgage on the property.  The 1997  Net  Operating  Income  after  interest
expense  of  the  the remaining property, the Greenhill Bicycle Club Apartments,
was $395,000.

                                       11

<PAGE>

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

Liquidity and Capital Resources - cont'd

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.




Year 2000:

Management is in the process of evaluating the risks  associated  with potential
Year 2000 computer  problems.  It is our opinion that the potential on-site Year
2000 problems at the Greenhills Bicycle Club apartments will not have a material
impact on property operations. The computer and on-site software utilized in the
day to day  operations of the property have been upgraded as of January 12, 1999
at a cost of  approximately  $4,000  with a Year  2000  compliant  software.  No
additional  material  expenditures  are  planned  at this  time  for  Year  2000
compliance.  There are no known  non-information  technology systems (elevators,
fire alarms,  security  systems  etc.)  on-site that would be impacted by a Year
2000 problem. There are no elevators, central  fire  alarm  systems  or  central
security systems on the property.  Management believes that the mission critical
systems are prepared for  the  Year  2000,  and  non-critical  systems are being
evaluated.

Management   believes  the  worst  case  scenario  that  could  impact  property
operations  would be if third-party  utility  providers  (electricity and water)
failed to provide  services to the  property due to a Year 2000 problem in their
systems.  Management has contacted the utility providers, received and  reviewed
their plans to address potential  Year  2000  issues.  Management  believes  the
likelihood of the utility companies failure to provide services is  remote,  and
as  such,  management has not developed contingency  plans  to  deal  with  this
possibility.  Management believes that if the utility companies fail to  provide
services, the failure will be system-wide, and not confined to the property  and
therefore the investment value of the property will not be impacted.


(Remainder of this page left blank intentionally)

                                       12
<PAGE>

PART II. OTHER INFORMATION


     Item 1.   LEGAL PROCEEDINGS

a) Foreclosure:

As of December 31, 1997, 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:

On July 21st, 1998, Nichols Resources Ltd., a general partner of the Partnership
("Nichols"),  Bond Purchase,  L.L.C.  ("Bond") and David L. Johnson ("Johnson ")
and other affiliates of Johnson,  along with the Partnership,  SIR Partners III,
L.P., General Partner of the Partnership ("SIR Partners III"),  SPECS, Inc., the
company  which  provides  the  Partnership   management  and  investor  services
("SPECS")  and  James R.  Hoyt,  Managing  General  Partner  of the  Partnership
("Hoyt"),  entered into a certain  Settlement  Agreement and Mutual Release (the
"Agreement").  The Agreement settled a dispute which had arisen between Nichols,
SIR Partners III and Hoyt,  general  partners of the Partnership over the proper
course of action to be taken for the  Partnership.  This dispute resulted in the
filing of a civil action in the Circuit Court of Jackson County, Missouri.

Pursuant to the Agreement, Nichols has agreed (i) to pay $100,000 in cash to SIR
Partners III and Hoyt,  $21,751 of which will be paid by Hoyt to the Partnership
to pay a receivable  owed by  affiliates  of the  Partnership  for unpaid excess
syndication costs and expenses  currently shown on the  Partnership=s  financial
statements  and (ii) to dismiss the civil  actions  filed.  In exchange  for the
$100,000 in cash and the  dismissal of the civil  actions,  SIR Partners III and
Hoyt have agreed (i) to transfer their General Partnership  interests to Nichols
and (ii) to withdraw as Managing General Partner and general partners. Under the
Partnership's  Amended  and  Restated  Agreement  of Limited  Partnership  dated
December 6, 1988 (the "Partnership  Agreement"),  such transfers and withdrawals
are subject to the majority  vote of the  Partnership's  limited  partners  (the
"Limited Partners"). Hoyt and SIR Partners III have also agreed that Nichols, as
general  partner  of the  Partnership,  shall  have the right to  designate  the
management  company to manage the assets of the  Partnership  and to execute all
documents to effectuate the release of the current management contract.

Nichols,  as a general  partner of the  Partnership,  intends to call for a vote
without a meeting  of the  Limited  Partners,  file a proxy  statement  with the
Securities and Exchange Commission and solicit proxies from the Limited Partners
to seek  approval  from the  Limited  Partners  to the  transfer  of the general
partnership  interests,  the  withdrawal of Hoyt and SIR Partners III as general
partners of the  Partnership  and the  replacement  of Hoyt as Managing  General
Partner in favor of Nichols.  Hoyt and SIR Partners III have agreed to use their
best efforts to assist in obtaining  approval  from the limited  partners of the
withdrawal of Hoyt and SIR Partners III as General  Partners of the partnership.
In the  event the  majority  approval  is  obtained,  Nichols  shall be the sole
general partner of the Partnership.

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<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

                    A Form 8-K was filed on July 31, 1998 reporting a settlement
                    agreement  between general partners of the Registrant.


                    A Form 8-K was filed on November 13, 1998 reporting the
                    dismissal of the Registrants auditors, BDO Seidman, LLP, and
                    the resulting selection of Baird Kurtz & Dobson as auditors
                    for the year ending December 31, 1998.


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<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



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