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
           SEPTEMBER 30, 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>
                                                                                               September 30,        December 31,
                                                                                                  1999                 1998
                                                                                             ------------------------------------
         ASSETS

         <S>                                                                                  <C>                  <C>
         Equipment held for operating lease, at cost                                          $      85,547        $   109,680
         Less accumulated depreciation                                                              (68,736)           (81,298)
                                                                                              ------------------------------------
                                                                                                     16,811             28,382
         Equipment held for sale                                                                      1,077                 --
                                                                                              -----------------------------------
                                                                                                     17,888             28,382

         Cash and cash equivalents                                                                      536              3,429
         Accounts receivable, net of allowance for doubtful
             accounts of $1,853 in 1999 and $1,469 in 1998                                              687              1,328
         Investments in unconsolidated special-purpose entities                                       2,598              2,160
         Deferred charges, net of accumulated
             amortization of $490 in 1999 and $403 in 1998                                               55                141
         Prepaid expenses and other assets                                                                1                 72
                                                                                              ------------------------------------

             Total assets                                                                     $      21,765        $    35,512
                                                                                              ====================================

         LIABILITIES AND PARTNERS' CAPITAL

         Liabilities:
         Accounts payable and accrued expenses                                                $         616        $     1,369
         Due to affiliates                                                                              745                168
         Lessee deposits and reserves for repairs                                                     1,278              1,142
         Note payable                                                                                11,068             18,540
                                                                                              ------------------------------------
           Total liabilities                                                                         13,707             21,219
                                                                                              ------------------------------------

         Minority interests                                                                              --              2,211

         Partners' capital:
         Limited partners (9,871,073 depositary units as
             of September 30, 1999 and December 31, 1998)                                             8,058             12,082
         General Partner                                                                                 --                 --
                                                                                              ------------------------------------
           Total partners' capital                                                                    8,058             12,082
                                                                                              ------------------------------------

             Total liabilities and partners' capital                                          $      21,765        $    35,512
                                                                                              ====================================


</TABLE>







                 See accompanying notes to financial statements.

<PAGE>



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

<TABLE>
<CAPTION>

                                                                 For the Three Months                 For the Nine Months
                                                                  Ended September 30,                  Ended September 30,
                                                                  1999            1998                1999            1998
                                                               -------------------------              ---------------------
REVENUES

<S>                                                            <C>             <C>                 <C>            <C>
Lease revenue                                                  $   3,852       $   4,468           $  11,664      $   14,193
Interest and other income                                             80              34                 194             148
Net gain on disposition of equipment                                  12               2                 478           3,727
                                                               -------------------------------------------------------------
  Total revenues                                                   3,944           4,504              12,336          18,068
                                                               --------------------------------------------------------------
EXPENSES
Depreciation and amortization                                      1,982           2,579               5,969           7,900
Repairs and maintenance                                              661             520               1,765           2,003
Marine operating expenses                                            255             207                 640             699
Interest expense                                                     252             340                 813           1,383
Other insurance expense                                               74              66                 201             277
Management fees to affiliate                                         194             253                 626             818
General and administrative expenses to affiliates                    129             135                 378             448
Other general and administrative expenses                            210             173                 847             532
Provision for bad debts                                              407             383                 385              19
                                                                 ------------------------------------------------------------
  Total expenses                                                   4,164           4,656              11,624          14,079
                                                                 ------------------------------------------------------------

Minority interests                                                     4             (94)                 22             (28)
Equity in net income (loss) of unconsolidated
    special-purpose entities                                          --               1               1,477              45
                                                               --------------------------------------------------------------
    Net income (loss)                                          $   (216)       $    (245)          $   2,211      $    4,000
                                                               ================================================================

PARTNERS' SHARE OF NET INCOME (LOSS)

Limited partners                                               $    (320)      $    (375)          $   1,899      $    3,616
General Partner                                                      104             130                 312             390
                                                               ----------------------------------------------------------------
    Total                                                      $    (216)      $    (245)          $   2,211      $    4,006
                                                               ================================================================

Net income (loss) per weighted-average depositary unit         $   (0.03)     $    (0.04)          $    0.19      $     0.37
                                                               ================================================================
Cash distribution                                              $   2,078       $   2,598           $   6,235      $    7,802
                                                               ================================================================
Cash distribution per weighted-average
    depositary unit                                            $    0.20       $    0.25           $    0.60      $     0.75
                                                               ================================================================

</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 September 30, 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                                                1,899             312              2,211

  Cash distribution                                        (5,923)           (312)            (6,235)
                                                       -------------------------------------------------

    Partners' capital as of September 30, 1999         $    8,058         $    --         $    8,058
                                                       =================================================
</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 Nine Months
                                                                                                    Ended September 30,
                                                                                                     1999            1998
                                                                                                 -----------------------------
  OPERATING ACTIVITIES

  <S>                                                                                             <C>             <C>
  Net income                                                                                      $    2,211      $    4,006
  Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                     5,969            7,900
    Net gain on disposition of equipment                                                               (478)          (3,727)
    Equity in net income from unconsolidated special-purpose entities                                (1,477)             (45)
    Changes in operating assets and liabilities:
      Accounts receivable, net                                                                          250              493
      Prepaid expenses and other assets                                                                  26               47
      Accounts payable and accrued expenses                                                            (652)            (805)
      Due to affiliates                                                                                   4           (2,054)
      Lessee deposits and reserves for repairs                                                          337             (109)
      Minority interests                                                                               (224)            (139)
                                                                                                  ----------------------------
        Net cash provided by operating activities                                                     5,966            5,567
                                                                                                  ----------------------------

