UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               -------------------
                                    FORM 10-Q


         [X]      Quarterly  Report  Pursuant  to  Section  13 or  15(d)  of the
                  Securities  Exchange Act of 1934 For the fiscal  quarter ended
                  March 31, 1997.

         [  ]     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)

                                     ASSETS
<TABLE>
<CAPTION>

                                                                                                    March 31,          December 31,
                                                                                                      1997                 1996
                                                                                                 ----------------------------------

          <S>                                                                                     <C>                  <C>        
          Equipment held for operating leases, at cost                                            $     135,708        $   136,670
            Less accumulated depreciation                                                               (81,433 )          (78,607 )
                                                                                                  ---------------------------------
            Net equipment                                                                                54,275             58,063

          Cash and cash equivalents                                                                       2,027              1,414
          Restricted cash and marketable securities                                                       6,043              5,966
          Investments in unconsolidated special purpose entities                                          9,572             11,138
          Accounts and note receivable, net of allowance for
            doubtful accounts of $1,356 in 1997 and $1,381 in 1996                                        1,490              1,515
          Prepaid expenses                                                                                   46                 64
          Deferred charges, net of accumulated amortization of
            $385 in 1997 and $800 in 1996                                                                   443                491
                                                                                                  ---------------------------------
          Total assets                                                                            $      73,896        $    78,651
                                                                                                  =================================

                        LIABILITIES AND PARTNERS' CAPITAL
          Liabilities:

          Accounts payable and accrued expenses                                                   $       1,047        $     1,505
          Due to affiliates                                                                               1,096              1,297
          Note payable                                                                                   39,965             40,284
          Lessee deposits and reserves for repairs                                                        7,425              7,552
                                                                                                  ---------------------------------
              Total liabilities                                                                          49,533             50,638

          Partners' capital:

          Limited partners (9,871,073 depositary units at
            March 31, 1997 and at December 31, 1996)                                                     24,363             28,013
          General Partner                                                                                    --                 --
                                                                                                  ---------------------------------
              Total partners' capital                                                                    24,363             28,013
                                                                                                  ---------------------------------
          Total liabilities and partners' capital                                                 $      73,896        $    78,651
                                                                                                  =================================

</TABLE>







                       See accompanying notes to financial
                                  statements.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)

                            STATEMENTS OF OPERATIONS
                (in thousands of dollars except per unit amounts)
<TABLE>
<CAPTION>

                                                                                             For the Three Months
                                                                                               Ended March 31,
                                                                                              1997           1996
                                                                                          ---------------------------

<S>                                                                                        <C>            <C>     
Revenues:

  Lease revenue                                                                            $   4,991      $  4,483
  Interest and other income                                                                       95           334
  Net gain on disposition of equipment                                                            90           834
                                                                                           --------------------------
    Total revenues                                                                             5,176         5,651

Expenses:

  Depreciation and amortization                                                                3,556         2,049
  Management fees to affiliate                                                                   293           201
  Repairs and maintenance                                                                      1,415           639
  Interest expense                                                                               796           881
  Other insurance expense                                                                         45            90
  Bad debt expense                                                                               (25 )         718
  Marine equipment operating expenses                                                              7            29
  General and administrative expenses
    to affiliates                                                                                182           148
  Other general and administrative
    expenses                                                                                     144           245
                                                                                           --------------------------
    Total expenses                                                                             6,413         5,000

Equity in net income (loss) of unconsolidated special purpose entities                           185           (68 )
                                                                                           --------------------------

    Net income (loss)                                                                      $  (1,052 )    $    583
                                                                                           ==========================

Partners' share of net income (loss) :

  Limited partners                                                                         $  (1,182 )    $    374
  General Partner                                                                                130           209
                                                                                           --------------------------
    Total                                                                                  $  (1,052 )    $    583
                                                                                           ==========================

Net income (loss) per weighted-average depositary unit
  (9,871,073 units at March 31, 1997 and
  9,879,664 units at March 31, 1996)                                                       $   (0.12 )    $   0.04
                                                                                           ==========================

Cash distributions                                                                         $   2,598      $  4,169
                                                                                           ==========================

Cash distributions per weighted-average depositary unit                                    $    0.25      $   0.40
                                                                                           ==========================

</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, 1995 to March 31, 1997
                            (in thousands of dollars)
<TABLE>
<CAPTION>


                                                         Limited          General
                                                         Partners         Partner            Total
                                                       ------------------------------------------------
   <S>                                                 <C>                <C>             <C>       
   Partners' capital at December 31, 1995              $   30,337         $    --         $   30,337

