UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   ----------

                                   FORM 10-QSB

  X     QUARTERLY REPORT UNDER SECTION  13 OR  15(d) OF  THE SECURITIES EXCHANGE
-----   ACT OF 1934

                  For the quarterly period ended June 30, 1999

                                       OR

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

        For the transition period from ______________ to _______________.

                         Commission file number 0-16615
                                                -------


                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                        A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
                                   Registrant

            California                                     68-0062480
---------------------------------             ----------------------------------
       State of Jurisdiction                  I.R.S. Employer Identification No.


2401 Kerner Boulevard, San Rafael, California              94901-5527
--------------------------------------------------------------------------------
   Address of Principal Executive Offices                   Zip Code

       Registrant's telephone number, including area code: (415) 485-4500
                                                           --------------


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
preceding requirements for the past 90 days.

                               Yes  X       No
                                   ---         ---

516,642 Units of Limited  Partnership  Interest were  outstanding as of June 30,
1999.

Transitional small business disclosure format:

                               Yes          No  X
                                   ---         ---

                                  Page 1 of 12
<PAGE>

                          Part I. Financial Information
                          -----------------------------
                          Item 1. Financial Statements
                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                 (Amounts in Thousands Except for Unit Amounts)
                                   (Unaudited)
                                                          June 30,  December 31,
                                                            1999        1998
                                                            ----        ----
ASSETS

Cash and cash equivalents                                $     884   $   1,316

Accounts receivable (net of allowance for losses on
   accounts receivable of $0 and $57 at June 30, 1999
   and December 31, 1998, respectively)                         85         132

Notes receivable (net of allowance for losses on notes
   receivable of $21 at June 30, 1999 and December 31,
   1998)                                                        43          43

Cable systems, property and equipment (net of
   accumulated depreciation of $0 and $811 at June 30,
   1999 and December 31, 1998, respectively)                  --         2,859

Cable subscriber lists (net of accumulated
   amortization of $0 and $570 at June 30, 1999 and
   December 31, 1998, respectively)                           --           946

Investment in joint ventures                                   192         205

Other assets                                                    69          54
                                                         ---------   ---------

     Total Assets                                        $   1,273   $   5,555
                                                         =========   =========

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                 $     226   $     593
                                                         ---------   ---------

     Total Liabilities                                         226         593
                                                         ---------   ---------

Partners' Capital

   General Partner                                           2,072       2,058

   Limited Partners, 600,000 units authorized, 528,151
     units issued and 516,642 and 516,662 units
     outstanding at June 30, 1999 and December 31, 1998,
     respectively                                           (1,080)      2,888

   Accumulated other comprehensive income                       55          16
                                                         ---------   ---------

     Total Partners' Capital (Deficit)                       1,047       4,962
                                                         ---------   ---------

     Total Liabilities and Partners' Capital (Deficit)   $   1,273   $   5,555
                                                         =========   =========

        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>

                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
               (Amounts in Thousands Except for Per Unit Amounts)
                                   (Unaudited)

                                           Three Months Ended  Six Months Ended
                                                June 30,           June 30,
                                            1999      1998      1999      1998
                                            ----      ----      ----      ----
INCOME
   Gain on (adjustment to) sale of
     cable system                         $   (15)  $  --     $ 1,960   $  --
   Rental income                               71        61        80       131
   Cable subscriber revenue                  --         422        54       842
   Equity in earnings (losses) from
     joint ventures, net                       (7)        9       (13)       20
   Gain on sale of securities                --          32      --          32
   Other income                                67        44       143        74
                                          -------   -------   -------   -------
     Total Income                             116       568     2,224     1,099
                                          -------   -------   -------   -------

EXPENSES
   Depreciation and amortization             --         119      --         239
   Cable system operations                      6       251        29       486
   Lease related operating expenses             2         5         3        13
   Management fees to General Partner
     and affiliate                              3        22       268        43
   Reimbursed administrative costs to
     General Partner                           31        25        62        56
   Legal expense                               22        69        68       110
   General and administrative expenses         33        54        67        91
                                          -------   -------   -------   -------
     Total Expenses                            97       545       497     1,038
                                          -------   -------   -------   -------

