UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------
                                   FORM 10-Q/A




[X]      QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE
         SECURITIES  EXCHANGE ACT OF 1934
         FOR THE FISCAL  QUARTER ENDED MARCH 31, 1999

[  ]     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 1-10813
                             -----------------------

                          PLM EQUIPMENT GROWTH FUND III
             (Exact name of registrant as specified in its charter)


          CALIFORNIA                                            68-0146197
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

ONE MARKET, STEUART STREET TOWER
  SUITE 800, SAN FRANCISCO, CA                                   94105-1301
      (Address of principal                                      (Zip code)
       executive offices)


       Registrant's telephone number, including area code: (415) 974-1399
                             -----------------------


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
requirements for the past 90 days. Yes X No ______




<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                                 BALANCE SHEETS
                 (in thousands of dollars, except unit amounts)


<TABLE>
<CAPTION>

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

         <S>                                                                                  <C>                  <C>
         Equipment held for operating lease, at cost                                          $     109,400        $   109,680
         Less accumulated depreciation                                                              (83,056)           (81,298)
                                                                                              ------------------------------------
           Net equipment                                                                             26,344             28,382

         Cash and cash equivalents                                                                    2,701              3,429
         Accounts receivable, net of allowance for doubtful
             accounts of $1,460 in 1999 and $1,469 in 1998                                            2,047              1,328
         Investments in unconsolidated special-purpose entities                                          92              2,160
         Deferred charges, net of accumulated
             amortization of $435 in 1999 and $403 in 1998                                              109                141
         Prepaid expenses and other assets                                                               73                 72
                                                                                              ------------------------------------

             Total assets                                                                     $      31,366        $    35,512
                                                                                              ====================================

         LIABILITIES AND PARTNERS' CAPITAL

         Liabilities:
         Accounts payable and accrued expenses                                                $         947        $     1,369
         Due to affiliates                                                                              220                168
         Lessee deposits and reserves for repairs                                                     1,343              1,142
         Note payable                                                                                14,956             18,540
                                                                                              ------------------------------------
           Total liabilities                                                                         17,466             21,219
                                                                                              ------------------------------------

         Minority interests                                                                           2,196              2,211

         Partners' capital:
         Limited partners (9,871,073 depositary units as
             of March 31, 1999 and December 31, 1998)                                                11,704             12,082
         General Partner                                                                                 --                 --
                                                                                              ------------------------------------
           Total partners' capital                                                                   11,704             12,082
                                                                                              ------------------------------------

             Total liabilities and partners' capital                                          $      31,366        $    35,512
                                                                                              ====================================


</TABLE>








                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                              STATEMENTS OF INCOME
         (in thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>


                                                                                                     For the Three Months
                                                                                                        Ended March 31,
                                                                                                      1999            1998
                                                                                                   ---------------------------
REVENUES

<S>                                                                                                <C>            <C>
Lease revenue                                                                                      $   3,904      $    4,767
Interest and other income                                                                                 68              59
Net gain (loss) on disposition of equipment                                                               13             (10)
                                                                                                   ---------------------------
  Total revenues                                                                                       3,985           4,816
                                                                                                   ---------------------------

EXPENSES

Depreciation and amortization                                                                          1,997           2,652
Repairs and maintenance                                                                                  482             646
Equipment operating expenses                                                                             196             237
Insurance expense                                                                                         80             113
Management fees to affiliate                                                                             218             266
Interest expense                                                                                         316             529
General and administrative expenses to affiliates                                                        133             164
Other general and administrative expenses                                                                366             138
Provision for (recovery of) bad debts                                                                     (9)            127
Minority interests                                                                                       (20)            (63)
                                                                                                   ---------------------------
  Total expenses                                                                                       3,759           4,809
                                                                                                   ---------------------------

Equity in net income (loss) of unconsolidated
    special-purpose entities                                                                           1,474              73
                                                                                                   ---------------------------

    Net income                                                                                     $   1,700      $       80
                                                                                                   ===========================

PARTNERS' SHARE OF NET INCOME (LOSS)

Limited partners                                                                                   $   1,596      $      (50)
General Partner                                                                                          104             130
                                                                                                   ---------------------------

    Total                                                                                          $   1,700      $       80
                                                                                                   ===========================

Net income (loss) per weighted-average depositary unit                                             $    0.16      $    (0.01)
                                                                                                   ===========================

Cash distribution                                                                                  $   2,078      $    2,597
                                                                                                   ===========================
Cash distribution per weighted-average
    depositary unit                                                                                $    0.20      $     0.25
                                                                                                   ===========================
</TABLE>







