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 September 30, 2000

     [ ]  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 ______








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

<TABLE>
<CAPTION>

                                                                                      September 30,          December 31,
                                                                                         2000                 1999
                                                                                    ------------------------------------


<S>                                                                                  <C>                  <C>
ASSETS

Equipment held for operating lease, at cost                                          $      61,983        $    84,191
Less accumulated depreciation                                                              (53,906)           (69,303)
                                                                                     ------------------------------------
  Net equipment                                                                              8,077             14,888

Cash and cash equivalents                                                                   12,276                486
Accounts receivable, net of allowance for doubtful
    accounts of $1,697 in 2000 and $1,757 in 1999                                              710                727
Investments in unconsolidated special-purpose entities                                         191              2,498
Deferred charges, net of accumulated
    amortization of $309 in 1999                                                                --                 31
Prepaid expenses and other assets                                                                9                 60
                                                                                     ------------------------------------

    Total assets                                                                     $      21,263        $    18,690
                                                                                     ====================================

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses                                                $         479        $       786
Due to affiliates                                                                              101                699
Lessee deposits and reserves for repairs                                                       158              1,419
Note payable                                                                                    --              7,458
                                                                                     ------------------------------------
  Total liabilities                                                                            738             10,362
                                                                                     ------------------------------------

Partners' capital:
Limited partners (9,871,073 depositary units as
    of September 30, 2000 and December 31, 1999)                                            20,525              8,328
General Partner                                                                                 --                 --
                                                                                     ------------------------------------
  Total partners' capital                                                                   20,525              8,328
                                                                                     ------------------------------------

    Total liabilities and partners' capital                                          $      21,263        $    18,690
                                                                                     ====================================
</TABLE>






                 See accompanying notes to financial statements.


                          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,
                                                                  2000            1999                2000            1999
                                                              -----------------------------        ---------------------------
<S>                                                            <C>             <C>                 <C>            <C>
REVENUES

Lease revenue                                                  $   2,962       $   3,852           $   9,130      $   11,664
Interest and other income                                             67              80                 109             194
Net gain on disposition of equipment                               9,635              12               9,680             478
                                                              -----------------------------        ---------------------------
  Total revenues                                                  12,664           3,944              18,919          12,336
                                                              -----------------------------        ---------------------------

EXPENSES

Depreciation and amortization                                      1,175           1,982               3,932           5,969
Repairs and maintenance                                              552             661               1,713           1,765
Equipment operating expenses                                           7             255                  23             640
Insurance expense                                                     32              74                 101             201
Management fees to affiliate                                         160             194                 510             626
Interest expense                                                      39             252                 306             813
General and administrative expenses to affiliates                     97             129                 301             378
Other general and administrative expenses                            224             210                 720             847
Loss on revaluation of equipment                                      11              --                 202              --
Provision for (recovery of) bad debts                                 36             407                 (69)            385
                                                              -----------------------------        ---------------------------
  Total expenses                                                   2,333           4,164               7,739          11,624
                                                              -----------------------------        ---------------------------

Minority interests                                                    --               4                  --              22
Equity in net income of unconsolidated
    special-purpose entities                                       1,102              --               1,017           1,477
                                                              -----------------------------        ---------------------------

    Net income (loss)                                          $  11,433       $    (216)          $  12,197           2,211
                                                              =============================        ===========================

PARTNERS' SHARE OF NET INCOME (LOSS)

Limited partners                                               $  11,433       $    (320)          $  12,197      $    1,899
General Partner                                                       --             104                  --             312
                                                              -----------------------------        ---------------------------

    Total                                                      $  11,433       $    (216)          $  12,197      $    2,211
                                                              =============================        ===========================

Limited partners' net income (loss) per weighted-
  average depositary unit                                      $    1.16       $   (0.03)          $    1.24      $     0.19
                                                              =============================        ===========================

Cash distribution                                              $      --       $   2,078           $      --      $    6,235
                                                              =============================        ===========================
Cash distribution per weighted-average
    depositary unit                                            $      --       $    0.20           $      --      $     0.60
                                                              =============================        ===========================
</TABLE>




                 See accompanying notes to financial statements.