NET INCOME                                     19        23     1,727        61

Other comprehensive income:
   Unrealized gains on securities:
     Unrealized holding gains arising
       during period                           24        32        39        32
     Less:  reclassification adjustment
            for gains included in net
            income                           --         (32)     --         (32)
                                          -------   -------   -------   -------
   Other comprehensive income                  24      --          39      --
                                          -------   -------   -------   -------
COMPREHENSIVE INCOME                      $    43   $    23   $ 1,766   $    61
                                          =======   =======   =======   =======


NET INCOME PER LIMITED
   PARTNERSHIP UNIT                       $   .03   $   .05   $  3.31   $   .12
                                          =======   =======   =======   =======

DISTRIBUTIONS PER LIMITED
   PARTNERSHIP UNIT                       $ 10.99   $  --     $ 10.99   $  2.50
                                          =======   =======   =======   =======

ALLOCATION OF NET INCOME:
     General Partner                      $  --     $     1   $    14   $     1
     Limited Partners                          19        22     1,713        60
                                          -------   -------   -------   -------
                                          $    19   $    23   $ 1,727   $    61
                                          =======   =======   =======   =======

        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)
                                   (Unaudited)

                                                               Six Months Ended
                                                                    June 30,
                                                                1999      1998
                                                                ----      ----
Operating Activities:
--------------------
   Net income                                                 $ 1,727   $    61
   Adjustments to reconcile net income to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                             --         239
       Gain on sale of cable system                            (1,960)     --
       Gain on sale of equipment                                   (3)       (9)
       Equity in (earnings) losses from joint ventures, net        13       (20)
       Gain on sale of securities                                --         (32)
       Provision for (reversal of) losses on accounts
         receivable                                               (10)        9
       Decrease (increase) in accounts receivable                 (44)       50
       Increase (decrease) in accounts payable and
         accrued expenses                                        (293)       46
       Decrease (increase) in other assets                         24        (2)
                                                              -------   -------

Net cash provided by (used in) operating activities              (546)      342
                                                              -------   -------

Investing Activities:
--------------------
   Principal payments, notes receivable                          --           1
   Proceeds from sale of cable system                           5,811      --
   Proceeds from sale of equipment                                  3         9
   Distributions from joint ventures                             --          31
   Proceeds from sale of securities                              --          32
   Cable systems, property and equipment                          (19)      (28)
                                                              -------   -------

Net cash provided by investing activities                       5,795        45
                                                              -------   -------

Financing Activities:
--------------------
   Contribution from General Partner                             --       2,072
   Distributions to partners                                   (5,681)   (1,291)
                                                              -------   -------

Net cash provided by (used in) financing activities            (5,681)      781
                                                              -------   -------

Decrease in cash and cash equivalents                            (432)    1,168

Cash and cash equivalents, beginning of period                  1,316     3,072
                                                              -------   -------

Cash and cash equivalents, end of period                      $   884   $ 4,240
                                                              =======   =======

         The accompany notes are an integral part of these statements.

                                       4
<PAGE>

                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  General.
         -------

         The accompanying  unaudited condensed consolidated financial statements
have been prepared by the  Partnership  in accordance  with  generally  accepted
accounting  principles,  pursuant to the rules and regulations of the Securities
and  Exchange  Commission.  In  the  opinion  of  Management,   all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have  been  included.   Although   management  believes  that  the
disclosures are adequate to make the information presented not misleading, it is
suggested that these condensed financial  statements be read in conjunction with
the financial  statements and the notes included in the Partnership's  Financial
Statement, as filed with the SEC in the latest annual report on Form 10-K.

         The Partnership  Agreement  stipulates the methods by which income will
be allocated to the General Partner and the limited  partners.  Such allocations
will be made using income or loss calculated under Generally Accepted Accounting
Principles  for book purposes,  which varies from income or loss  calculated for
tax purposes.

         The  calculation  of items of income and loss for book and tax purposes
may result in book basis  capital  accounts that vary from the tax basis capital
accounts. The requirement to restore any deficit capital balances by the General
Partner  will  be  determined  based  on the  tax  basis  capital  accounts.  At
liquidation  of the  Partnership,  the General  Partner's  remaining  book basis
capital  accounts  will be reduced to zero through the  allocation  of income or
loss.

         In January 1999,  Phoenix Concept  Cablevision of Indiana,  L.L.C. sold
all or substantially all of its assets with a carrying value of $3.8 million for
$5.8 million.  Cash, accounts receivables and certain other miscellaneous items,
currently owned by Phoenix Concept Cablevision of Indiana,  L.L.C. were excluded
from this sale.