                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
             FOR THE PERIOD FROM DECEMBER 31, 1997 TO MARCH 31, 1999
                            (in thousands of dollars)
<TABLE>
<CAPTION>



                                                         Limited          General
                                                         Partners         Partner            Total
                                                       ------------------------------------------------

  <S>                                                  <C>                <C>             <C>
    Partners' capital as of December 31, 1997          $   19,559         $    --         $   19,559

  Net income                                                2,397             520              2,917

  Cash distribution                                        (9,874)           (520)           (10,394)
                                                       -------------------------------------------------

    Partners' capital as of December 31, 1998              12,082              --             12,082

  Net income                                                1,596             104              1,700

  Cash distribution                                        (1,974)           (104)            (2,078)
                                                       -------------------------------------------------

    Partners' capital as of March 31, 1999             $   11,704         $    --         $   11,704
                                                       =================================================

</TABLE>
































                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
<TABLE>
<CAPTION>
                                                                                                 For the Three Months
                                                                                                       Ended March 31,
                                                                                                     1999            1998
                                                                                                 -----------------------------
  OPERATING ACTIVITIES

  <S>                                                                                             <C>             <C>
  Net income                                                                                      $   1,700       $       80
  Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                     1,997           2,652
    Net (gain) loss on disposition of equipment                                                         (13)             10
    Equity in net (income) loss from unconsolidated special-purpose entities                         (1,474)            (73)
    Changes in operating assets and liabilities:
      Accounts receivable, net                                                                         (719)            581
      Prepaid expenses and other assets                                                                  (1)             (7)
      Accounts payable and accrued expenses                                                            (422)           (619)
      Due to affiliates                                                                                  17            (291)
      Lessee deposits and reserves for repairs                                                          201             191
      Minority interests                                                                                (15)            (80)
  ---------------------------------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                                                     1,271           2,444
                                                                                                  ---------------------------

  INVESTING ACTIVITIES

  Payments for capitalized improvements                                                                  (2)            (26)
  (Additional investments in) distributions from unconsolidated special-purpose                          (5)          1,708
      entities
  Distributions from liquidation of unconsolidated special-purpose entities                           3,547              --
  Proceeds from disposition of equipment                                                                 88             254
  Due to affiliate                                                                                       35              --
  ---------------------------------------------------------------------------------------------------------------------------
        Net cash provided by investing activities                                                     3.663           1,936
                                                                                                  ---------------------------

  FINANCING ACTIVITIES

  Principal payments on note payable                                                                 (3,584)             --
  Payment due to affiliate                                                                               --          (1,792)
  Cash distributions paid to limited partners                                                        (1,974)         (2,467)
  Cash distributions paid to General Partner                                                           (104)           (130)
                                                                                                  ---------------------------
        Net cash used in financing activities                                                        (5,662)         (4,389)
                                                                                                  ---------------------------

  Net decrease in cash and cash equivalents                                                            (728)             (9)
  Cash and cash equivalents at beginning of period                                                    3,429           4,239
                                                                                                  ---------------------------
  Cash and cash equivalents at end of period                                                      $   2,701      $    4,230
                                                                                                  ===========================

  Supplemental information

  Interest paid                                                                                   $     316      $      529
                                                                                                  ==========================


</TABLE>



                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1999

1.   OPINION OF MANAGEMENT

     In the opinion of the  management of PLM Financial  Services,  Inc. (FSI or
     the General  Partner),  the  accompanying  unaudited  financial  statements
     contain all adjustments necessary, consisting primarily of normal recurring
     accruals,  to present fairly the financial position of PLM Equipment Growth
     Fund III (the  Partnership) as of March 31, 1999 and December 31, 1998, the
     statements  of income for the three  months  ended March 31, 1999 and 1998,
     the statements of changes in partners' capital for the period from December
     31, 1997 to March 31, 1999,  and the statements of cash flows for the three
     months  ended  March  31,  1999  and  1998.  Certain  information  and note
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed  or  omitted  from the  accompanying  financial  statements.  For
     further  information,  reference should be made to the financial statements
     and notes  thereto  included  in the  Partnership's  Annual  Report on Form
     10-K/A for the year ended  December 31, 1998, on file at the Securities and
     Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

     In  accordance  with the limited  partnership  agreement,  the  Partnership
     entered  its  passive  phase  on  January  1,  1997  and as a  result,  the
     Partnership is not permitted to reinvest in equipment.  On January 1, 2000,
     the Partnership  will enter the  liquidation  phase and commence an orderly
     liquidation of the Partnership  assets.  The Partnership  will terminate on
     December 31, 2000, unless terminated  earlier upon sale of all equipment or
     by certain other events.

