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 March 31, 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 March 31,
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)
                                                        March 31,   December 31,
                                                          1999         1998
                                                          ----         ----
ASSETS

Cash and cash equivalents                                $6,843       $1,316

Accounts receivable (net of allowance for losses on
   accounts receivable of $10 and $57 at March 31,
   1999 and December 31, 1998, respectively)                  6          132

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

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

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

Investment in joint ventures                                199          205

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

     Total Assets                                        $7,145       $5,555
                                                         ======       ======

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

   Accounts payable and accrued expenses                 $  460       $  593
                                                         ------       ------

     Total Liabilities                                      460          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 March 31, 1999
     and December 31, 1998, respectively                  4,582        2,888

   Accumulated other comprehensive income                    31           16
                                                         ------       ------

     Total Partners' Capital                              6,685        4,962
                                                         ------       ------

     Total Liabilities and Partners' Capital             $7,145       $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 SUBSIDIARY
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
               (Amounts in Thousands Except for Per Unit Amounts)
                                   (Unaudited)

                                                              Three Months Ended
                                                                   March 31,
                                                               1999        1998
                                                               ----        ----
INCOME
Gain on sale of cable system                                 $ 1,975     $  --
Cable subscriber revenue                                          55         420
Rental income                                                      9          70
Equity in earnings (losses) from joint ventures, net              (6)         11
Other income                                                      75          31
                                                             -------     -------

   Total Income                                                2,108         532
                                                             -------     -------

EXPENSES
Depreciation and amortization                                   --           119
Cable system operations                                           23         235
Lease related operating expenses                                   1           9
Management fees to General Partner and affiliate                 266          22
Reimbursed administrative costs to General Partner                31          31
Legal expense                                                     45          41
General and administrative expenses                               34          37
                                                             -------     -------

   Total Expenses                                                400         494
                                                             -------     -------

NET INCOME                                                     1,708          38

Other comprehensive income:
   Unrealized gains on securities:
     Unrealized holding gains arising during period               15        --
     Less:  reclassification adjustment for gains
            included in net income                              --          --
                                                             -------     -------
Other comprehensive income                                        15        --
                                                             -------     -------

COMPREHENSIVE INCOME                                         $ 1,723     $    38
                                                             =======     =======


NET INCOME PER LIMITED PARTNERSHIP UNIT                      $  3.28     $   .07
                                                             =======     =======

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

ALLOCATION OF NET INCOME:
   General Partner                                           $    14     $  --
   Limited Partners                                            1,694          38
                                                             -------     -------

                                                             $ 1,708     $    38
                                                             =======     =======

        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)

                                                              Three Months Ended
                                                                   March 31,
                                                                1999      1998
                                                                ----      ----
Operating Activities:
--------------------
   Net income                                                 $ 1,708   $    38
   Adjustments to reconcile net income to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                             --         119
       Gain on sale of cable system                            (1,975)     --
       Gain on sale of equipment                                   (3)       (4)
       Equity in earnings (losses) from joint ventures, net         6       (11)
       Provision for losses on accounts receivable               --           4
       Decrease in accounts receivable                             24        52
       Increase (decrease) in accounts payable and accrued
         expenses                                                 (57)       12
       Decrease in other assets                                    14         9
                                                              -------   -------

Net cash provided by (used in) operating activities              (283)      219
                                                              -------   -------

Investing Activities:
--------------------
                                                                       
   Principal payments, notes receivable                          --           1
   Proceeds from sale of cable system                           5,826      --
   Proceeds from sale of equipment                                  3         4
   Distributions from joint ventures                             --           7
   Cable systems, property and equipment                          (19)      (17)
                                                              -------   -------

Net cash provided by (used in) investing activities             5,810        (5)
                                                              -------   -------

Financing Activities:
--------------------
                                                                       
   Distributions to partners                                     --      (1,291)
                                                              -------   -------

Net cash used in financing activities                            --      (1,291)
                                                              -------   -------

Increase (decrease) in cash and cash equivalents                5,527    (1,077)

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

Cash and cash equivalents, end of period                      $ 6,843   $ 1,995
                                                              =======   =======

        The accompanying 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
$6 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 March 31, 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 three  months  ended March 31, 1999 and 1998 was  approximately
$64,000 and $648,000, respectively.