Note 2.  Reclassification.
         ----------------

         Reclassification  - Certain  1998  amounts  have been  reclassified  to
conform to the 1999 presentation.

Note 3.  Income Taxes.
         ------------

         Federal  and state  income tax  regulations  provide  that taxes on the
income  or loss of the  Partnership  are  reportable  by the  partners  in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements.

Note 4.  Notes Receivable.
         ----------------

         Impaired Notes Receivable. At June 30, 1999, the recorded investment in
notes that are  considered  to be  impaired  was  $64,000  for which the related
allowance for losses was $21,000.  The average  recorded  investment in impaired
loans  during the six  months  ended  June 30,  1999 and 1998 was  approximately
$64,000 and $549,000, respectively.


                                       5
<PAGE>


         The activity in the allowance for losses on notes receivable during the
six months ended June 30, is as follows:
                                                        1999         1998
                                                        ----         ----
                                                      (Amounts in Thousands)

         Beginning balance                              $  21        $ 604
              Provision for losses                        -            -
              Write downs                                 -           (197)
                                                        -----        -----
         Ending balance                                 $  21        $ 407
                                                        =====        =====

Note 5.  Net Income (Loss) and Distributions Per Limited Partnership Unit.
         ----------------------------------------------------------------

         Net income and distributions per limited partnership unit were based on
the limited  partners' share of net income and  distributions,  and the weighted
average  number of units  outstanding  of 516,642 and 516,662 for the six months
ended June 30,  1999 and 1998,  respectively.  For  purposes of  allocating  net
income  (loss)  and  distributions  to  each  individual  limited  partner,  the
Partnership  allocates  net  income  (loss)  and  distributions  based upon each
respective limited partner's net capital contributions.

Note 6.  Investment in Joint Ventures.
         ----------------------------

Equipment Joint Ventures
------------------------

         The aggregate  combined  financial  information of the equipment  joint
ventures is presented as follows:

                                                  June 30,   December 31,
                                                   1999         1998
                                                   ----         ----
                                                 (Amounts in Thousands)

         Assets                                    $ -          $ -
         Liabilities                                 -            -
         Partners' Capital                           -            -


                                       Three Months Ended      Six Months Ended
                                            June 30,                June 30,
                                        1999       1998         1999       1998
                                        ----       ----         ----       ----
                                                 (Amounts in Thousands)

         Revenue                        $ -        $160         $ -        $295
         Expenses                         -          74           -         154
         Net Income                       -          86           -         141



                                       6
<PAGE>

Foreclosed Cable Systems Joint Ventures
---------------------------------------

         The aggregate  combined  financial  information of the foreclosed cable
systems joint ventures is presented as follows:

                                                 June 30,    December 31,
                                                   1999         1998
                                                   ----         ----
                                                 (Amounts in Thousands)


         Assets                                    $679         $750
         Liabilities                                144          181
         Partners' Capital                          535          569

                                       Three Months Ended       Six Months Ended
                                            June 30,                June 30,
                                        1999       1998         1999       1998
                                        ----       ----         ----       ----
                                                 (Amounts in Thousands)


         Revenue                        $ 61       $181         $132       $429
         Expenses                         82        244          164        513
         Net Loss                        (21)       (63)         (32)       (84)

Note 7.  Legal Proceedings.
         -----------------

         On October 28, 1997, a Class Action Complaint was filed against Phoenix
Leasing  Incorporated,  Phoenix  Leasing  Associates,  II and III  LP.,  Phoenix
Securities  Inc.  and  Phoenix  American   Incorporated   (the  "Companies")  in
California  Superior Court for the County of Sacramento by eleven individuals on
behalf of investors in Phoenix Leasing Cash Distribution  Funds I through V (the
"Partnerships").  The  Companies  were served with the  Complaint on December 9,
1997. The Complaint sought  declaratory and other relief  including  accounting,
receivership,  imposition of a constructive  trust and judicial  dissolution and
winding up of the Partnerships,  and damages based on fraud, breach of fiduciary
duty and  breach  of  contract  by the  Companies  as  general  partners  of the
Partnerships.

         Plaintiffs  severed  one cause of action  from the  Complaint,  a claim
related to the marketing and sale of CDF V, and  transferred  it to Marin County
Superior Court (the "Berger  Action").  Plaintiffs  then dismissed the remaining
claims in  Sacramento  Superior  Court and  refiled  them in a separate  lawsuit
making similar  allegations  (the"Ash Action").  That complaint was subsequently
transferred to Marin County as well.