   Net income                                               9,162             598              9,760

   Repurchase of depositary units                            (120 )            --               (120 )

   Cash distributions                                     (11,366 )          (598 )          (11,964 )
                                                       -------------------------------------------------

   Partners' capital at December 31, 1996                  28,013              --             28,013

   Net income (loss)                                       (1,182 )           130             (1,052 )

   Cash distributions                                      (2,468 )          (130 )           (2,598 )
                                                       -------------------------------------------------

   Partners' capital at March 31, 1997                 $   24,363         $    --         $   24,363
                                                       =================================================
</TABLE>



























                       See accompanying notes to financial
                                  statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                             (thousands of dollars)
<TABLE>
<CAPTION>

                                                                                                     For the Three Months
                                                                                                       Ended March 31,
                                                                                                     1997            1996
                                                                                                 -----------------------------
   <S>                                                                                            <C>             <C>
   Cash flows from operating activities:
     Net (loss) income                                                                            $  (1,052 )     $     583 
     Adjustments to reconcile net (loss) income to net cash
       provided by operating activities:
       Depreciation and amortization                                                                  3,556           2,049
       Net gain on disposition of equipment                                                             (90 )          (834 )
       Equity in net (income) loss from unconsolidated special
         purpose entities                                                                              (185 )            68
     Changes in operating assets and liabilities:
       Accounts and note receivable, net                                                                 25             575
       Prepaid expenses                                                                                  18              31
       Restricted cash and marketable securities                                                        (77 )           (77 )
       Accounts payable and accrued expenses                                                           (458 )          (305 )
       Due to affiliates                                                                               (201 )           (54 )
       Lessee deposits and reserves for repairs                                                        (127 )           (74 )
                                                                                                  ----------------------------
   Net cash provided by operating activities                                                          1,409           1,962
                                                                                                  ----------------------------

   Investing activities:
     Payments for capitalized repairs                                                                    (5 )          (249 )
     Payments received on sales-type lease                                                               --             161
     Proceeds from disposition of equipment                                                             375           1,473
     Distributions from unconsolidated special
       purpose entities                                                                               1,751           1,646
                                                                                                  ----------------------------
                                                                                                  ----------------------------
   Net cash provided by investing activities                                                          2,121           3,031
                                                                                                  ----------------------------

   Financing activities:
     Cash distributions paid to General Partner                                                        (130 )          (209 )
     Cash distributions paid to limited partners                                                     (2,468 )        (3,960 )
     Repurchase of depositary units                                                                      --            (120 )
     Principal payments on notes payable                                                               (319 )        (1,249 )
                                                                                                  ----------------------------
   Net cash used in financing activities                                                             (2,917 )        (5,538 )
                                                                                                  ----------------------------

   Net increase (decrease) in cash and cash equivalents                                                 613            (545 )

   Cash and cash equivalents at beginning of period                                                   1,414           3,243
                                                                                                  ----------------------------

   Cash and cash equivalents at end of period                                                     $   2,027       $   2,698   
                                                                                                  ============================

   Supplemental information:
     Interest paid                                                                                $   1,016       $     815   
                                                                                                  ============================
</TABLE>




                       See accompanying notes to financial
                                  statements.


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1997


1.   Opinion of Management

In the opinion of the  management of PLM Financial  Services,  Inc.  (FSI),  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, 1997 and  December  31, 1996;  the  statements  of
operations  and cash flows for the three  months  ended March 31, 1997 and 1996;
and the  statement of changes in Partners'  capital for the period from December
31,  1995 to March  31,  1997.  Certain  information  and  footnote  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 for the year ended  December 31, 1996, on file at the
Securities and Exchange Commission.

2.   Reclassification

Certain  amounts in the 1996  financial  statements  have been  reclassified  to
conform to the 1997 presentation.

3.   Cash Distributions

Cash  distributions are recorded when paid and totaled $2.6 and $4.2 million for
the three months ended March 31, 1997 and 1996, respectively.

       Cash  distributions to unitholders in excess of net income are considered
to represent a return of capital.  Cash  distributions  to  unitholders  of $2.5
million and $3.6  million  during the three months ended March 31, 1997 and 1996
were deemed to be a return of capital.

       Cash  distributions  of $0.25 per depositary  unit were declared on April
25, 1997, and are to be paid on May 15, 1997 to the  unitholders of record as of
March 31, 1997. These cash distributions will amount to $2.6 million.