                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
           For the Period from December 31, 1998 to September 30, 2000
                            (in thousands of dollars)


<TABLE>
<CAPTION>

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

<S>                                                    <C>                <C>             <C>
    Partners' capital as of December 31, 1998          $   12,082         $    --         $   12,082

  Net income                                                3,649             390              4,039

  Cash distribution                                        (7,403)           (390)            (7,793)
                                                       -------------------------------------------------

    Partners' capital as of December 31, 1999               8,328              --              8,328

  Net income                                               12,197              --             12,197

                                                       -------------------------------------------------
    Partners' capital as of September 30, 2000         $   20,525         $    --         $   20,525
                                                       =================================================
</TABLE>


                 See accompanying notes to financial statements.


                          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,
                                                                                                     2000            1999
                                                                                                 -----------------------------
<S>                                                                                              <C>             <C>
OPERATING ACTIVITIES

  Net income                                                                                     $   12,197      $    2,211
  Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                     3,932           5,969
    Loss on revaluation of equipment                                                                    202              --
    Net gain on disposition of equipment                                                             (9,680)           (478)
    Equity in net income from unconsolidated special-purpose entities                                (1,017)         (1,477)
    Changes in operating assets and liabilities:
      Accounts receivable, net                                                                           17             250
      Prepaid expenses and other assets                                                                  51              26
      Accounts payable and accrued expenses                                                            (307)           (652)
      Due to affiliates                                                                                   2               4
      Lessee deposits and reserves for repairs                                                       (1,261)            337
      Minority interests                                                                                 --            (224)
                                                                                                 -----------------------------
        Net cash provided by operating activities                                                     4,136           5,966
                                                                                                 -----------------------------

  INVESTING ACTIVITIES

  Payments for capitalized improvements                                                                 (78)            (19)
  Distributions from unconsolidated special-purpose entities                                            160              20
  Distributions from liquidation of unconsolidated special-purpose entities                           3,164           3,548
  Proceeds from disposition of equipment                                                             12,466             699
                                                                                                 -----------------------------
        Net cash provided by investing activities                                                    15,712           4,248
                                                                                                 -----------------------------

  FINANCING ACTIVITIES

  Principal payments on note payable                                                                 (7,458)         (7,472)
  Loans from affiliate                                                                                4,550             600
  Repayments of loans to affiliate                                                                   (5,150)             --
  Cash distributions paid to limited partners                                                            --          (5,923)
  Cash distributions paid to General Partner                                                             --            (312)
                                                                                                 -----------------------------
        Net cash used in financing activities                                                        (8,058)        (13,107)
                                                                                                 -----------------------------

  Net increase (decrease) in cash and cash equivalents                                               11,790          (2,893)
  Cash and cash equivalents at beginning of period                                                      486           3,429
                                                                                                 -----------------------------
  Cash and cash equivalents at end of period                                                     $   12,276      $      536
                                                                                                 =============================

  Supplemental information

  Interest paid                                                                                  $      316      $      813
                                                                                                 =============================

</TABLE>





                 See accompanying notes to financial statements.


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

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, 2000 and December 31, 1999,
     the  statements  of  operations  for the three months and nine months ended
     September 30, 2000 and 1999, the statements of changes in partners' capital
     for the period  from  December  31, 1998 to  September  30,  2000,  and the
     statements  of cash flows for the nine months ended  September 30, 2000 and
     1999.  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, 1999, on file
     at the Securities and Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

     The  Partnership,  in  accordance  with its limited  partnership  agreement
     entered its  liquidation  phase on January 1, 2000,  and has  commenced  an
     orderly liquidation of the Partnership's assets. The General Partner may no
     longer  purchase  additional  equipment.  All future cash flows and surplus
     funds, if any, are to be used for distributions to partners,  except to the
     extent used to maintain reasonable reserves.  During the liquidation phase,
     the  Partnership's  assets will continue to be recorded at the lower of the
     carrying  amount or fair  value  less  cost to sell.  The  General  Partner
     expects to file a certificate of  dissolution on behalf of the  Partnership
     with the  Secretary  of State for the State of  California  by December 31,
     2000, and following  completion of the liquidation of the  Partnership,  to
     file a certificate of cancellation.