  INVESTING ACTIVITIES

  Payments for capitalized improvements                                                                 (19)             (54)
  Payments for capitalized improvements in unconsolidated special-purpose entity                         --           (1,198)
  Distributions from unconsolidated special-purpose entities                                             20            2,389
  Distributions from liquidation of unconsolidated special-purpose entity                             3,548              --
  Proceeds from disposition of equipment                                                                699           11,625
                                                                                                  ----------------------------
        Net cash provided by investing activities                                                     4,248           12,762
                                                                                                  ----------------------------

  FINANCING ACTIVITIES

  Loan from affiliate                                                                                   600              --
  Principal payments on note payable                                                                 (7,472)         (10,750)
  Cash distributions paid to limited partners                                                        (5,923)          (7,412)
  Cash distributions paid to General Partner                                                           (312)            (390)
                                                                                                  ----------------------------
        Net cash used in financing activities                                                       (13,107)         (18,552)
                                                                                                  ----------------------------

  Net decrease in cash and cash equivalents                                                          (2,893)            (223)
  Cash and cash equivalents at beginning of period                                                    3,429            4,239
                                                                                                  ----------------------------
  Cash and cash equivalents at end of period                                                      $     536      $     4,016
                                                                                                  ============================

  SUPPLEMENTAL INFORMATION
  Interest Paid                                                                                   $     813      $     1,389

</TABLE>






                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 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 September 30, 1999 and December 31, 1998,
     the statements of operations for the three and nine months ended  September
     30, 1999 and 1998, the  statements of changes in partners'  capital for the
     period from December 31, 1997 to September 30, 1999,  and the statements of
     cash flows for the nine months ended  September 30, 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  liquidation  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 that are considered to represent a return of capital. For the
     three months ended September 30, 1999 and 1998, cash distributions  totaled
     $2.1  million and $2.6  million,  respectively.  For the nine months  ended
     September 30, 1999 and 1998,  cash  distributions  totaled $6.2 million and
     $7.8 million,  respectively.  Cash distributions to the limited partners of
     $4.0 million and $3.8 million for the nine months ended  September 30, 1999
     and 1998, respectively, were deemed to be a return of capital.

     Cash  distributions  related to the results from the third quarter of 1999,
     of $1.6 million, will be paid during November 1999.

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

     The balance due to  affiliates  as of  September  30,  1999  included  $0.1
     million due to FSI and its affiliate for management  fees, and $0.7 million
     due to PLM  International,  Inc. On September 30, 1999, PLM  International,
     Inc. loaned the Partnership  $0.6 million.  The  Partnership's  senior debt
     prohibits the  Partnership  from  incurring  additional  indebtedness.  The
     Partnership  has  received a waiver from the bank,  which allows this loan.
     The waiver requires that the  Partnership may not repay PLM  International,
     Inc.
     until the Partnership makes the December 31, 1999 senior debt payment.

     The balance due to  affiliates  as of December 31, 1998 included $0.2
     million due to FSI and its affiliate for management fees.

     The Partnership's proportional share of USPE-affiliated management fees, of
     $1,400 and $3,000,  were payable as of September  30, 1999 and December 31,
     1998, respectively.


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 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):
<TABLE>
<CAPTION>

                                                       For the Three Months               For the Nine Months
                                                       Ended September 30,                Ended September 30,
                                                       1999           1998               1999            1998
                                                    --------------------------------------------------------------

  <S>                                               <C>            <C>                <C>             <C>
  Management fees                                   $      --      $      10          $     --        $     37
  Data processing and administrative
      expenses                                             --              5                 2              23
</TABLE>


5.   EQUIPMENT

     Owned equipment held for operating lease is stated at cost.  Equipment held
     for sale is stated at the lower of the equipment's depreciated cost or fair
     value,  less cost to sell,  and is subject to a pending  contract for sale.
     The components of equipment were as follows (in thousands of dollars):
<TABLE>
<CAPTION>


                                                                 September 30,          December 31,
                                                                    1999                  1998
                                                               --------------------------------------
  <S>                                                           <C>                    <C>
  Aircraft                                                      $     42,000           $   52,028
  Railcars                                                            33,565               33,999
  Marine vessel                                                           --               12,790
  Trailers                                                             5,155                5,257
  Marine containers                                                    4,827                5,606
                                                               --------------------------------------
                                                                      85,547              109,680
  Less accumulated depreciation                                      (68,736)             (81,298)
                                                               --------------------------------------
                                                                      16,811               28,382
  Equipment held for sale                                              1,077                   --
                                                               -------------------------------------
      Net equipment                                             $     17,888           $   28,382
                                                                =====================================
</TABLE>


     As of September 30, 1999,  all equipment in the  Partnership  portfolio was
     either on lease or operating in  PLM-affiliated  short-term  trailer rental
     facilities,  except for 62 railcars  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 $1.7 million and $2.4 million as of September  30,
     1999 and December 31, 1998, respectively.