4.   Investments in Unconsolidated Special Purpose Entities

       The net investment in  unconsolidated  special purpose  entities  (USPEs)
includes  the  following   jointly-owned   equipment  (and  related  assets  and
liabilities) (in thousands):
<TABLE>
<CAPTION>

                                                                       March 31,       December 31,
%                               Equipment                               1997               1996
Ownership
-----------------------------------------------------------------------------------------------------
 <S>   <C>                                                          <C>                 <C>       
 56%   Marine vessel                                                $    3,756          $    3,999
 17%   Two trusts that own three commercial aircraft, two
         aircraft engines, and a portfolio of aircraft rotables          3,415               4,564
 17%   Trust that owns six commercial aircraft                           2,401               2,575
                                                                    ---------------------------------

         Investments in unconsolidated special purpose entities     $    9,572          $   11,138
                                                                    =================================

</TABLE>



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1997


5.   General Partner and Transactions with Affiliates

Partnership  management fees payable to an affiliate of the General Partner were
$1.1  million  and  $1.3  million  at March  31,  1997 and  December  31,  1996,
respectively. The Partnership's proportional share of USPE affiliated management
fees of $30,000 and $20,000  were  payable as of March 31, 1997 and December 31,
1996,  respectively.  The  Partnership's  proportional  share of USPE affiliated
management  fees  expense  during the three months ended March 31, 1997 and 1996
was $43,000 and $67,000,  respectively.  The Partnership's proportional share of
USPE data processing and  administrative  expenses to affiliates was $11,000 and
$35,000 during the three months ended March 31, 1997 and 1996, respectively. The
Partnership's  proportional  share of USPE marine  insurance  coverage,  paid to
Transportation  Equipment Indemnity Company,  Ltd. (TEI), was $27,000 during the
three months  ended March 31, 1997 and 1996.  TEI is an affiliate of the General
Partner.

6.    Equipment

Owned equipment held for operating leases is stated at cost.

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

                                                                 March 31,           December 31,
                                                                    1997                 1996
                                                               -------------------------------------
   <S>                                                          <C>                  <C>        
   Equipment held for operating leases:

   Rail equipment                                               $   34,909           $    35,733
   Marine containers                                                13,008                13,146
   Aircraft and aircraft engines                                    70,615                70,615
   Trailers                                                          7,510                 7,510
   Mobile offshore drilling unit                                     9,666                 9,666
                                                                ------------------------------------
                                                                   135,708               136,670
   Less accumulated depreciation                                   (81,433 )             (78,607 )
                                                                ------------------------------------
                                                                ====================================
   Net equipment                                                $   54,275           $    58,063
                                                                ====================================

</TABLE>

       As of March 31, 1997,  all  equipment in the  Partnership  portfolio  was
either  on  lease or  operating  in  PLM-affiliated  short-term  trailer  rental
facilities,  with the exception of 32 railcars and 28 marine  containers with an
aggregate carrying value of $0.3 million. As of December 31, 1996, all equipment
in the Partnership  portfolio was either on lease or operating in PLM-affiliated
short-term  rental  facilities,  with the  exception  of 1  aircraft,  32 marine
containers, and 67 railcars with an aggregate carrying value of $4.3 million.

       During the three  months ended March 31, 1997,  the  Partnership  sold or
disposed of marine  containers  and railcars with an aggregate net book value of
$0.3 million for  aggregate  proceeds of $0.4  million.  During the three months
ended March 31, 1996,  the  Partnership  sold or disposed of marine  containers,
railcars,  and  trailers  with an  aggregate  net book value of $0.6 million for
combined proceeds of $1.5 million.



<PAGE>


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

Results of Operations

Comparison of the Partnership's Operating Results for the Three Months 
Ended March 31, 1997 and 1996

(A) Owned Equipment Operations

Lease revenues less direct expenses  (repairs and maintenance,  marine equipment
operating expense,  and asset-specific  insurance) on owned equipment  decreased
for the quarter  ended March 31, 1997 when  compared to the same period of 1996.
The following table presents results by owned equipment type (in thousands):
<TABLE>
<CAPTION>

                                                     For the Three months
                                                        Ended March 31,
                                               ----------------------------------
                                                          1997              1996
                                               ----------------------------------
   <S>                                         <C>               <C>            
   Aircraft and aircraft engines               $           904   $         1,074
   Marine vessels                                           (4 )             395
   Trailers                                                400               411
   Rail equipment                                        1,533             1,465
   Marine containers                                       301               418
   Mobile offshore drilling unit                           398                --

</TABLE>

Aircraft: Aircraft lease revenues and direct expenses were $1.9 million and $1.0
million,  respectively,  for the quarter ended March 31, 1997,  compared to $1.1
million and $60,000, respectively,  during the same period of 1996. The decrease
in contribution was due to $1.0 million in repairs on one aircraft to prepare it
for sale or re-lease.