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.  There
     were no cash  distributions  for the three and nine months ended  September
     30, 2000. For the nine months ended September 30, 1999, cash  distributions
     totaled $6.2 million.  For the three months ended  September 30, 1999, cash
     distributions  totaled  $2.1  million.  Cash  distributions  to the limited
     partners of $4.0 million for the nine months ended September 30, 1999, were
     deemed to be a return of capital.

     A special  distribution  of $10.9  million will be paid during  November of
     2000 from asset sales in the third quarter of 2000.

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

     The balance due to  affiliates  as of  September  30,  2000  included  $0.1
     million due to FSI and its affiliate for management fees and administrative
     services.  During the nine months ended September 30, 2000, the Partnership
     borrowed  $4.6 million  from FSI and repaid FSI of $5.2  million  including
     $0.6 million that was borrowed  during 1999.  The  Partnership  was charged
     market rate interest on the loans from FSI. Interest expense charged by FSI
     was $82,000 and $96,000 for the three and nine months ended  September  30,
     2000,  respectively.  The balance due to affiliates as of December 31, 1999
     includes $0.1 million due to FSI and its affiliates for management fees and
     $0.6 million due to FSI for a loan made to the Partnership.

     The  Partnership's  proportional  share of  unconsolidated  special purpose
     entities (USPE's)-affiliated  management fees, of $11,000 and $12,000, were
     payable as of September 30, 2000 and December 31, 1999, respectively.




                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

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 2000 and 1999 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,
                                                       2000           1999               2000            1999
                                                    --------------------------------------------------------------

<S>                                                 <C>            <C>                <C>              <C>
  Management fees                                   $       9      $      --          $     36         $    --
  Data processing and administrative
      expenses                                              3             --                 9               2
</TABLE>

5.   EQUIPMENT

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

                                                                 September 30,           December 31,
                                                                    2000                  1999
                                                               --------------------------------------

<S>                                                             <C>                    <C>
  Railcars                                                      $     33,217           $   33,572
  Aircraft                                                            21,843               42,000
  Marine containers                                                    3,495                4,453
  Trailers                                                             3,428                4,166
                                                                -------------------------------------
                                                                      61,983               84,191
  Less accumulated depreciation                                      (53,906)             (69,303)
                                                                -------------------------------------
      Net equipment                                             $      8,077           $   14,888
                                                                =====================================
</TABLE>

     As of September 30, 2000, all equipment in the Partnership portfolio was on
     lease,  except for 96 railcars,  and an aircraft.  As of December 31, 1999,
     all equipment in the Partnership portfolio was either on lease or operating
     in PLM-affiliated short-term rental facilities,  except for 40 railcars and
     an aircraft. The net book value of the equipment off lease was $0.8 million
     and  $1.2  million  as  of  September  30,  2000  and  December  31,  1999,
     respectively.

     Capital  improvements to the  Partnership's  equipment of $0.1 million were
     made during the nine months ended September 30, 2000. Capital  improvements
     to the Partnership's  equipment of $19,000 were made during the nine months
     ended September 30, 1999.

     During the nine months ended September 30, 2000, the  Partnership  disposed
     of marine containers,  trailers,  railcars,  and aircraft with an aggregate
     net book value of $2.8 million, for aggregate proceeds of $12.5 million.

     During the nine months ended September 30, 1999, the  Partnership  disposed
     of marine containers,  trailers,  and railcars,  with an aggregate net book
     value of $0.2 million, for aggregate proceeds of $0.7 million.




                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

6.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES

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

                                                                            September 30,         December 31,
                                                                               2000                  1999
                                                                          ----------------------------------

<S>                                                                        <C>                  <C>
56% interest in an entity that owned a marine vessel                       $      191           $   2,440
25% interest in a trust that owned four commercial aircraft                        --                  58
                                                                           ---------------------------------
    Net investments                                                        $      191           $   2,498
                                                                           =================================
</TABLE>

     During the nine months ended  September  30, 2000,  the  Partnership's  56%
     interest  in an entity  that  owned a marine  vessel was sold for a gain of
     $1.1 million.  As of December 31, 1999, all jointly-owned  equipment in the
     Partnership's USPE portfolio was on lease.

     For the nine months ended September 30, 2000, all  jointly-owned  equipment
     was  accounted  for under the  equity  method of  accounting.  For the nine
     months  ended  September  30,  1999,  jointly-owned  equipment of which the
     Partnership had a controlling  interest greater than 50%, was accounted for
     under the consolidation method of accounting.