     Beginning in the Partnership's  eighth year of operations,  which commenced
     on January 1, 1997, the General Partner stopped reinvesting excess cash, if
     any,  which,  less  reasonable  reserves,  will be distributed to partners.
     During the liquidation phase, the Partnership's  assets will continue to be
     recorded at the lower of carrying amount or fair value less cost to sell.

3.   CASH DISTRIBUTIONS

     Cash distributions are recorded when paid and may include amounts in excess
     of net income.  Operating  cash  distributions  were $2.1  million and $2.6
     million for the three months  ended March 31, 1999 and 1998,  respectively.
     Cash  distributions  to  limited  partners  in  excess  of net  income  are
     considered to represent a return of capital.  Cash distributions to limited
     partners of $0.4  million and $2.5 million for the three months ended March
     31, 1999 and 1998, respectively, were deemed to be a return of capital.

     Cash  distributions  related to the results from the first quarter of 1999,
     of $2.1 million, will be paid during the second quarter of 1999.

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

     The balance due to  affiliates  as of March 31, 1999  included $0.2 million
     due to FSI and its  affiliate  for  management  fees,  and  $35,000  due to
     affiliated unconsolidated special-purpose entities (USPEs). The balance due
     to  affiliates as of December 31, 1998 includes $0.2 million due to FSI and
     its affiliates for management fees.

     The Partnership's proportional share of USPE-affiliated management fees, of
     $1,800 and $3,000, were payable as of March 31, 1999 and December 31, 1998,
     respectively.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

     The Partnership's proportional share of the affiliated expenses incurred by
     the unconsolidated  special-purpose entities during 1999 and 1998 is listed
     in the following table (in thousands of dollars):

                                               For the Three Months
                                                 Ended March 31,
                                             1999              1998
                                          ---------------------------------

       Data processing and administrative
         expenses                            $    2        $     10
       Management fees                           --              14

5.   Equipment

     The  components  of  owned  equipment  were as  follows  (in  thousands  of
     dollars):
<TABLE>
<CAPTION>

                                                                   March 31,          December 31,
                                                                    1999                  1998
                                                               --------------------------------------



  <S>                                                           <C>                    <C>
  Aircraft                                                      $     52,028           $   52,028
  Railcars                                                            33,953               33,999
  Marine vessel                                                       12,790               12,790
  Marine containers                                                    5,459                5,606
  Trailers                                                             5,170                5,257
                                                                ------------------------------------
                                                                     109,400              109,680
  Less accumulated depreciation                                      (83,056)             (81,298)
                                                                -------------------------------------
      Net equipment                                             $     26,344           $   28,382
                                                                =====================================
</TABLE>


     As of March 31, 1999, all equipment in the Partnership portfolio was either
     on  lease  or  operating  in  PLM-affiliated   short-term   trailer  rental
     facilities,  except for 38 railcars, 21 marine containers, and an aircraft.
     As of December 31, 1998,  all  equipment in the  Partnership  portfolio was
     either  on  lease  or  operating  in   PLM-affiliated   short-term   rental
     facilities,  except for 69 railcars, 25 marine containers, and an aircraft.
     The net book value of the  equipment  off lease was $1.9  million  and $2.4
     million as of March 31, 1999 and December 31, 1998, respectively.

     Capital  improvements to the Partnership's  equipment of $2,000 and $26,000
     were made during the three  months ended March 31, 1999 and March 31, 1998,
     respectively.

     During the three  months  ended March 31,  1999,  the  Partnership  sold or
     disposed of marine containers,  trailers,  and railcars,  with an aggregate
     net book value of $0.1 million, for aggregate proceeds of $0.1 million.

     During the three  months  ended March 31,  1998,  the  Partnership  sold or
     disposed of marine containers,  trailers,  and a railcar, with an aggregate
     net book value of $0.3 million, for aggregate proceeds of $0.3 million.


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

6.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES

     The net investment in USPEs included the following  jointly-owned equipment
     (and related assets and liabilities) (in thousands of dollars):
<TABLE>
<CAPTION>


                                                                                  March 31,           December 31,
                                                                                   1999               1998
                                                                              ---------------------------------

<S>                                                                            <C>                 <C>
25% interest in a trust that owned four commercial aircraft                    $       92          $      106
17% interest in two trusts that owned three commercial aircraft, two
        aircraft engines, and a portfolio of rotable components                        --               2,054
                                                                               ---------------------------------

    Net investments                                                            $       92          $    2,160
                                                                               =================================
</TABLE>


     The  Partnership  sold its 17%  interest in the two trusts that owned three
     commercial  aircraft,  two  aircraft  engines,  and a portfolio  of rotable
     components  during the first  quarter of 1999 for  proceeds of $3.5 million
     and had a gain of $1.6 million.