         Plaintiffs  have amended the Berger Action twice.  Defendants  recently
answered the complaint.  Discovery has recently commenced.  The Companies intend
to vigorously defend the Complaint.

         Defendants  have  not  yet  responded  to  the  Ash  Complaint,   which
plaintiffs amended twice.  Discovery has not commenced.  The Companies intend to
vigorously defend the Complaint.

         During  the six  months  ended  June 30,  1999 and June 30,  1998,  the
Partnership  recorded  legal  expenses of  approximately  $60,000  and  $76,000,
respectively,  in connection with the above litigation as indemnification to the
General Partner.

                                       7
<PAGE>

Note 8.  Subsequent Event.
         ----------------

         In July  1999,  Phoenix  Pacific  North  West  Cable  Joint  Venture (a
foreclosed  cable  television  joint  venture)  sold all of its assets  owned or
leased used in its  business  and  operations,  with the  exception  of cash and
similar investments,  marketable  securities and other assets as mutually agreed
upon for $602,000.  The net carrying value of the assets as of June 30, 1999 was
$511,000.



                                       8
<PAGE>

                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY

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

Results of Operations

         Phoenix  Leasing  Cash  Distribution  Fund III,  a  California  limited
partnership and Subsidiary (the Partnership)  reported net income of $19,000 and
$1,727,000  for the three and six months  ended June 30,  1999,  as  compared to
$23,000 and $61,000 for the same period in 1998,  respectively.  The increase in
net income  during the six months ended June 30,  1999,  as compared to the same
period in 1998, is primarily  attributable  to a gain on sale of cable system of
$1,960,000.

         During the six months ended June 30, 1999, Phoenix Concept  Cablevision
of  Indiana,   L.L.C.,  a  wholly  owned  subsidiary  of  Phoenix  Leasing  Cash
Distribution  Fund  III,  sold the  assets of its cable  television  system  for
$5,811,000  in  cash  proceeds.  As a  result  of  this  sale,  the  Partnership
recognized a gain on sale of cable system of $1,960,000.  The decreases in cable
subscriber  revenue,  cable  system  operations  expense  and  depreciation  and
amortization are attributable to the sale.  Correspondingly,  management fees to
the General Partner and affiliate also increased.

         At June 30,  1999,  the  Partnership  owned  equipment,  excluding  the
Partnership's  pro rata interest in joint ventures,  with an aggregate  original
cost of $495,000 compared to $3.8 million at June 30, 1998.

         Because the Partnership is in its liquidation stage, it is not expected
that the  Partnership  will  acquire any  additional  equipment  for its leasing
activities or provide any further financing.  As a result, revenues from leasing
and financing activities are expected to continue to decline as the portfolio is
liquidated.  Phoenix  Concept  Cablevision  of Indiana,  L.L.C.,  which was sold
during  the first  quarter  in 1999,  had become  the  primary  activity  of the
Partnership.  The Partnership  reached the end of its term on December 31, 1998;
however, the remaining assets had not yet been liquidated.

Liquidity and Capital Resources

         The Partnership's  asset portfolio  continues to decline as a result of
the ongoing  liquidation of assets, and therefore,  it is expected that the cash
generated  from  operations  will  also  decline.  The  remaining  assets of the
Partnership consist primarily of an investment in Phoenix Pacific Northwest J.V.
(a foreclosed cable  television  joint venture),  a note receivable from a cable
television system operator and various leased equipment.  The General Partner is
continuing its efforts in marketing these assets for sale (see Note 8).

         The cash  distributed to limited  partners  during the six months ended
June 30, 1999 and 1998 was $5,680,000 and $1,291,000, respectively. As a result,
the cumulative cash  distributions  to the limited partners are $120,326,000 and
$111,095,000 as of June 30, 1999 and 1998, respectively. The General Partner did
not receive  cash  distributions  during the six months  ended June 30, 1999 and
1998.


                                       9
<PAGE>

Impact of the Year 2000 Issue

         ReSource/Phoenix, Inc. ("ReSource/Phoenix"), an affiliate of the parent
to the  General  Partner  does all local  computer  processing  for the  General
Partner. And as such Resource/Phoenix manages the Year 2000 project on behalf of
the General Partner.