7.   OPERATING SEGMENTS

     The Partnership  operates or operated in five different  segments:  railcar
     leasing, aircraft leasing, marine vessel leasing, marine container leasing,
     and trailer leasing.  Each equipment  leasing segment engages in short-term
     and mid-term operating leases to a variety of customers.

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

                                                                 Marine    Marine
                                           Railcar   Aircraft    Vessel   Container  Trailer   All
     For the quarter ended September 30,   Leasing   Leasing    Leasing   Leasing    Leasing   Other(1)     Total
     2000


<S>                                        <C>       <C>        <C>       <C>        <C>       <C>        <C>
     REVENUES
       Lease revenue                       $  1,584  $  1,227   $     --  $     15   $    136  $     --   $  2,962
       Interest income and other                  9         1         --        --         --        57         67
       Net gain on disposition of                68     9,460         --        23         84        --      9,635
       equipment
                                           ------------------------------------------------------------------------
         Total revenues                       1,661    10,688         --        38        220        57     12,664

     COSTS AND EXPENSES
       Operations support                       498        23         --         1         60         9        591
       Depreciation and amortization            403       696         --        17         60        (1)     1,175
       Interest expense                          --        --         --        --         --        39         39
       Management fees                          105        47         --        --          8        --        160
       General and administrative expenses       51        58         --         1         28       183        321
       Loss on revaluation of equipment          --        --         --        --         11        --         11
       Provision for bad debts                   36        --         --        --         --        --         36
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,093       824         --        19        167       230      2,333
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs        --        --      1,102        --         --        --      1,102
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    568  $  9,864   $  1,102  $     19   $     53  $   (173)  $ 11,433
                                           ========================================================================

     Total assets as of September 30, 2000 $  5,464  $  2,078   $    191  $    191   $  1,054  $ 12,285   $ 21,263
                                           ========================================================================
</TABLE>
     (1) Includes  revenues and costs not  identifiable to a particular  segment
     such as interest expense,  certain amortization expenses,  certain interest
     income and other, certain operations support and general and administrative
     expenses.


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

7.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                                 Marine                  Marine
                                           Railcar   Aircraft    Vessel       Trailer   Container  All
     For the quarter ended September 30,   Leasing   Leasing     Leasing      Leasing    Leasing   Other(1)    Total
     1999



<S>                                        <C>       <C>        <C>         <C>          <C>     <C>        <C>
     REVENUES
       Lease revenue                       $  1,691  $  1,399   $     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                       1,704     1,403         592        191         23        31      3,944

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

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

<TABLE>
<CAPTION>

                                                                 Marine    Marine
                                           Railcar   Aircraft    Vessel   Container  Trailer   All
     For the nine months ended September   Leasing   Leasing    Leasing   Leasing    Leasing   Other(1)       Total
     30, 2000


<S>                                        <C>       <C>        <C>         <C>        <C>       <C>        <C>

       Lease revenue                       $  4,972  $  3,654   $      --   $     68   $   436   $     --   $  9,130
       Interest income and other                 12         3          --         --        --         94        109
       Net gain (loss) on disposition of
         equipment                              106     9,460          --         36        78         --      9,680
                                           --------------------------------------------------------------------------
         Total revenues                       5,090    13,117          --        104       514         94     18,919

     COSTS AND EXPENSES
       Operations support                     1,411       231          --          2       164         29      1,837
       Depreciation and amortization          1,230     2,429          --         59       184         30      3,932
       Interest expense                          --        --          --         --        --        306        306
       Management fees                          345       138          --          3        24         --        510
       General and administrative expenses      160       151          --          1        75        634      1,021
       Loss on revaluation of equipment          --        --          --         --       202         --        202
       Recovery of bad debts                    (58)       --          --         --        (1)       (10)       (69)
                                           --------------------------------------------------------------------------
         Total costs and expenses             3,088     2,949          --         65       648        989      7,739
                                           --------------------------------------------------------------------------
     Equity in net income of USPEs               --        22         995         --        --         --      1,017
                                           --------------------------------------------------------------------------
     Net income (loss)                     $  2,002  $ 10,190   $     995   $     39   $  (134)  $   (895)  $ 12,197
                                           ==========================================================================

     Total assets as of September 30, 2000 $  5,464  $  2,078   $     191   $    191   $ 1,054   $ 12,069   $ 21,263
                                           ==========================================================================
</TABLE>
     (1) Includes  revenues and costs not  identifiable to a particular  segment
     such as interest expense,  certain amortization expenses,  certain interest
     income and other, certain operations support and general and administrative
     expenses.