                                       5
<PAGE>


         The activity in the allowance for losses on notes receivable during the
three months ended March 31, is as follows:
                                                     1999        1998
                                                     ----        ----
                                                  (Amounts in Thousands)

          Beginning balance                          $  21      $ 604
               Provision for losses                   --         --
               Write downs                            --         (583)
                                                     -----      -----
          Ending balance                             $  21      $  21
                                                     =====      =====

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 three months
ended March 31, 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:

                                               March 31,         December 31,
                                                 1999                1998
                                                 ----                ----
                                                  (Amounts in Thousands)

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

                                                   Three Months Ended
                                                         March 31,
                                                  1999               1998
                                                  ----               ----
                                                  (Amounts in Thousands)

         Revenue                                 $ -                 $135
         Expenses                                  -                   80
         Net Income                                -                   55



                                       6
<PAGE>

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

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

                                               March 31,        December 31,
                                                 1999               1998
                                                 ----               ----
                                                  (Amounts in Thousands)

         Assets                                  $653               $750
         Liabilities                               98                181
         Partners' Capital                        555                569

                                                   Three Months Ended
                                                        March 31,
                                                 1999                1998
                                                 ----                ----
                                                  (Amounts in Thousands)

         Revenue                                 $ 71                $248
         Expenses                                  82                 269
         Net Loss                                 (11)                (21)

         Phoenix  Pacific North West Cable Joint Venture has accepted and agreed
to the terms  stated on a Letter  of Intent  dated  April 5, 1999 to sell all or
substantially  all of its assets on or before the closing  date of July 1, 1999.
Cash,  accounts  receivables and certain other  miscellaneous  items,  currently
owned by Phoenix  Pacific  North West Cable Joint Venture are excluded from this
sale. This Letter of Intent is subject to a definitive asset purchase  agreement
which is currently being negotiated with the potential buyer.

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 "Marin  Action").  Plaintiffs  then dismissed the remaining
claims in  Sacramento  Superior  Court and  refiled  them in a separate  lawsuit
making similar allegations (the"Sacramento Action").

         Plaintiffs have amended the Marin Action twice. Defendants have not yet
answered the complaint and may file a demurrer to dismiss the claims.  Discovery
has not commenced. The Companies intend to vigorously defend the Complaint.

         In February  1999,  plaintiffs  requested a transfer of the  Sacramento
Action  to Marin  County.  The  Court  granted  that  request,  and the case was

                                       7
<PAGE>

transferred in March 1999.  Defendants  have not yet responded to the Complaint.
Discovery  has not  commenced.  The Companies  intend to  vigorously  defend the
Complaint.

         During the three months ended March 31, 1999, the Partnership  recorded
legal expenses of approximately  $46,000 in connection with the above litigation
as indemnification to the General Partner.

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

     On May 28,  1999,  cash  distributions  of  $5,680,000  will be made to the
Limited Partners.

                                       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 $1,708,000
and $38,000 for the three  months  ended March 31, 1999 and 1998,  respectively.
The increase in net income  during the three  months  ended March 31,  1999,  as
compared to the same period in 1997, is primarily attributable to a gain on sale
of cable system of $1,975,000.

         During  the  three  months  ended  March  31,  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
$5,826,000  in  cash  proceeds.  As a  result  of  this  sale,  the  Partnership
recognized a gain on sale of cable system of $1,975,000.  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.

         Partially offsetting the gain on sale of cable system is the decline in
rental income of $61,000 for the three months ended March 31, 1999,  compared to
the same  period  in 1998.  The  decrease  in  rental  income  is a result  of a
reduction  in the amount of  equipment  owned by the  Partnership.  At March 31,
1999,  the  Partnership  owned  equipment  with an  aggregate  original  cost of
$605,000 compared to $4.8 million at March 31, 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. The Subsidiary's cable operations, which was sold during the current
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.

         The cash  distributed to limited partners during the three months ended
March 31, 1999 and 1998 was $0 and $1,291,000,  respectively.  As a result,  the
cumulative  cash  distributions  to the limited  partners are  $114,646,000  and
$111,096,000  as of March 31, 1999 and 1998,  respectively.  The General Partner
did not receive cash distributions  during the three months ended March 31, 1999
and 1998.

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.


                                       9
<PAGE>

         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 software and hardware is
planned to be completed by September 15, 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

                                 March 31, 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 "Marin  Action").  Plaintiffs  then dismissed the remaining
claims in  Sacramento  Superior  Court and  refiled  them in a separate  lawsuit
making similar allegations (the"Sacramento Action").

         Plaintiffs have amended the Marin Action twice. Defendants have not yet
answered the complaint and may file a demurrer to dismiss the claims.  Discovery
has not commenced. The Companies intend to vigorously defend the Complaint.

         In February  1999,  plaintiffs  requested a transfer of the  Sacramento
Action  to Marin  County.  The  Court  granted  that  request,  and the case was
transferred in March 1999.  Defendants  have not yet responded to the Complaint.
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
     ----                          -----                        ---------



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


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


May 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