7.   Operating Segments

     The Partnership  operates or operated primarily in six different  segments:
     aircraft  leasing,  railcar  leasing,  marine  container  leasing,  trailer
     leasing,  mobile offshore  drilling unit (MODU) leasing,  and marine vessel
     leasing.  Each equipment leasing segment engages in short-term and mid-term
     operating leases to a variety of customers.

     The  following  tables  present a summary  of the  operating  segments  (in
     thousands of dollars):
<TABLE>
<CAPTION>


                                                                  Marine        Marine
                                           Aircraft  Railcar      Vessel        Container Trailer    All
     For the quarter Ended March 31, 1999  Leasing   Leasing      Leasing       Leasing   Leasing    Other<F1>1  Total
     ------------------------------------  -------   -------      -------       -------   -------    ----        -----

     REVENUES
       <S>                                 <C>       <C>        <C>           <C>       <C>        <C>       <C>
       Lease revenue                       $  1,509  $  1,758   $       459   $     37  $    141   $     --  $  3,904
       Interest income and other                  5        --            --         --        --         63        68
       Net gain (loss) on disposition of
         Equipment                                1        17            --          2        (7)        --        13
                                           ---------------------------------------------------------------------------
         Total revenues                       1,515     1,775           459         39       134         63     3,985

     COSTS AND EXPENSES
       Operations support                        94       350           258         --        46         10       758
       Depreciation and amortization          1,203       443           214         33        89         15     1,997
       Interest expense                          --        --            --         --        --        316       316
       Management fees                           62       121            23          2        10         --       218
       General and administrative expenses      192        66            15          2        25        199       499
       Provision for (recovery of) bad          (21)       46            --         --       (34)        --        (9)
     debts
       Minority interests                        --        --           (20)        --        --         --       (29)
                                           ---------------------------------------------------------------------------
         Total costs and expenses             1,530     1,026           490         37       136        540     3,759
                                           ---------------------------------------------------------------------------
     Equity in net income (loss) of USPEs     1,474        --            --         --        --         --     1,474
                                           ---------------------------------------------------------------------------
     Net income (loss)                     $  1,459  $    749   $       (31)  $      2  $     (2)  $   (477) $  1,700
                                           ===========================================================================

     Total assets as of March 31, 1999     $ 12,484  $  7,783   $     5,232   $    555  $  2,143   $  3,169  $ 31,366
                                           ===========================================================================






<FN>
--------------------------
<F1>
1    Includes  revenues and costs not identifiable to a particular  segment such
     as interest expense, certain amortization expenses, certain interest income
     and other, operations support and general and administrative expenses.
</FN>
</TABLE>


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

7.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                                 Marine        Marine
                                           Aircraft  Railcar     Vessel       Container Trailer      MODU    All
     For the quarter Ended March 31, 1998  Leasing   Leasing     Leasing      Leasing   Leasing    Leasing   Other<F1>1   Total
     ------------------------------------  -------   -------     -------      -------   -------    -------   ------       -----

     REVENUES
       <S>                                 <C>       <C>        <C>         <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  1,612  $  1,828   $     485   $    118   $   319   $    405   $     --  $  4,767
       Interest income and other                  3        --          --         --        --         --         56        59
       Net gain (loss) on disposition of
         Equipment                              (14)       16          --          1       (13)        --         --       (10)
                                           ------------------------------------------------------------------------------------
         Total revenues                       1,601     1,844         485        119       306        405         56     4,816

     Costs and Expenses
       Operations support                        55       516         344          2        54         10         15       996
       Depreciation and amortization          1,361       467         257         96       141        315         15     2,652
       Interest expense                          --        --          --         --        --         --        529       529
       Management fees                           69       127          24          6        20         20         --       266
       General and administrative expenses       11        66          45          2        52         --        126       302
       Provision for (recovery of) bad          125         3          --        (11)       (1)        --         11       127
     debts
       Minority interest                         --        --         (63)        --        --         --         --       (63)
                                           ------------------------------------------------------------------------------------
         Total costs and expenses             1,621     1,179         607         95       266        345        696     4,809
                                           ------------------------------------------------------------------------------------
     Equity in net income (loss) of USPEs        73        --          --         --        --         --         --        73
                                           ------------------------------------------------------------------------------------
     Net income (loss)                     $     53  $    665   $    (122)  $     24   $    40   $     60   $   (640) $     80
                                           ====================================================================================

     Total assets as of March 31, 1998     $ 19,372  $  9,589   $   6,106   $  1,356     3,247   $  7,107   $  4,510  $ 51,287
                                           ====================================================================================


<FN>
--------------------------
<F1>
1    Includes  revenues and costs not identifiable to a particular  segment such
     as interest expense, certain amortization expenses, certain interest income
     and other, operations support and general and administrative expenses.
</FN>
</TABLE>


8.   NOTE PAYABLE

     The Partnership had a note  outstanding with a face amount of $15.0 million
     as of March 31, 1999.