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

7.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                                 Marine                  Marine
                                           Railcar   Aircraft    Vessel       Trailer   Container  All
     For the nine months ended September   Leasing   Leasing     Leasing      Leasing    Leasing   Other(1)   Total
     30, 1999                                                                                       Other1


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

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

     Total assets as of September 30, 1999 $  6,787  $  9,424   $   2,529   $  2,023     $  419  $    583   $ 21,765
                                           ==========================================================================
</TABLE>
     (1) Includes  revenues and costs not  identifiable to a particular  segment
     such as interest expense,  certain amortization expenses,  certain interest
     income and other, certain operations support and general and administrative
     expenses.

8.   DEBT

     During  the  first  nine  months  of  2000,  the  Partnership  paid off the
     outstanding note balance of $7.5 million.

9.   NET INCOME (LOSS) PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

     Net income  (loss) per  weighted-average  Partnership  unit was computed by
     dividing  net  income  (loss)  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,  2000 and 1999 was
     9,871,073.

10.  CONTINGENCIES

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





                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

11.  LIQUIDATION AND SPECIAL DISTRIBUTIONS

     On January 1, 2000, the General Partner began the liquidation  phase of the
     Partnership  with the  intent to  commence  an orderly  liquidation  of the
     Partnership assets. The General Partner is actively marketing the remaining
     equipment  portfolio with the intent of maximizing  sale proceeds.  As sale
     proceeds are received the General Partner  intends to periodically  declare
     special  distributions  to  distribute  the sale  proceeds to the partners.
     During the liquidation phase of the Partnership the equipment will continue
     to be leased under  operating  leases until sold.  Operating cash flows, to
     the  extent  they  exceed  Partnership   expenses,   will  continue  to  be
     distributed  on a quarterly  basis to partners.  The amounts  reflected for
     assets and liabilities of the Partnership have not been adjusted to reflect
     liquidation  values. The equipment portfolio continues to be carried at the
     lower of depreciated cost or fair value less cost to dispose.  Although the
     General  Partner   estimates  that  there  will  be   distributions   after
     liquidation  of assets and  liabilities,  the amounts  cannot be accurately
     determined  prior  to  actual  liquidation  of the  equipment.  Any  excess
     proceeds over expected  Partnership  obligations will be distributed to the
     Partners  throughout the liquidation  period.  Upon final liquidation,  the
     Partnership will be dissolved.

     The  Partnership  is not  permitted  to  reinvest  proceeds  from  sales or
     liquidations of equipment.  These proceeds,  in excess of operational  cash
     requirements,  are periodically paid out to limited partners in the form of
     special  distributions.  The sales and  liquidations  occur  because of the
     determination  by the General  Partner that it is the  appropriate  time to
     maximize the return on an asset  through  sale of that asset,  and, in some
     leases, the ability of the lessee to exercise purchase options.  No special
     distributions  were paid in the  first  nine  months  of 2000 and  1999.  A
     special distributions of $10.9 million will be paid during November of 2000
     from assets sales in the third quarter of 2000.







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, 2000 AND 1999

In September 1999, the General Partner amended the  corporate-by-laws of certain
unconsolidated special-purpose entities (USPEs) in which the Partnership, or any
affiliated  program,  owns an interest  greater than 50%.  The  amendment to the
corporate-by-laws  provided 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 (the Amendment). As such, although the Partnership may own a majority
interest in a USPE, the Partnership does not control its management and thus the
equity method of accounting  will be used after adoption of the Amendment.  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 USPEs.  Lease revenues and direct expenses
for jointly owned  equipment in which the Partnership  held a majority  interest
were reported under the consolidation  method of accounting during the three and
nine months ended  September 30, 1999 and were included with the owned equipment
operations.  For the three and nine  months  ended  September  30,  2000,  lease
revenues and direct  expenses for these  entities are reported  under the equity
method of accounting and are included with the operations of the USPEs.