     Capital improvements to the Partnership's  equipment of $19,000 and $54,000
     were made during the nine months ended September 30, 1999 and September 30,
     1998, respectively.

     During the nine months ended  September 30, 1999, the  Partnership  sold or
     disposed of marine containers,  trailers,  and railcars,  with an aggregate
     net book value of $0.2  million,  for  aggregate  proceeds of $0.7 million.
     During the nine months ended  September 30, 1998, the  Partnership  sold or
     disposed of marine containers,  trailers,  railcars,  and a mobile offshore
     drilling  unit,  with an  aggregate  net book  value of $8.0  million,  for
     aggregate proceeds of $11.7 million.

     As of September 30, 1999, a DC-9 aircraft was  classified as equipment held
     for sale.

     During  September 1999,  certain  equipment in which the Partnership held a
     majority ownership, was reclassified to investments in USPE's (see note 6)



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

6.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES

     In September 1999, the General Partner amended the corporate-by-laws of the
     Partnership and any affiliated program's  investments in USPE's that own an
     interest greater than 50%. The amendment to the corporate-by-laws  provides
     that  all  decisions  regarding  the  acquisition  and  disposition  of the
     investment  as  well  as  other  significant  business  decisions  of  that
     investment   would  be  permitted  only  upon  unanimous   consent  of  the
     Partnership  and all the affiliated  programs that have an ownership in the
     investment  regardless of the  percentage of ownership.  As a result of the
     amendment,  as of September 30, 1999, all jointly owned  equipment in which
     the Partnership  owned a majority  interest,  which had been  consolidated,
     were  reclassified  to  investments  in  USPE's.  As  such,   although  the
     Partnership may own a majority interest in a USPE, the Partnership does not
     control its  management  and thus it is  appropriate in the future that the
     equity method of accounting be used. Accordingly, as of September 30, 1999,
     the balance sheet reflects all investments in USPEs on an equity basis.

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

                                                                                September 30,      December 31,
                                                                                   1999               1998
                                                                              ---------------------------------

<S>                                                                            <C>                 <C>
56% interest in an entity owning a marine vessel                               $    2,529          $       --
25% interest in a trust that owned four commercial aircraft                            69                 106
17% interest in two trusts that owned a total of three commercial aircraft,
two aircraft engines, and a portfolio of rotable components                            --               2,054
                                                                               ---------------------------------

    Net investments                                                            $    2,598          $    2,160
                                                                               =================================
</TABLE>


     The Partnership  sold its 17% interest in the two trusts that owned a total
     of 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.

     As of September 30, 1999 and December 31, 1998, all jointly-owned equipment
     in the Partnership's USPE portfolio was on lease.

7.   OPERATING SEGMENTS

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



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999


7.   OPERATING SEGMENTS (CONTINUED)

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

                                                                 Marine                  Marine
                                           Aircraft  Railcar     Vessel       Trailer   Container   All
For the quarter ended September 30, 1999   Leasing   Leasing     Leasing      Leasing    Leasing    Other<F1>1 Total

     REVENUES
       <S>                                 <C>       <C>        <C>         <C>         <C>      <C>        <C>
       Lease revenue                       $  1,399  $  1,691   $     547   $    192    $    23  $     --   $   3,852
       Interest income and other                  4        --          45         --         --        31          80
       Net gain (loss) on disposition of
         Equipment                               --        13          --         (1)        --        --          12
                                           --------------------------------------------------------------------------
         Total revenues                       1,403     1,704         592        191         23        31       3,944

     COSTS AND EXPENSES
       Operations support                        82       506         334         57          2         9         990
       Depreciation and amortization          1,194       441         215         89         28        15       1,982
       Interest expense                          --        --          --         --         --       252         252
       Management fees                           37       116          28         11          2        --         194
       General and administrative expenses       56        72          21         35         (1)      156         339
       Provision for bad debts                  378        19          --         10         --        --         407
                                           --------------------------------------------------------------------------
         Total costs and expenses             1,747     1,154         598        202         31       432       4,164
                                           --------------------------------------------------------------------------
       Minority interests                        --        --           4         --         --        --          4
     Equity in net loss of USPEs                 --        --          --         --         --
                                           --------------------------------------------------------------------------
     Net income (loss)                     $   (344) $    550   $      (2)  $    (11)   $    (8) $   (401)  $   (216)
                                           ==========================================================================

     Total assets as of September 30, 1999 $  9,424  $  6,787   $   2,529   $  2,023    $   419  $    583   $ 21,765
                                           ==========================================================================



                                                                 Marine                  Marine
                                           Aircraft  Railcar     Vessel       Trailer   Container  All
For the quarter ended September 30, 1998   Leasing   Leasing     Leasing      Leasing    Leasing   Other<F1>1  Total

     REVENUES
       Lease revenue                       $  1,614  $  1,755   $     739   $    310    $     50  $    --   $ 4,468
       Interest income and other                 10        --          --         --         --        24         34
       Net gain (loss) on disposition of
         equipment                               --         1          --        (18         19        --          2
                                           --------------------------------------------------------------------------
         Total revenues                       1,624     1,756         739        292         69        24      4,504