     During  the first  three  months of 1999,  the  Partnership  paid down $3.6
     million of the outstanding note balance from the proceeds of asset sales.

9.   NET INCOME PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

     Net income per  weighted-average  Partnership unit was computed by dividing
     net income attributable to limited partners by the weighted-average  number
     of   Partnership   units  deemed   outstanding   during  the  period.   The
     weighted-average  number of Partnership units deemed outstanding during the
     three months ended March 31, 1999 and 1998 was 9,871,073.

10.  CONTINGENCIES

     The  Partnership,  together with  affiliates,  has initiated  litigation in
     various official forums in India against a defaulting Indian airline lessee
     to repossess Partnership property and to recover damages for failure to pay
     rent and failure to maintain  such  property in  accordance  with  relevant
     lease  contracts.  The  Partnership  has  repossessed  all of its  property
     previously leased to such airline,  and the airline has ceased  operations.
     In response to the  Partnership's  collection  efforts,  the airline  filed
     counter-claims  against  the  Partnership  in excess  of the  Partnership's
     claims against the airline. The General Partner believes that the airline's
     counterclaims  are completely  without merit,  and the General Partner will
     vigorously defend against such counterclaims.

     The  Partnership  is involved as plaintiff  or  defendant in various  other
     legal actions  incident to its business.  Management  does not believe that
     any of these  actions  will be material to the  financial  condition of the
     Partnership.
<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

11.  RESTATEMENT

     The financial statements have been restated to reflect the consolidation of
     the  Partnership's  majority  interests  in greater  than 50% owned  USPE's
     previously  reported  under the equity method of  accounting  for the three
     months ended March 31, 1999 and 1998.

     As a result of the  consolidation,  total assets,  total  liabilities,  and
     minority  interests  changed as of March 31, 1999 and  December 31, 1998 as
     follows:

                                      1999                          1998
                          As reported       Amended       As reported   Amended
                          ---------------------------   ------------------------
     Total assets          $28,931         $31,366       $33,068        $35,512
     Total liabilities      17,227          17,466        20,986         21,219
     Minority interests         --           2,196            --          2,211

     Additionally,  as a result  of the  consolidation,  total  revenues,  total
     expenses,  and equity in net income of USPEs  changed for the three  months
     ended March 31, 1999 and 1998 as follows:



                                     1999                         1998

                            As reported    Amended      As reported     Amended
                           ---------------------------  ------------------------

     Total revenues        $  3,526        $  3,985      $  4,331       $  4,816
     Total expenses           3,273           3,759         4,246          4,809
     Equity in net
     income (loss) of         1,447           1,474            (5)            73
     USPEs
     Net income            $  1,700        $  1,700        $   80         $   80

     The consolidation of the Partnership's majority interests in USPE's did not
     change  partners'  capital  or net  income  (loss)  as of and for the three
     months ended March 31, 1999 and 1998.















                      (this space intentionally left blank)



<PAGE>



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

(I)  RESULTS OF OPERATIONS

COMPARISON  OF PLM  EQUIPMENT  GROWTH FUND III'S (THE  PARTNERSHIP'S)  OPERATING
RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating and asset-specific  insurance  expenses) on owned equipment
decreased during the three months ended March 31, 1999 when compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income,  and certain  expenses such as depreciation and amortization and general
and  administrative  expenses relating to the operating  segments (see Note 7 to
the financial  statements),  are not included in the owned  equipment  operation
discussion  because  these  expenses  are  indirect  in nature,  not a result of
operations  but the result of owning a portfolio  of  equipment.  The  following
table presents  lease revenues less direct  expenses by segment (in thousands of
dollars):

                                          For the Three Months
                                            Ended March 31,
                                          1999                 1998
                                ------------------------------------

  Aircraft                      $         1,415    $         1,557
  Railcars                                1,408              1,312
  Marine vessel                             201                141
  Trailers                                   95                265
  Marine containers                          37                116
  Mobile offshore drilling unit              --                395

Aircraft: Aircraft lease revenues and direct expenses were $1.5 million and $0.1
million,  respectively,  for the quarter ended March 31, 1999,  compared to $1.6
million and $0.1 million,  respectively,  during the same period of 1998.  Lease
revenues  decreased  $0.4  million  during the three months ended March 31, 1999
when  compared to the same  period in 1998 due to one  aircraft  being  offlease
since the third  quarter of 1998.  The decrease in lease  revenue was  partially
offset by the  incremental  lease  revenue of $0.3 million from an aircraft that
was transferred into the  Partnership's  owned equipment  portfolio from a trust
during the second quarter of 1998.