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating and asset-specific  insurance  expenses) on owned equipment
decreased  during the three months ended September 30, 2000 when compared to the
same period of 1999.  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,
                                                 2000                1999
                                            ------------------------------------

  Aircraft                                 $         1,204    $         1,317
  Railcars                                           1,086              1,185
  Trailers                                              76                135
  Marine containers                                     14                 21
  Marine vessel                                         --                213

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.2 million and
$23,000,  respectively,  for the quarter ended  September 30, 2000,  compared to
$1.4  million and $0.1  million,  respectively,  during the same period of 1999.
Lease revenues  decreased  $0.2 million during the three months ended  September
30, 2000  compared to the same  period in 1999  primarily  due to the sale of an
aircraft during the fourth quarter of 1999.

Railcars: Railcars lease revenues and direct expenses were $1.6 million and $0.5
million,  respectively,  for the quarter ended  September 30, 2000,  compared to
$1.7 million and $0.5 million, respectively, during the same period of 1999. The
number  of  railcars  owned  by  the  Partnership  has  been  declining  due  to
dispositions.  The  result of this  declining  fleet is a  decrease  in  railcar
contribution.

Trailers:  Trailer lease revenues and direct expenses were $0.1 million and $0.1
million,  respectively,  for the quarter ended  September 30, 2000,  compared to
$0.2 million and $0.1 million, respectively, during the same period of 1999. The
number  of  trailers  owned  by  the  Partnership  has  been  declining  due  to
dispositions.  The  result of this  declining  fleet is a  decrease  in  trailer
contribution.

Marine  containers:  Marine  container  lease revenues and direct  expenses were
$15,000 and $1,000  respectively,  for the quarter  ended  September  30,  2000,
compared to $23,000 and  $2,000,  respectively,  during the same period of 1999.
The number of marine  containers owned by the Partnership has been declining due
to  dispositions.  The result of this  declining  fleet has been a  decrease  in
marine container contribution.

Marine vessel:  Marine vessel lease  revenues and direct  expenses were zero for
the quarter ended September 30, 2000,  compared to 0.5 million and $0.3 million,
respectively, for the same period of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting  impacted the reporting of lease revenues and direct  expenses for
one marine vessel.  As a result of the Amendment,  during the three months ended
September 30, 2000,  lease revenues  decreased $0.5 million and direct  expenses
decreased $0.3 million when compared to the same period of 1999.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $1.7 million for the quarter ended September 30, 2000
decreased from $3.2 million for the same period of 1999.  Significant  variances
are explained as follows:

     (i)  A decrease of $0.8 million in depreciation and  amortization  expenses
          from 1999  levels  reflects  a  decrease  of $0.6  million  due to the
          disposition  of certain  Partnership  assets  during 2000 and 1999.  A
          decrease of $0.2 million is the result of the Amendment  which changed
          the  accounting  method  used for  majority  held  equipment  from the
          consolidation method of accounting to the equity method of accounting.

     (ii) A  decrease  of $0.4 in bad  debt  expense  from  1999  was due to the
          General Partner's  evaluation of the collectability of receivables due
          from certain lessees.

     (iii)A  decrease  of $0.2  million  in  interest  expense  was due to lower
          average  debt  balances  outstanding  during  the three  months  ended
          September 30, 2000, compared to the same period in 1999.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the disposition of owned equipment for the third quarter of 2000
was $9.6 million, resulting from the disposition of marine containers, railcars,
trailers,  and aircraft,  with an aggregate net book value of $2.6 million,  for
aggregate  proceeds of $12.2 million.  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.

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

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

                                                For the Three Months
                                                 Ended September 30,
                                               2000              1999
                                          -------------------------------------

  Marine vessel                           $         1,102   $            --
                                          -------------------------------------
      Equity in net income of USPEs       $         1,102   $            --
                                          =====================================

Marine  vessel:  The  Partnership's  share of  revenues  and  expenses of marine
vessels was $1.3 million and $0.2 million,  respectively,  for the quarter ended
September 30, 2000, compared to zero for the same period of 1999.