     Costs and Expenses
       Operations support                        22       478         224         53          2        14        793
       Depreciation and amortization          1,684       461         257        114         48        15      2,579
       Interest expense                          --        --          --         --         --       340        340
       Management fees                           68       126          37         19          3        --        253
       General and administrative expenses       20        62           9         33          1       183        308
       Provision for (recovery of) bad          378         9          --         (4)        --        --        383
     debts
                                           --------------------------------------------------------------------------
         Total costs and expenses             2,172     1,136         527        215         54       552      4,656
                                           --------------------------------------------------------------------------
       Minority interests                        --        --         (94)        --         --        --        (94)
     Equity in net income of USPEs                1        --          --         --         --        --          1
                                           --------------------------------------------------------------------------
     Net income (loss)                     $   (547) $    620   $     118   $     77    $    15  $   (528)  $   (245)
                                           ==========================================================================

     Total assets as of September 30, 1998 $ 16,872  $  8,610   $   5,469   $  2,507    $   870  $  4,414   $ 38,742
                                           ==========================================================================



<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
                               September 30, 1999

7.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                                 Marine                  Marine
                                           Aircraft  Railcar     Vessel       Trailer   Container  All
For the nine months ended September 30,    Leasing   Leasing     Leasing      Leasing    Leasing   Other<F1>1 Total
1999

 REVENUES
       <S>                                 <C>       <C>        <C>         <C>         <C>      <C>       <C>
       Lease revenue                       $  4,418  $  5,160   $   1,477   $    515    $    94  $     --  $  11,664
       Interest income and other                 14        --          45         --         --       135        194
       Net gain (loss) on disposition of
         equipment                                2       383          --         (7)       100        --        478
                                           --------------------------------------------------------------------------
         Total revenues                       4,434     5,543       1,522        508        194       135     12,336

     COSTS AND EXPENSES
       Operations support                       292     1,315         817        151          2        29      2,606
       Depreciation and amortization          3,599     1,326         643        266         90        45      5,969
       Interest expense                          --        --          --         --         --       813        813
       Management fees                          161       356          74         30          5        --        626
       General and administrative expenses      389       195          44         91          3       503      1,225
       Provision for (recovery of) bad          358        48          --        (21)        --        --        385
     debts
                                           --------------------------------------------------------------------------
         Total costs and expenses             4,799     3,240       1,578        517        100     1,390     11,624
                                           --------------------------------------------------------------------------
       Minority interests                        --        --          22         --         --        --         22
     Equity in net income (loss) of USPEs     1,477        --          --         --         --        --      1,477
                                           --------------------------------------------------------------------------
     Net income (loss)                     $  1,112     2,303         (34)        (9)        94    (1,255)     2,211
                                           ==========================================================================

     Total assets as of September 30, 1999 $  9,424  $  6,787   $   2,529   $  2,023    $   419  $    583     21,765
                                           ==========================================================================
<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>


<TABLE>
<CAPTION>

                                                                 Marine                  Marine
                                         Aircraft  Railcar     Vessel       Trailer   Container    MODU    All
For the nine months ended September 30,  Leasing   Leasing     Leasing      Leasing   Leasing    Leasing   Other<F1>1  Total
1998

    REVENUES
       <S>                                 <C>       <C>        <C>         <C>         <C>      <C>        <C>       <C>
       Lease revenue                       $  4,962  $  5,411   $   1,907   $    940    $  217   $    756   $     --  $ 14,193
       Interest income and other                 16        --          --         --        --         --        132       148
       Net gain (loss) on disposition of
         equipment                              (14)      159          --        (88)       51      3,619         --     3,727
                                           ------------------------------------------------------------------------------------
         Total revenues                       4,964     5,570       1,907        852       268      4,375        132    18,068

     COSTS AND EXPENSES
       Operations support                        96     1,666         978        173         5         19         42     2,979
       Depreciation and amortization          4,552     1,389         771        384       198        512         94     7,900
       Interest expense                          --        --          --         --        --         --      1,383     1,383
       Management fees                          238       377          95         59        11         38         --       818
       General and administrative expenses       80       202          72        131         4         --        491       980
       Provision for (recovery of) bad           20        (6)         --          5        --         --         --        19
     debts
                                           ------------------------------------------------------------------------------------
         Total costs and expenses             4,986     3,628       1,916        752       218        569      2,010    14,079
                                           ------------------------------------------------------------------------------------
       Minority interests                        --        --         (28)        --        --         --         --       (28)
     Equity in net income of USPEs               45        --          --         --        --         --         --        45
                                           ------------------------------------------------------------------------------------
     Net income (loss)                     $     23     1,942         (37)       100        50      3,806     (1,878)    4,006
                                           ====================================================================================

     Total assets as of September 30, 1998 $ 16,872  $  8,610   $   5,469   $  2,507       870   $     --   $  4,414  $ 38,742
                                           ====================================================================================

<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
                               SEPTEMBER 30, 1999

8.   DEBT

     During the first nine months of 1999, the  Partnership  repaid $7.5 million
     of the  outstanding  note  balance  from the  proceeds of asset  sales.  On
     September 30, 1999, PLM  International,  Inc. loaned the  Partnership  $0.6
     million.  The loan proceeds were used to fund operations of the Partnership
     and pay the  principal and interest on the  Partnership  debt due September
     30, 1999.  The  Partnership's  senior debt prohibits the  Partnership  from
     incurring  additional  indebtedness.  The Partnership has received a waiver
     from the bank,  which  allows  this  loan.  The  waiver  requires  that the
     Partnership  may not repay PLM  International,  Inc. until the  Partnership
     makes the December 31, 1999 senior debt payment.