         Resource/Phoenix  has a Year 2000 project plan in place.  The Year 2000
project team has identified  risks, and has implemented  remediation  procedures
for its Year  2000  issues.  ReSource/Phoenix  has  budgeted  for the  necessary
changes,  built  contingency  plans,  and has  progressed  along  the  scheduled
timeline.  Installation  of all  remediation  changes to critical  software  and
hardware is planned to be completed by October 31, 1999.

         Costs incurred by the Partnership  will be expensed as incurred and are
not currently anticipated to be material to the Partnership's financial position
or results of operations.

         The  Partnership's  customers  consist of lessees  and  borrowers.  The
Partnership  does  not have  exposure  to any  individual  customer  that  would
materially impact the Partnership  should the customer  experience a significant
Year 2000 problem, however, cumulative exposure to multiple individual customers
could materially impact the Partnership should multiple  customers  experience a
significant Year 2000 problem.


                                       10
<PAGE>

                   PHOENIX LEASING CASH DISTRIBUTION FUND III,
                 A CALIFORNIA LIMITED PARTNERSHIP AND SUBSIDIARY

                                  June 30, 1999

                           Part II. Other Information.
                                    -----------------


Item 1.  Legal Proceedings.
         -----------------

         On October 28, 1997, a Class Action Complaint was filed against Phoenix
Leasing  Incorporated,  Phoenix  Leasing  Associates,  II and III  LP.,  Phoenix
Securities  Inc.  and  Phoenix  American   Incorporated   (the  "Companies")  in
California  Superior Court for the County of Sacramento by eleven individuals on
behalf of investors in Phoenix Leasing Cash Distribution  Funds I through V (the
"Partnerships").  The  Companies  were served with the  Complaint on December 9,
1997. The Complaint sought  declaratory and other relief  including  accounting,
receivership,  imposition of a constructive  trust and judicial  dissolution and
winding up of the Partnerships,  and damages based on fraud, breach of fiduciary
duty and  breach  of  contract  by the  Companies  as  general  partners  of the
Partnerships.

         Plaintiffs  severed  one cause of action  from the  Complaint,  a claim
related to the marketing and sale of CDF V, and  transferred  it to Marin County
Superior Court (the "Berger  Action").  Plaintiffs  then dismissed the remaining
claims in  Sacramento  Superior  Court and  refiled  them in a separate  lawsuit
making similar  allegations  (the"Ash Action").  That complaint was subsequently
transferred to Marin County as well.

         Plaintiffs  have amended the Berger Action twice.  Defendants  recently
answered the complaint.  Discovery has recently commenced.  The Companies intend
to vigorously defend the Complaint.

         Defendants  have  not  yet  responded  to  the  Ash  Complaint,   which
plaintiffs amended twice.  Discovery has not commenced.  The Companies intend to
vigorously defend the Complaint.

Item 2.  Changes in Securities.  Inapplicable
         ---------------------

Item 3.  Defaults Upon Senior Securities.  Inapplicable
         -------------------------------

Item 4.  Submission of Matters to a Vote of Securities Holders.  Inapplicable
         -----------------------------------------------------

Item 5.  Other Information.  Inapplicable
         -----------------

Item 6.  Exhibits and Reports on 8-K:
         ---------------------------

         a)  Exhibits:
             (27) Financial Data Schedule
         b)  Reports on 8-K: None


                                       11
<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                     PHOENIX LEASING CASH DISTRIBUTION FUND III,
                                     -------------------------------------------
                                         A CALIFORNIA LIMITED PARTNERSHIP
                                         --------------------------------
                                                  (Registrant)


     Date                          Title                        Signature
     ----                          -----                        ---------



August 13, 1999          Executive Vice President,          /S/ GARY W. MARTINEZ
---------------          Chief Operating Officer            --------------------
                         and a Director of                  (Gary W. Martinez)
                         Phoenix Leasing Incorporated
                         General Partner


August 13, 1999          Chief Financial Officer,           /S/ HOWARD SOLOVEI
---------------          Treasurer and a Director of        --------------------
                         Phoenix Leasing Incorporated       (Howard Solovei)
                         General Partner


August 13, 1999          Senior Vice President,             /S/ BRYANT J. TONG
---------------          Financial Operations               --------------------
                         (Principal Accounting Officer)     (Bryant J. Tong)
                         and a Director of
                         Phoenix Leasing Incorporated
                         General Partner

                                       12