Railcars: Railcars lease revenues and direct expenses were $1.8 million and $0.4
million,  respectively,  for the quarter ended March 31, 1999,  compared to $1.8
million and $0.5  million,  respectively,  during the same  period of 1998.  The
decrease in direct expenses  resulted from running  repairs  required on certain
railcars in the fleet  during the first  quarter of 1998,  which were not needed
during the same period of 1999.

Marine  vessel:  Marine  vessel  lease  revenues and direct  expenses  were $0.5
million and $0.3  million,  respectively,  for the quarter ended March 31, 1999,
compared to $0.5 million and $0.3 million,  respectively, for the same period of
1998.

Trailers:  Trailer  lease  revenues  and direct  expenses  were $0.1 million and
$46,000,  respectively,  for the quarter ended March 31, 1999,  compared to $0.3
million and $0.1  million,  respectively,  during the same  period of 1998.  The
number of trailers owned by the  Partnership has been declining due to sales and
dispositions.  The  result of this  declining  fleet is a  decrease  in  trailer
contribution.

Marine  containers:  Marine  container  lease revenues and direct  expenses were
$37,000 and $1,000, respectively, for the quarter ended March 31, 1999, compared
to $0.1 million and $2,000,  respectively,  during the same period of 1998.  The
number of marine  containers  owned by the Partnership has been declining due to
sales and  dispositions.  The result of this  declining  fleet and a decrease in
utilization has been a decrease in marine container contribution.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct expenses were zero for the quarter ended March 31, 1999, compared to $0.4
million and $10,000,  respectively,  for the quarter  ended March 31, 1998.  The
Partnership sold its mobile offshore drilling unit in June of 1998.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $3.0  million for the quarter  ended March 31, 1999
decreased from $3.8 million for the same period of 1998.  Significant  variances
are explained as follows:

     (i) A decrease of $0.7 million in depreciation  and  amortization  expenses
         from  1998  levels   reflects  the  sale  or   disposition  of  certain
         Partnership  assets during 1999 and 1998 and the  Partnership's  use of
         the  double-declining  balance method of depreciation  which results in
         greater depreciation in the first years an asset is owned.

     (ii)A decrease  of $0.2  million  in  interest  expense  was due to a lower
         average debt outstanding  during the three months ended March 31, 1999,
         compared to the same period in 1998.

     (iii) A  decrease  of  $0.1  million  in  bad  debt  from  1998  due to the
         collection  of $40,000 from past due  receivables  that had  previously
         been reserved for as a bad debt and the General Partner's evaluation of
         the collectability of receivables due from certain lessees.

     (iv)An increase of $0.2 million in general and administrative  expenses was
         primarily due to increases in  repositioning  and  inspection  costs to
         prepare an aircraft for re-lease.

(C)  Net Gain (loss) on Disposition of Owned Equipment

The net gain on the disposition of owned equipment for the first quarter of 1999
was $13,000, resulting from the disposition of marine containers,  railcars, and
trailers,  with an  aggregate  net book  value of $0.1  million,  for  aggregate
proceeds of $0.1 million. The net loss on the disposition of owned equipment for
the first quarter of 1998 was $10,000,  which  resulted from the  disposition of
marine containers,  trailers, and a railcar, with an aggregate net book value of
$0.3 million, for aggregate proceeds of $0.3 million.

(D)  Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
     (USPEs)

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

                                                     For the Three Months
                                                         Ended March 31,
                                                       1999                1998
                                               ---------------------------------

  Aircraft, aircraft engines, and rotables     $          1,474     $         73
                                               =================================
      Equity in net income of USPEs            $         1,474      $         73
                                               =================================

Aircraft,  aircraft engines, and rotables: As of March 31, 1998, the Partnership
had an interest in two trusts that owned three commercial aircraft, two aircraft
engines,  and a portfolio of aircraft  rotables.  The Partnership sold these two
trusts during the first quarter of 1999. As of March 31, 1998,  the  Partnership
had an interest in a trust that owned four commercial aircraft.  The aircraft in
this  trust  was  transferred  out of the  trust  into the  Partnership's  owned
equipment  portfolio in the second quarter of 1998. The  Partnership's  share of
aircraft revenues and expenses was $1.6 million and $0.1 million,  respectively,
for the quarter ended March 31, 1999, compared to $0.5 million and $0.4 million,
respectively,  during the same  period of 1998.  The $1.6  million  of  aircraft
revenues was the gain from the sale of the  equipment  in the two trusts  during
the first  quarter  of 1999.  No lease  revenues  were  earned  during the first
quarter  of 1999  due to the  sale of the  equipment  in the two  trusts  and an
aircraft  that  was  transferred  out of a trust  into the  Partnership's  owned
equipment  portfolio.  Aircraft expenses  decreased as a result of the sales and
the transfer.