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 and nine months ended September 30, 1999 and 1998 was 9,871,073.

10.  RESTATEMENT

     The  financial  statements,  with the  exception of the balance sheet as of
     September 30, 1999, 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 and
     nine months ending September 30, 1999 and 1998.

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

                                           1998
                               As reported          Amended
                              ----------------------------------
     Total assets                  33,068           $35,512
     Total liabilities             20,986            21,219
     Minority interests                --             2,211

     Additionally,  as a result  of the  consolidation,  total  revenues,  total
     expenses,  and equity in net income of USPEs changed for the three and nine
     months ended September 30, 1999 and 1998 as follows:
<TABLE>
<CAPTION>


                        For the three months ended September 30,             For the nine months ended September 30,
                                1999                      1998                       1999                  1998
                          As reported    Amended    As reported    Amended   As reported   Amended  As reported    Amended
                         ---------------------------------------------------------------------------------------------------
          <S>                <C>        <C>          <C>         <C>         <C>         <C>        <C>          <C>
          Total revenues     $ 3,352    $  3,944     $ 3,765     $  4,504    $  10,814   $ 12,336   $  16,161    $  18,068
          Total expenses       3,566       4,164       4,129        4,656       10,051     11,624      12,234       14,079
          Minority                --           4          --          (94)          --         22          --          (28)
          interests
          Equity in net
          income of USPEs         (2)         --         119            1        1,448      1,477          79           45
          Net income         $  (216)    $  (216)     $ (245)     $  (245)   $   2,211  $   2,211    $  4,006     $  4,006
</TABLE>


     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 and
     nine months ended September 30, 1999 and 1998.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

10.  RESTATEMENT (CONTINUED)

     In September 1999, the General Partner amended the corporate-by-laws of the
     Partnership and any affiliated program's  investments in USPE's that own an
     interest greater than 50%. The amendment to the corporate-by-laws  provides
     that  all  decisions  regarding  the  acquisition  and  disposition  of the
     investment  as  well  as  other  significant  business  decisions  of  that
     investment   would  be  permitted  only  upon  unanimous   consent  of  the
     Partnership  and all the affiliated  programs that have an ownership in the
     investment  regardless of the  percentage of ownership.  As a result of the
     amendment,  as of September 30, 1999, all jointly owned  equipment in which
     the Partnership  owned a majority  interest,  which had been  consolidated,
     were  reclassified  to  investments  in  USPE's.  As  such,   although  the
     Partnership may own a majority interest in a USPE, the Partnership does not
     control its  management  and thus it is  appropriate in the future that the
     equity method of accounting be used. Accordingly, as of September 30, 1999,
     the balance sheet reflects all investments in USPEs on an equity basis.

11.  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 General Partner believes
     an unfavorable outcome from the counterclaims is remote.

     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>


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 SEPTEMBER 30, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues less direct  expenses  (defined as repairs and  maintenance  and
asset-specific insurance expenses) on owned equipment decreased during the three
months ended September 30, 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 September 30,
                                         1999              1998
                                     ------------------------------------

  Aircraft                            $    1,317       $     1,592
  Railcars                                 1,185             1,277
  Marine vessel                              213               515
  Trailers                                   135               257
  Marine containers                           21                48

Aircraft: Aircraft lease revenues and direct expenses were $1.4 million and $0.1
million,  respectively,  for the quarter ended  September 30, 1999,  compared to
$1.6 million and $22,000,  respectively,  during the same period of 1998.  Lease
revenues decreased $0.2 million during the nine months ended September 30, 1999,
when  compared  to the same  period in 1998.  A $0.1  million  decrease in lease
revenues was due to an aircraft being offlease  during the third quarter of 1999
which was on lease  during the third  quarter of 1998 and the lease  revenues of
this  aircraft  was $0.1  million for the third  quarter of 1998. A $0.1 million
decrease in lease revenues was due to another aircraft that came offlease during
September of 1999 which was on lease during the third quarter of 1998. The lease
revenues  from  these two  aircraft  were $0.2  million  for the  quarter  ended
September 30, 1999, compared to $0.4 million during the same period of 1998.

Railcars: Railcars lease revenues and direct expenses were $1.7 million and $0.5
million,  respectively,  for the quarter ended  September 30, 1999,  compared to
$1.8 million and $0.5 million, respectively, during the same period of 1998. The
decrease in railcar  contribution  in the third  quarter of 1999 compared to the
same period of 1998 was due to the sale or  disposition  of railcars in 1998 and
1999.