During the nine months ended September 30, 2000, the  Partnership's 56% interest
in an entity  owing a marine  vessel  was sold for a gain of $1.1  million.  The
increase in marine vessel  revenues of $1.1 million was due to the gain from the
sale.  The  increase  in  marine  vessel  lease  revenues  of $0.2  million  and
depreciation  expense,  direct  expenses,  and  administrative  expenses of $0.2
million  during the three months  ended  September  30, 2000,  was caused by the
September 30, 1999 Amendment that changed the accounting method of majority held
equipment  from the  consolidation  method of accounting to the equity method of
accounting for one marine vessel.  The lease revenues and depreciation  expense,
direct  expenses,  and  administrative  expenses for the  majority  owned marine
vessel were reported under the  consolidation  method of accounting  under Owned
Equipment Operations during the three months ended September 30, 1999.

Aircraft,  aircraft  engines,  and  rotables:  As of  September  30,  2000,  the
Partnership had no remaining interests in entities that owned aircraft, aircraft
engines,  or rotables.  The  Partnership  sold these two trusts during the first
quarter of 1999.

(E)  Net Income (loss)

As a result of the foregoing,  the Partnership had a net income of $11.4 million
in the third quarter of 2000 compared to a net loss of $0.2 million in the third
quarter of 1999.  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, 2000 is not necessarily indicative of future periods.

COMPARISON  OF THE  PARTNERSHIP'S  OPERATING  RESULTS FOR THE NINE MONTHS  ENDED
SEPTEMBER 30, 2000 AND 1999

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating and asset-specific  insurance  expenses) on owned equipment
decreased  during the nine months ended  September 30, 2000 when compared to the
same period of 1999.  The following  table  presents  lease revenues less direct
expenses by segment (in thousands of dollars):

                                                  For the Nine Months
                                                  Ended September 30,
                                                2000              1999
                                           -------------------------------------

  Railcars                                 $         3,561   $         3,845
  Aircraft                                           3,423             4,126
  Trailers                                             272               364
  Marine containers                                     66                92
  Marine vessel                                         --               660

Railcars: Railcars lease revenues and direct expenses were $5.0 million and $1.4
million, respectively, for the nine months ended September 30, 2000, compared to
$5.2 million and $1.3 million, respectively, during the same period of 1999. The
decrease in lease revenues  resulted from  dispositions  of railcars during 2000
and 1999.  The increase in direct  expenses of $0.1 million was a result of more
repairs being required on rail equipment in the nine months ended  September 30,
2000 than was needed during the nine months ended September 30, 1999.

Aircraft: Aircraft lease revenues and direct expenses were $3.7 million and $0.2
million, respectively, for the nine months ended September 30, 2000, compared to
$4.4  million and $0.3  million,  respectively,  during the same period of 1999.
Lease revenues decreased $0.7 million during the nine months ended September 30,
2000  compared  to the  same  period  in 1999  primarily  due to the  sale of an
aircraft during the fourth quarter of 1999.

Trailers:  Trailer lease revenues and direct expenses were $0.4 million and $0.2
million, respectively, for the nine months ended September 30, 2000, compared to
$0.5 million and $0.2 million, respectively, during the same period of 1999. The
number  of  trailers  owned  by  the  Partnership  has  been  declining  due  to
dispositions.  The  result of this  declining  fleet is a  decrease  in  trailer
contribution.

Marine containers: Marine container lease revenues and direct expenses were $0.1
million and $2,000, respectively,  for the nine months ended September 30, 2000,
compared to $0.1  million and  $2,000,  respectively,  during the same period of
1999.  The  number  of  marine  containers  owned  by the  Partnership  has been
declining due to dispositions.  The result of this declining fleet is a decrease
in marine container contribution.

Marine vessel:  There were no marine vessel lease  revenues and direct  expenses
for the nine months ended September 30, 2000,  compared to $1.5 million and $0.8
million, respectively, during the same period of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting  impacted the reporting of lease revenues and direct  expenses for
one marine vessel.  As a result of the  Amendment,  during the nine months ended
September 30, 2000,  lease revenues  decreased $1.5 million and direct  expenses
decreased $0.8 million when compared to the same period of 1999.

(B)  Indirect Operating Expenses Related to Owned Equipment Operations

Total indirect  expenses of $5.9 million for the nine months ended September 30,
2000  decreased  from $9.0  million  for the same  period  of 1999.  Significant
variances are explained as follows:

     (i)  A decrease of $2.0 million in depreciation and  amortization  expenses
          from 1999 levels  reflects  the  decrease  of $1.4  million due to the
          disposition  of certain  Partnership  assets  during 2000 and 1999.  A
          decrease of $0.6 million was the result of the Amendment which changed
          the  accounting  method  used for  majority  held  equipment  from the
          consolidation method of accounting to the equity method of accounting.