Marine  vessels:  Marine vessel lease revenues and direct expenses were zero and
$4,000,  respectively,  for the quarter  ended March 31, 1997,  compared to $0.5
million and $0.1  million,  respectively,  during the same  period of 1996.  The
decrease in contribution was due to the sale of all marine vessels during 1996.

Trailers:  Trailer  lease  revenues  and direct  expenses  were $0.5 million and
$66,000,  respectively,  for the quarter ended March 31, 1997,  compared to $0.5
million and $61,000, respectively,  during the same period of 1996. The decrease
in contribution  was due to higher repair and maintenance  expenses in the first
quarter of 1997, as compared to the same period of 1996;

Rail equipment: Railcar lease revenues and direct expenses were $1.9 million and
$0.3 million,  respectively,  for the quarter ended March 31, 1997,  compared to
$2.0 million and $0.5 million, respectively, during the same period of 1996. The
increase in railcar  contribution  resulted  from  running  repairs  required on
certain  railcars  in the fleet  during the first  quarter of 1996 that were not
needed during the first quarter of 1997;  this increase was offset by a decrease
in revenue due to the disposition of equipment during 1996.

Marine containers: Marine container lease revenues and direct expenses were $0.3
million and $3,000, respectively, for the quarter ended March 31, 1997, compared
to $0.4 million and $3,000,  respectively,  during the same period of 1996.  The
number of marine  containers  owned by the Partnership has been declining due to
sales and  dispositions.  The result of this  declining  fleet is a decrease  in
marine container contribution.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct  expenses  were $0.4  million and $7,000,  respectively,  for the quarter
ended March 31, 1997. The Partnership acquired and placed into lease service one
mobile offshore drilling unit in the third quarter of 1996.



<PAGE>


(B)  Indirect Operating Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $4.9  million for the quarter  ended March 31, 1997
increased  from $4.2  million  for the same  period  of 1996.  The  variance  is
explained as follows:

     (a) An increase of $1.5 million in depreciation  and  amortization  expense
from 1996 levels reflects the Partnership's  depreciation on equipment purchased
in 1996,  which was offset by the sale or  disposition  of  certain  Partnership
assets during the first quarter of 1997 and during 1996 and by the Partnership's
use of the double-declining balance method of depreciation;

     (b) An  increase  of $0.1  million in  management  fees  expense was due to
higher lease  revenues in the first quarter of 1997,  when compared to the first
quarter of 1996;

     (c) A decrease of $0.7 million in bad debt expense  primarily  reflects the
Partnership's evaluation of collectibility of certain receivable balances;

     (d) A decrease of $0.1  million in interest  expense was due to the paydown
of debt principal based on the sale of assets,  as required by the Partnership's
loan agreement;

     (e) A decrease of $0.1  million in general and  administrative  expense was
due to a decrease in accounting and administrative expenses.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the disposition of owned equipment for the first quarter of 1997
was $90,000,  resulting from the  disposition of marine  containers and railcars
with an aggregate net book value of $0.3 million for aggregate  proceeds of $0.4
million. The net gain of $0.8 million in the first quarter of 1996 resulted from
the  disposition  of marine  containers,  railcars,  and three  trailers with an
aggregate net book value of $0.7 million for aggregate proceeds of $1.5 million.

(D)  Interest and Other Income

Interest and other income  decreased by $0.2 million for the quarter ended March
31, 1997, compared to 1996, primarily because no finance lease income was earned
in the first  quarter of 1997,  as  compared  to $0.2  million of finance  lease
income earned in the first quarter of 1996.  The charterer  exercised his option
during the third  quarter of 1996 to buy the  marine  vessel  that was under the
finance lease.