Marine  vessel:  Marine  vessel  lease  revenues and direct  expenses  were $0.5
million and $0.3  million,  respectively,  for the quarter  ended  September 30,
1999, compared to $0.7 million and $0.2 million,  respectively,  during the same
period of 1998.  The decrease in lease  revenues was due to lower lease rates in
the three months ended  September  30, 1999 when  compared to the same period of
1998. The increase in direct expenses was due to $0.1 million increase in marine
operating expenses and repairs and maintenance expenses

Trailers:  Trailer lease revenues and direct expenses were $0.2 million and $0.1
million,  respectively,  for the quarter ended  September 30, 1999,  compared to
$0.3 million and $0.1 million, respectively, during the same period of 1998. The
decreases in revenue is due primarily to a group of trailers  coming off a fixed
term lease in the first  quarter of 1999,  and were  off-lease  during the third
quarter of 1999.



<PAGE>


(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $3.2 million for the quarter ended September 30, 1999
decreased from $3.9 million for the same period of 1998.  Significant  variances
are explained as follows:

     (i) A decrease of $0.6 million in depreciation  and  amortization  expenses
         from 1998 levels reflects 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 $0.1  million  in  interest  expense  was due to a lower
         average debt  outstanding  during the three months ended  September 30,
         1999, compared to the same period in 1998.

     (iii) A decrease of $0.1 million in management  fees to affiliate from 1998
         levels  was due to  lower  lease  revenue  in the  three  months  ended
         September 30, 1999, compared to the same period of 1998.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the disposition of owned equipment for the third quarter of 1999
was $12,000, resulting from the disposition of marine containers,  railcars, and
trailers, with an aggregate net book value of $21,000, for aggregate proceeds of
$33,000.  The net gain on the  disposition  of  owned  equipment  for the  third
quarter  of 1998 was  $2,000,  which  resulted  from the  disposition  of marine
containers  and trailers with an aggregate  net book value of $0.1 million,  for
aggregate proceeds of $0.1 million.

(D)      Minority interests

A  decrease  of $0.1  million  in  minority  interests  was due to $0.1  million
decrease in repairs and maintenance expenses.

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

Net income  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 September 30,
                                                    1999              1998
                                               ---------------------------------

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

Aircraft,  aircraft  engines,  and  rotables:  As of  September  30,  1998,  the
Partnership's  interest  in two trusts  that  owned a total of three  commercial
aircraft,  two  aircraft  engines,  and a portfolio  of aircraft  rotables.  The
Partnership  sold these two trusts  during the first quarter of 1999. No revenue
or expenses were recorded during the quarter ended September 30, 1999,  compared
to $0.2 million and $0.2 million, respectively,  during the same period of 1998.
The decrease in revenues and expenses  were due to the sale of the  equipment in
the two trusts, which were sold in the first quarter of 1999.

(F)  Net Loss

As a result of the foregoing,  the Partnership had a net loss of $0.2 million in
the third  quarter of 1999 and 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  September 30, 1999 is not  necessarily  indicative of future
periods. In the third quarter of 1999, the Partnership  distributed $2.0 million
to the limited partners, or $0.20 per weighted-average depositary unit.




<PAGE>


COMPARISON OF THE PARTNERSHIP'S OPERATING RESULTS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues less direct  expenses  (defined as repairs and  maintenance  and
asset-specific  insurance expenses) on owned equipment decreased during the nine
months ended September 30, 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 Nine Months
                                                      Ended September 30,
                                                    1999              1998
                                              ----------------------------------

  Aircraft                                     $       4,126      $     4,866
  Railcars                                             3,845            3,745
  Marine vessel                                          660              929
  Trailers                                               364              767
  Marine containers                                       92              212
  Mobile offshore drilling unit                           --              737
  Marine vessel                                           --              (63)

Aircraft: Aircraft lease revenues and direct expenses were $4.4 million and $0.3
million, respectively, for the nine months ended September 30, 1999, compared to
$5.0  million and $0.1  million,  respectively,  during the same period of 1998.
Lease revenues decreased $0.6 million during the nine months ended September 30,
1999, when compared to the same period in 1998. A $0.9 million decrease in lease
revenues was due to an aircraft being  offlease  during the first nine months of
1999  which  was on lease  during  the first  nine  months of 1998 and the lease
revenues of this  aircraft was $0.9 million for the nine months ended  September
30, 1998. A $0.1 million  decrease in lease revenues was due to another aircraft
that came offlease during  September of 1999 which was on lease during the first
nine months of 1998.  The decrease in lease revenue was partially  offset by the
increase in lease revenue of $0.4 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 $5.2 million and $1.3
million, respectively, for the nine months ended September 30, 1999, compared to
$5.4 million and $1.7 million, respectively, during the same period of 1998. The
decrease in lease revenues and expenses for the nine months ended  September 30,
1999 compared to the same period of 1998 was due to the sale or  disposition  of
railcars in 1998 and 1999.

Marine  vessel:  Marine  vessel  lease  revenues and direct  expenses  were $1.5
million and $0.8  million,  respectively,  for the quarter  ended  September 30,
1999, compared to $1.9 million and $1.0 million,  respectively,  during the same
period of 1998.  The decrease in lease  revenues was due to lower lease rates in
the nine months  ended  September  30, 1999 when  compared to the same period of
1998. The decrease in direct expenses was due to $0.1 million decrease in marine
operating expenses and $0.1 million decrease in repairs and maintenance expenses

Trailers:  Trailer lease revenues and direct expenses were $0.5 million and $0.2
million, respectively, for the nine months ended September 30, 1999, compared to
$0.9 million and $0.2 million,  respectively,  during the same period of 1998. A
decrease in revenue of $0.2 million was due to a group of trailers  coming off a
fixed term lease in the first quarter of 1999 that remained off-lease during the
second and third quarters of 1999. A $0.2 million decrease in revenue was due to
sales and dispositions of trailers.