(E)      Net Income

As a result of the foregoing,  the  Partnership had a net income of $1.7 million
in the first quarter of 1999 compared to net income of $0.1 million in the first
quarter of 1998.  The  Partnership's  ability to operate and  liquidate  assets,
secure leases,  and re-lease those assets whose leases expire is subject to many
factors.  Therefore,  the  Partnership's  performance  in the three months ended
March 31, 1999 is not  necessarily  indicative of future  periods.  In the first
quarter  of 1999,  the  Partnership  distributed  $2.0  million  to the  limited
partners, or $0.20 per weighted-average depositary unit.

(II)  FINANCIAL CONDITION -- CAPITAL RESOURCES, LIQUIDITY, AND DISTRIBUTIONS

For the three months ended March 31, 1999, the Partnership  generated  operating
cash  of  $1.3  million  (net  cash  provided  by  operating  activities,   plus
non-liquidating  distributions from USPEs) to meet its operating obligations and
to  make  distributions  (total  for  three  months  ended  March  31,  1999  of
approximately  $2.1  million)  to  the  partners  but  also  used  undistributed
available cash from prior periods of approximately $0.8 million.

During  the three  months  ended  March 31,  1999,  the  Partnership  sold owned
equipment  and  investments  in USPEs and  received  aggregate  proceeds of $3.6
million.

During the first three months of 1999, the Partnership paid down $3.6 million of
the outstanding note balance from the proceeds of asset sales.

PLM Financial  Services,  Inc. (FSI or the General  Partner) has not planned any
expenditure,  nor  is it  aware  of  any  contingencies  that  would  cause  the
Partnership to require any additional capital to that mentioned above.

The Partnership is in its passive  liquidation  phase. As a result,  the size of
the Partnership's  remaining equipment portfolio and, in turn, the amount of net
cash flows from  operations  will  continue to become  progressively  smaller as
assets are sold. Although distribution levels may be reduced,  significant asset
sales may result in potential special distributions to the partners.

(III) EFFECTS OF YEAR 2000

It is possible that the General Partner's  currently installed computer systems,
software  products,  and other business systems,  or the Partnership's  vendors,
service  providers,  and customers,  working either alone or in conjunction with
other  software or systems,  may not accept  input of,  store,  manipulate,  and
output  dates on or after  January  1, 2000  without  error or  interruption  (a
problem commonly known as the "Year 2000" problem). Since the Partnership relies
substantially  on the General  Partner's  software  systems,  applications,  and
control devices in operating and monitoring significant aspects of its business,
any Year 2000  problem  suffered  by the General  Partner  could have a material
adverse effect on the Partnership's business,  financial condition,  and results
of operations.

The General Partner has  established a special Year 2000 oversight  committee to
review  the  impact  of Year  2000  issues on its  software  products  and other
business  systems  in  order to  determine  whether  such  systems  will  retain
functionality  after  December  31, 1999.  The General  Partner (a) is currently
integrating Year  2000-compliant  programming code into its existing  internally
customized and internally developed transaction  processing software systems and
(b) the General Partner's  accounting and asset management software systems have
either already been made Year 2000-compliant or Year 2000-compliant  upgrades of
such systems are planned to be implemented by the General Partner before the end
of  fiscal  1999.  Although  the  General  Partner  believes  that its Year 2000
compliance  program can be completed by the  beginning of 1999,  there can be no
assurance that the  compliance  program will be completed by that date. To date,
the  costs  incurred  and  allocated  to the  Partnership  to  become  Year 2000
compliant have not been material.  Also, the General Partner believes the future
cost  allocable to the  Partnership  to become Year 2000  compliant  will not be
material.

