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 September 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 September
30, 1999.

Transitional small business disclosure format:

                               Yes          No  X
                                   ---         ---

                                  Page 1 of 11
<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)
                                                      September 30, December 31,
                                                          1999          1998
                                                          ----          ----
ASSETS

Cash and cash equivalents                                $ 1,187       $ 1,316

Accounts receivable (net of allowance for losses
   on accounts receivable of $0 and $57 at
   September 30, 1999 and December 31, 1998,
   respectively)                                               1           132

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

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

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

Investment in joint ventures                                --             205

Other assets                                                  37            54
                                                         -------       -------

     Total Assets                                        $ 1,268       $ 5,555
                                                         =======       =======

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                 $   224       $   593
                                                         -------       -------

     Total Liabilities                                       224           593
                                                         -------       -------

Partners' Capital (Deficit)

   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 September 30, 1999 and
     December 31, 1998, respectively                      (1,059)        2,888

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

     Total Partners' Capital (Deficit)                     1,044         4,962
                                                         -------       -------

     Total Liabilities and Partners' Capital (Deficit)   $ 1,268       $ 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  Nine Months Ended
                                             September 30,      September 30,
                                            1999      1998      1999     1998
                                            ----      ----      ----     ----
INCOME
   Gain on sale of cable system            $  --     $  --    $ 1,960   $  --
   Rental income                                 1       129       82       259
   Cable subscriber revenue                   --         410       54     1,253
   Equity in earnings from joint
     ventures, net                              40       115       27       135
   Gain on sale of securities                    7      --          7        32
   Other income                                 30        82      172       157
                                           -------   -------  -------   -------
     Total Income                               78       736    2,302     1,836
                                           -------   -------  -------   -------

EXPENSES
   Depreciation and amortization              --         129     --         368
   Cable system operations                    --         227       29       683
   Lease related operating expenses              2        11        5        25
   Management fees to General Partner
     and affiliate                            --          23      268        66
   Reimbursed administrative costs to
     General Partner                          --          39       48       125
   Legal expense                                43        57      111       167
   General and administrative expenses          13        33       94       124
                                           -------   -------  -------   -------
     Total Expenses                             58       519      555     1,558
                                           -------   -------  -------   -------

NET INCOME                                      20       217    1,747       278

Other comprehensive income:
   Unrealized gains (losses) on securities:
     Unrealized holding gains (losses)
       arising during period                   (17)     --         22        32
     Less: reclassification adjustment
           for gains included in net
           income                               (7)     --         (7)      (32)
                                           -------   -------  -------   -------
   Other comprehensive income (loss)           (24)     --         15      --
                                           -------   -------  -------   -------
COMPREHENSIVE INCOME (LOSS)                $    (4)  $   217  $ 1,762   $   278
                                           =======   =======  =======   =======


NET INCOME PER LIMITED
   PARTNERSHIP UNIT                        $   .04   $   .41  $  3.35   $   .53
                                           =======   =======  =======   =======

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

ALLOCATION OF NET INCOME:
     General Partner                       $  --     $     2  $    14   $     3
     Limited Partners                           20       215    1,733       275
                                           -------   -------  -------   -------
                                           $    20   $   217  $ 1,747   $   278
                                           =======   =======  =======   =======

        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)

                                                             Nine Months Ended
                                                                September 30,
                                                              1999        1998
                                                              ----        ----
Operating Activities:
--------------------
   Net income                                               $ 1,747     $   278
   Adjustments to reconcile net income to net
     cash provided by (used in) operating activities:
       Depreciation and amortization                           --           368
       Gain on sale of cable system                          (1,960)       --
       Gain on sale of equipment                                 (3)        (21)
       Gain on sale of securities                                (7)        (32)
       Equity in earnings from joint ventures, net              (27)       (135)
       Provision for (recovery of) losses on
         accounts receivable                                    (10)         22
       Decrease in accounts receivable                         --            68
       Decrease in accounts payable and accrued expenses       (255)       (135)
       Decrease in other assets                                  32           1
                                                            -------     -------

Net cash provided by (used in) operating activities            (483)        414
                                                            -------     -------

Investing Activities:
--------------------
   Principal payments, notes receivable                        --             2
   Proceeds from sale of cable system                         5,811        --
   Proceeds from sale of equipment                                3          21
   Proceeds from sale of securities                               7          32
   Distributions from joint ventures                            232          88
   Cable systems, property and equipment                        (19)        (47)
                                                            -------     -------