Marine containers: Marine container lease revenues and direct expenses were $0.1
million and $2,000, respectively,  for the nine months ended September 30, 1999,
compared to $0.2  million and  $5,000,  respectively,  during the same period of
1998.  The  decrease in lease  revenues  was caused by a  worldwide  increase in
available marine containers, which has lead to a decline in the lease rate.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct expenses were $0.8 million and $19,000, respectively, for the nine months
ended September 30, 1998. The Partnership sold its mobile offshore drilling unit
in June of 1998.

(B)   Indirect Operating Expenses Related to Owned Equipment Operations

Total indirect  expenses of $9.0 million for the nine months ended September 30,
1999  decreased  from $11.1  million  for the same  period of 1998.  Significant
variance is explained as follows:

     (i) A decrease in depreciation  and  amortization  expenses of $1.9 million
         from 1998 levels reflects 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 $0.6 million in interest expense was due to lower average
         debt  outstanding  during the nine months ended September 30, 1999 when
         compared to the same period of 1998.

     (iii) A decrease of $0.2 million in management  fees to affiliate from 1998
         levels was due to lower  lease  revenue  during the nine  months  ended
         September 30, 1999, compared to the same period of 1998.

     (iv) An  increase  of $0.4  million in bad debt  expense due to the General
          Partner's  evaluation of the collectability of receivables due from an
          aircraft lessee.

     (v)  An increase of $0.2  million in general  and  administrative  expenses
          from 1998 levels was primarily due to increases in  repositioning  and
          inspection costs to prepare an aircraft for re-lease.

(C)   Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of  equipment  was $0.5  million  for the nine
months  ended  September  30, 1999,  resulting  from the  disposition  of marine
containers,  trailers,  and railcars  with an  aggregate  net book value of $0.2
million,  for  aggregate  proceeds of $0.7  million.  For the nine months  ended
September 30, 1998, the net gain of $3.7 million  resulting from the disposition
of marine containers,  trailers,  railcars,  and a mobile offshore drilling unit
with an aggregate  net book value of $8.0  million,  for  aggregate  proceeds of
$11.7 million.

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

Net income  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 Nine Months
                                                        Ended September 30,
                                                      1999              1998
                                                 ------------------------------

  Aircraft, aircraft engines, and rotables      $      1,477        $     45
                                                -------------------------------
      Equity in net income                      $      1,477        $     45
                                                ===============================

Aircraft, aircraft  engines,  and  rotables:  As of  September  30,  1998,  the
Partnership had an interest in two trusts that owned a total of three commercial
aircraft,  two aircraft  engines,  and a portfolio of aircraft.  The Partnership
sold these two trusts  during the first  quarter of 1999.  As of  September  30,
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 nine months ended September 30, 1999, compared to
$1.0 million and $0.9 million, respectively, during the same period of 1998. The
$1.6  million  represented  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 nine months 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 net income of $2.2 million for
the nine  months  ended  September  30,  1999,  compared to a net income of $4.0
million in the same period of 1998.  The  Partnership's  ability to operate,  or
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
is subject to many factors. Therefore, the Partnership's performance in the nine
months ended September 30, 1999 is not necessarily indicative of future periods.
The Partnership  distributed $5.9 million to the limited partners,  or $0.60 per
weighted-average depositary unit in the nine months ended September 30, 1999.

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

For the  nine  months  ended  September  30,  1999,  the  Partnership  generated
operating cash of $6.0 million (net cash provided by operating activities,  plus
non-liquidating  distributions from USPEs) to meet its operating obligations and
to make  distributions  (total  for nine  months  ended  September  30,  1999 of
approximately $6.2 million) to the partners,  but used  undistributed  available
cash from prior periods of approximately $0.2 million.

During the nine months ended  September  30, 1999,  the  Partnership  sold owned
equipment  and  investments  in USPEs and  received  aggregate  proceeds of $4.2
million.

Lessee  deposits and reserve for repairs  increased $0.2 million during the nine
months ended  September 30, 1999 compared to December 31, 1998.  The increase in
lessee  deposits and reserve for repairs was the result of  additional  reserves
needed for aircraft engine repair.

During the first nine months of 1999, the Partnership repaid $7.5 million of the
outstanding  note balance from the  proceeds of asset  sales.  On September  30,
1999, PLM  International,  Inc.  loaned the Partnership  $0.6 million.  The loan
proceeds were used to fund  operations of the  Partnership and pay the principal
and interest on the Partnership  debt due September 30, 1999. The  Partnership's
senior debt prohibits the Partnership  from incurring  additional  indebtedness.
The Partnership has received a waiver from the bank, which allows this loan. The
waiver requires that the Partnership may not repay PLM International, Inc. until
the Partnership makes the December 31, 1999 senior debt payment.  As of November
8, 1999, the outstanding note balance was $11.1 million.