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

Equity  in  net  income  (loss)  of  unconsolidated   special  purpose  entities
represents the net income (loss)  generated from the operation of  jointly-owned
assets accounted for under the equity method.
<TABLE>
<CAPTION>

                                                     For the Three Months
                                                        Ended March 31,
                                               ----------------------------------
                                                    1997              1996
                                               ----------------------------------
   <S>                                         <C>               <C>            
   Aircraft, aircraft engines and rotables     $           216   $            83
   Marine vessels                                          (31 )            (147 )
   Mobile offshore drilling unit                            --                (4 )
                                               =====================================
   Equity in net income (loss)                 $           185   $           (68 )
                                               =====================================

</TABLE>

Aircraft and aircraft engines and rotables:  The Partnership's share of aircraft
revenues and expenses was $0.7 million and $0.5 million,  respectively,  for the
quarter  ended  March 31,  1997,  compared  to $0.8  million  and $0.7  million,
respectively,  during  the same  period  of  1996.  As of March  31,  1997,  the
Partnership  had a partial  beneficial  interest in three  trusts that hold nine
commercial  aircraft,  two aircraft engines, and a package of aircraft rotables.
The increase in contribution was due to a lower  depreciation  expense,  and was
partially  offset  by a  decrease  in  revenue  due  to the  liquidation  of the
Partnership's  50% investment in an aircraft engine as the result of the General
Partner's sale of the asset in the third quarter of 1996.

Marine  vessels:  The  Partnership's  share of revenues  and  expenses of marine
vessels was $0.3 million and $0.4 million,  respectively,  for the quarter ended
March 31, 1997, compared to $0.4 million and $0.5 million, respectively, for the
same  period  in  1996.  The  decrease  in loss  was  due to  lower  repair  and
maintenance  expenses and lower marine operating  expenses for the quarter ended
March 31, 1997, when compared to the same period of 1996.

Mobile offshore drilling unit: The Partnership's  share of revenues and expenses
of the  mobile  offshore  drilling  unit was  $0.3  million  and  $0.3  million,
respectively,  for the first quarter of 1996. The Partnership liquidated its 45%
investment  in a mobile  offshore  drilling  unit during 1996 as a result of the
General Partner's sale of the asset.

(F) Net Income (Loss)

The  Partnership's  net  loss of  $1.1  million  in the  first  quarter  of 1997
decreased  from a net income of $0.6 million in the first  quarter of 1996.  The
Partnership's  ability to acquire,  operate, or liquidate assets; secure leases;
and re-lease those assets whose leases expire during the life of the Partnership
is subject to many factors.  Therefore,  the  Partnership's  performance for the
three  months  ended  March 31,  1997 is not  necessarily  indicative  of future
periods. In the first quarter of 1997, the Partnership  distributed $2.5 million
to the limited partners, or $0.25 per weighted-average depositary unit.



<PAGE>


     Financial Condition -- Capital Resources, Liquidity, and Distributions

The Partnership  purchased its initial  equipment  portfolio with capital raised
from its initial  equity  offering  and  permanent  debt  financing.  No further
capital  contributions  from original  partners are permitted under the terms of
the Partnership's Limited Partnership  Agreement.  In addition, the Partnership,
under its current loan agreement, does not have the capacity to incur additional
debt.  Therefore,  the  Partnership  relies on  operating  cash flow to meet its
operating  obligations,   maintain  working  capital  reserves,  and  make  cash
distributions to the limited partners.

     For the three  months  ended  March 31,  1997,  the  Partnership  generated
sufficient  operating  cash (net cash  provided by  operating  activities,  plus
distributions  from  unconsolidated   special  purpose  entities)  to  meet  its
operating obligations and maintain the current level of distributions (total for
three  months  ended  March  31,  1997 of  approximately  $2.6  million)  to the
partners. During the three months ended March 31, 1997, the General Partner sold
owned  equipment  on behalf of the  Partnership  and  realized  proceeds of $0.4
million.

     During the first quarter of 1997, the Partnership paid down $0.3 million of
the outstanding note balance as a result of asset sales.


Outlook for the Future

Since the  Partnership  is in its  holding or  passive  liquidation  phase,  the
General  Partner will be 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.

     The  Partnership  intends to use cash flow from  operations  to satisfy its
operating  requirements,  pay loan principal on debt,  maintain  working capital
reserves, and pay cash distributions to the investors.


                          PART II -- OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              Credit Agreement of $41,000,000 dated as of December 13, 1994 with
              First Union National Bank of North Carolina.

         (b)  Reports on Form 8-K

              None.



<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
                                          PARTNERSHIP
                                          By: PLM Financial Services, Inc.
                                              General Partner




Date:  May 13, 1997                       By: /s/ David Davis
                                              ---------------
                                              David J. Davis
                                              Vice President and
                                              Corporate Controller