It is possible that certain of the  Partnership's  equipment lease portfolio may
not be  Year  2000  compliant.  The  General  Partner  is  currently  contacting
equipment  manufacturers  of the  Partnership's  leased  equipment  portfolio to
assure Year 2000 compliance or to develop  remediation  strategies.  The General
Partner does not expect that  non-Year 2000  compliance of its leased  equipment
portfolio will have an adverse material impact on its financial statements.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
General  Partner or Partnership to control,  including the extent to which third
parties can address the Year 2000 problem.  The General Partner is communicating
with vendors, services providers, and customers in order to assess the Year 2000
compliance  readiness of such parties and the extent to which the Partnership is
vulnerable to any third-party  Year 2000 issues.  There can be no assurance that
the  software  systems  of such  parties  will be  converted  or made  Year 2000
compliant in a timely manner.  Any failure by the General  Partner or such other
parties  to make  their  respective  systems  Year 2000  compliant  could have a
material  adverse  effect on the business,  financial  position,  and results of
operations from the Partnership. The General Partner will make an ongoing effort
to recognize and evaluate  potential  exposure relating to third-party Year 2000
non-compliance,  and will  develop a  contingency  plan if the  General  Partner
determines that third-party  non-compliance  will have a material adverse effect
on the Partnership's business, financial position, or results of operation.

The General  Partner is currently  developing a contingency  plan to address the
possible  failure of any  systems  due to the Year 2000  problems.  The  General
Partner anticipates these plans will be completed by September 30, 1999.

(IV)  ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting  Standards Board issued  "Accounting for
Derivative   Instruments  and  Hedging   Activities"   (SFAS  No.  133),   which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure  them at fair value.  This  statement is effective  for all
quarters of fiscal years  beginning  after June 15, 1999.  As of March 31, 1999,
the  General  Partner is  reviewing  the effect this  standard  will have on the
Partnership's financial statements.

(V)  OUTLOOK FOR THE FUTURE

The Partnership is its passive liquidation phase. The General Partner is seeking
to  selectively  re-lease or sell assets as the  existing  leases  expire.  Sale
decisions  will cause the operating  performance  of the  Partnership to decline
over the  remainder  of its  life.  The  General  Partner  anticipates  that the
liquidation of Partnership assets will be completed by the scheduled termination
of the Partnership at the end of the year 2000.

Several factors may affect the Partnership's  operating  performance in 1999 and
beyond,  including  changes in the markets for the  Partnership's  equipment and
changes in the regulatory environment in which that equipment operates.

The  ability  of the  Partnership  to  realize  acceptable  lease  rates  on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and  government  or other  regulations.  The  unpredictability  of some of these
factors,  or of their occurrence,  makes it difficult for the General Partner to
clearly  define  trends or  influences  that may impact the  performance  of the
Partnership's  equipment.  The General  Partner  continually  monitors  both the
equipment  markets and the performance of the  Partnership's  equipment in these
markets.  The General Partner may make an evaluation to reduce the Partnership's
exposure to  equipment  markets in which it  determines  that it cannot  operate
equipment and achieve acceptable rates of return.

The  Partnership  intends to use cash flow from  operations  and  proceeds  from
disposition  of  equipment  to  satisfy  its  operating  requirements,  pay loan
principal and interest on debt, and pay cash distributions to the partners.

(VI)  FORWARD-LOOKING INFORMATION

Except  for the  historical  information  contained  herein,  in this  Form 10-Q
contains forward-looking  statements that involve risks and uncertainties,  such
as  statements  of  the  Partnership's  plans,  objectives,   expectations,  and
intentions.  The cautionary  statements made in this Form 10-Q should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q. The Partnership's actual results could differ materially from
those discussed here.



<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Partnership's  primary  market risk exposures are that of interest rate and
currency  devaluation  risk. The  Partnership's  note payable is a variable rate
debt.  The  Partnership  estimates  a one  percent  increase  or decrease in the
Partnership's  variable  rate debt  would  result in an  increase  or  decrease,
respectively,  in  interest  expense  of $0.1  million  in the  remaining  three
quarters of 1999, and $25,000 in 2000. The  Partnership  estimates a two percent
increase or decrease in the Partnership's  variable rate debt would result in an
increase or decrease,  respectively,  in interest expense of $0.2 million in the
remaining three quarters of 1999 and $0.1 million in 2000.

During the first quarter of 1999, 75% of the Partnership's  total lease revenues
from wholly-and  partially-owned equipment came from non-United States domiciled
lessees.  Most of the  Partnership's  leases  require  payment in United  States
(U.S.) currency. If these lessees currency devalues against the U.S. dollar, the
lessees  could  potentially  encounter  difficulty  in  making  the U.S.  dollar
denominated lease payments.

























                      (this space intentionally left blank)



<PAGE>



                          PART II -- OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              None.

         (b)  Reports on Form 8-K

              None.





















                      (this space intentionally left blank)



<PAGE>







Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                    PLM EQUIPMENT GROWTH FUND III

                                    By: PLM Financial Services, Inc.
                                        General Partner




Date:  January 11, 2000             By: /s/ Richard K Brock
                                        -----------------------
                                        Richard K Brock
                                        Vice President and
                                        Corporate Controller