Net cash provided by investing activities                     6,034          96
                                                            -------     -------

Financing Activities:
--------------------
   Contribution from General Partner                           --         2,072
   Distributions to partners                                 (5,680)     (1,291)
                                                            -------     -------

Net cash provided by (used in) financing activities          (5,680)        781
                                                            -------     -------

Increase (decrease) in cash and cash equivalents               (129)      1,291

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

Cash and cash equivalents, end of period                    $ 1,187     $ 4,363
                                                            =======     =======

        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
$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 September 30, 1999, the Partnership has
investments in notes  receivable,  before allowance for losses of $64,000.  This
amount  includes  impaired notes  receivable,  net of specific  write downs,  of
$64,000. The Partnership has an allowance for losses for $21,000 as of September
30, 1999.  The average  recorded  investment  in impaired  loans during the nine
months ended September 30, 1999 and 1998 was approximately  $50,000 and $43,000,
respectively.


                                       5
<PAGE>

         The activity in the allowance for losses on notes receivable during the
nine months ended September 30, 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 nine months
ended September 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:

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

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


                                    Three Months Ended  Nine Months Ended
                                       September 30,      September 30,
                                      1999      1998     1999      1998
                                      ----      ----     ----      ----
                                            (Amounts in Thousands)

          Revenue                     $ --     $ 457     $ --     $ 752
          Expenses                      --       686       --       840
          Net Loss                      --      (229)      --       (88)



                                       6
<PAGE>

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

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

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

          Assets                              $ --           $750
          Liabilities                           --            181
          Partners' Capital                     --            569

                                    Three Months Ended  Nine Months Ended
                                       September 30,      September 30,
                                      1999      1998     1999      1998
                                      ----      ----     ----      ----
                                            (Amounts in Thousands)

          Revenue                    $ 266     $ 257     $ 397    $ 686
          Expenses                      19       234       182      747
          Net Income (Loss)            247        23       215      (61)

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 filed a demurrer to the Ash Complaint, which plaintiffs
amended  three times.  Discovery  has not  commenced.  The  Companies  intend to
vigorously defend the Complaint.

         During the nine months ended September 30, 1999 and September 30, 1998,
the Partnership recorded legal expenses of approximately  $103,000 and $110,000,
respectively,  in connection with the above litigation as indemnification to the
General Partner.


                                       7
<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 $20,000 and
$1,747,000  for the three and nine months ended  September 30, 1999, as compared
to $217,000 and $278,000 for the same period in 1998, respectively. The increase
in net income  during the nine months ended  September  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 nine  months  ended  September  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 September 30, 1999, the Partnership  owned equipment,  excluding the
Partnership's  pro rata interest in joint ventures,  with an aggregate  original
cost of $3,000 compared to $1.4 million at September 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 a note  receivable  from a cable  television
system  operator and a lease.  The General  Partner is continuing its efforts in
marketing these assets for sale.

         Distributions  from  joint  ventures  increased  $144,000  for the nine
months ended September  30,1999,  as compared to the same period in the previous
year.  This  increase  in  distributions  is due to the sale of one of the cable
joint ventures that the Partnership had a equity interest in.

         The cash  distributed to limited  partners during the nine months ended
September 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 September 30, 1999 and 1998,  respectively.
The General  Partner did not receive cash  distributions  during the nine months
ended September 30, 1999 and 1998.


                                       8
<PAGE>

Impact of the Year 2000 Issue

         ReSourcePhoenix.com ("ReSourcePhoenix"),  an affiliate of the parent to
the General Partner does all local computer  processing for the General Partner.
And as such  ResourcePhoenix  manages  the Year  2000  project  on behalf of the
General Partner.

         ResourcePhoenix  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.  ReSourcePhoenix  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 was completed on November 5, 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 knowledge of any 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.


                                       9
<PAGE>

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

                               September 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 filed a demurrer to the Ash Complaint, which plaintiffs
amended  three times.  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



                                       10
<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
     ----                          -----                        ---------



November 10, 1999        Executive Vice President,          /S/ GARY W. MARTINEZ
-----------------        Chief Operating Officer            --------------------
                         and a Director of                  (Gary W. Martinez)
                         Phoenix Leasing Incorporated
                         General Partner


November 10, 1999        Chief Financial Officer,           /S/ HOWARD SOLOVEI
-----------------        Treasurer and a Director of        --------------------
                         Phoenix Leasing Incorporated       (Howard Solovei)
                         General Partner


November 10, 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

                                       11