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 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 those of 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 possibility commonly known as the "Year 2000" or "Y2K" problem.
As 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  business  systems  in order to
determine  whether  such systems will retain  functionality  after  December 31,
1999. As of September  30, 1999,  the General  Partner has completed  inventory,
assessment,  remediation  and testing stages of its Year 2000 review of its core
business  information  systems.   Specifically,  the  General  Partner  (a)  has
integrated 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
been made Year 2000  compliant.  In addition,  numerous other  software  systems
provided  by vendors and  service  providers  have been  replaced  with  systems
represented by the vendor or service provider to be Year 2000 functional.  These
systems have been fully tested and appear to be compliant.

As of September 30, 1999, the costs incurred and allocated to the Partnership to
become Year 2000  compliant  have not been material and does not  anticipate any
additional Year 2000-compliant expenditures.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Partnership or General  Partner 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
readiness of such parties and the extent to which the  Partnership is vulnerable
to any  third-party  Year 2000  issues.  As part of this  process,  vendors  and
service providers were ranked in terms of the relative importance of the service
or product  provided.  All service  providers and vendors who were identified as
medium to high relative  importance were surveyed to determine Year 2000 status.
The General Partner has received  satisfactory  responses to Year 2000 readiness
inquiries from surveyed service providers and vendors.

It is possible that certain of the  Partnership's  equipment lease portfolio may
not be  Year  2000  compliant.  The  General  Partner  has  contacted  equipment
manufacturers of the portion of the  Partnership's  leased  equipment  portfolio
identified  as date  sensitive  to assure  Year 2000  compliance  or to  develop
remediation  strategies.  The  Partnership  does not expect that  non-Year  2000
compliance  of its leased  equipment  portfolio  will have an  adverse  material
impact on its  financial  statements.  The  General  Partner  has  surveyed  the
majority of its  lessees  and the  majority  of those  surveyed  have  responded
satisfactorily to Year 2000 readiness inquiries.

There can be no  assurance  that the  software  systems of such  parties will be
converted or made Year 2000 compliant in a timely manner. 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 of the Partnership.  The General Partner has
made and will  continue an ongoing  effort to recognize  and evaluate  potential
exposure  relating to third party Year 2000  noncompliance.  The General Partner
will  implement  a  contingency  plan if the  General  Partner  determines  that
third-party   noncompliance   would  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 or vendors or service providers due to Year 2000
problems.  For the purpose of such  contingency  planning,  a reasonably  likely
worst case scenarios primarily  anticipate a) an inability to access systems and
data on a temporary basis resulting in possible delay in reconciliation of funds
received or payment of monies owed,  or b) an inability to  continuously  employ
equipment  assets  due to  temporary  Year  2000  related  failure  of  external
infrastructure  necessary to the ongoing operation of the equipment. The General
Partner is evaluating  whether there are  additional  scenarios,  which have not
been  identified.  Contingency  planning  will  encompass  strategies  up to and
including  manual  processes.  The General Partner  anticipates that these plans
will be completed by the fourth quarter of 1999.

(IV)  ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities,"  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.

FASB Statement No. 137,  "Accounting for Derivatives,  Instruments,  and Hedging
Activities  - Deferral  of the  Effective  Date of FASB  Statement  No.  133, an
amendment of FASB Statement No. 133," issued in June 1999,  defers the effective
date of Statement No. 133.  Statement No. 133, as amended,  is now effective for
all fiscal  quarters of all fiscal years  beginning  after June 15, 2000.  As of
September  30, 1999,  the Company is reviewing the effect SFAS No. 133 will have
on the Company's consolidated financial statements.



<PAGE>


(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 the
remainder  of  1999  and  beyond,  including  changes  in the  markets  for  the
Partnership's  equipment and changes in the regulatory environment in which that
equipment operates.

Liquidation  of  Partnership  equipment and  investments  in USPEs  represents a
reduction in the size of the  equipment  portfolio and may result in a reduction
of contribution to the Partnership.  Other factors  affecting the  Partnership's
contribution in the remainder of 1999 and beyond include:

1. The  Partnership  is  experiencing  difficulty in re-leasing  and selling its
older aircraft.

2. The purchase price of new  containers  continues to be at very low historical
levels.  These lower prices have put  downward  pressure on per diem lease rates
that customers are willing to pay for the rental of containers.

3.  Depressed  economic  conditions in Asia have led to declining  freight rates
through the early part of 1999 for drybulk  vessels.  The market has  stabilized
and is  expected  to  improve  over  the next 2-3  years in the  absence  of new
additional  orders.  Since this  Partnership  will be in the  liquidation  phase
during 2000, the Partnership will sell its interest in this vessel during 2000.

4.  Railcar  loading  in North  America  have  continued  to be high,  however a
softening  in the market is  expected  in the  remainder  of 1999 and into 2000,
which may lead to lower utilization and lower contribution to the Partnership.

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 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/A
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/A should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q/A.  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 $28,000 in the remaining  quarter of 1999,
and  $28,000 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 $0.1 million in the  remaining
quarter of 1999 and $0.1 million in 2000.

During the nine months ended September 30, 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 24, 2000                    By: /s/ Richard K Brock
                                               --------------------------------
                                               Richard K Brock
                                               Vice President and
                                               Corporate Controller