     (ii) A  decrease  of $0.5  million  in  interest  expense  was due to lower
          average  debt  balances  outstanding  during  the  nine  months  ended
          September 30, 2000 when compared to the same period of 1999.

     (iii)A decrease of $0.5  million in bad debt  expense  from 1999 was due to
          the General Partner's  evaluation of the collectability of receivables
          due from certain lessees.

     (iv) A decrease of $0.2 million in general and administrative expenses from
          1999 levels was due to the reduction of the size of the  Partnership's
          equipment portfolio.

     (v)  A decrease of $0.1 million in management  fees to affiliate  from 1999
          levels was due to lower lease  revenues  during the nine months  ended
          September 30, 2000, compared to the same period of 1999.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of  equipment  was $9.7  million  for the nine
months  ended  September  30, 2000,  resulting  from the  disposition  of marine
containers, trailers, railcars, and aircraft with an aggregate net book value of
$2.8  million,  for  aggregate  proceeds of $12.5  million.  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.

(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,
                                                  2000              1999
                                             -----------------------------------

  Marine vessel                              $           997   $            --
  Aircraft, aircraft engines, and rotables                20             1,477
                                             -----------------------------------
      Equity in net income of USPEs          $         1,017   $         1,477
                                             ===================================

Marine vessel: The Partnership's  share of revenues and expenses from the marine
vessel was $1.8  million  and $0.8  million,  respectively,  for the nine months
ended September 30, 2000, compared to zero for the same period of 1999.

During the nine months ended September 30, 2000, the  Partnership's 56% interest
in an entity  owing a marine  vessel  was sold for a gain of $1.1  million.  The
increase in marine vessel  revenues of $1.1 million was due to the gain from the
sale.  The  increase  in  marine  vessel  lease  revenues  of $0.7  million  and
depreciation  expense,  direct  expenses,  and  administrative  expenses of $0.8
million  during the nine months  ended  September  30,  2000,  was caused by the
September 30, 1999 Amendment that changed the accounting method of majority held
equipment  from the  consolidation  method of accounting to the equity method of
accounting for one marine vessel.  The lease revenues and depreciation  expense,
direct  expenses,  and  administrative  expenses for the  majority  owned marine
vessel were reported under the  consolidation  method of accounting  under Owned
Equipment Operations during the nine months ended September 30, 1999.

Aircraft,  aircraft  engines,  and  rotables:  As of  September  30,  2000,  the
Partnership had no remaining interests in entities that owned aircraft, aircraft
engines, or rotables.  The Partnership's share of aircraft revenues and expenses
was $20,000 and zero,  respectively,  for the nine months  ended  September  30,
2000, compared to $1.6 million and $0.1 million,  respectively,  during the same
period of 1999.  The $20,000 of  aircraft  revenues  for the nine  months  ended
September  30, 2000  represented  interest  income  earned during the first nine
months of 2000 on  accounts  receivable.  The $1.6  million  in  revenue in 1999
represented  the gain from the sale of the  equipment  in two trusts  during the
first quarter of 1999.

(E)  Net Income

As a result of the foregoing,  the  Partnership  had net income of $12.2 million
for the nine months ended  September 30, 2000,  compared to a net income of $2.2
million in the same period of 1999.  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, 2000 is not necessarily indicative of future periods.

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

For the  nine  months  ended  September  30,  2000,  the  Partnership  generated
operating cash of $4.3 million (net cash provided by operating activities,  plus
non-liquidating distributions from USPEs) to meet its operating obligations.

During the nine months ended September 30, 2000, the Partnership sold wholly-and
partially-owned equipment received aggregate proceeds of $15.6 million.

During the nine months ended  September 30, 2000,  accounts  payable and accrued
expenses  decreased  $0.5  million.  A $0.2 million  decrease in trade  accounts
payable  was due to the  reduction  of the size of the  Partnership's  equipment
portfolio. A $0.3 million decrease in accrued expenses was due to the payment of
$0.3 million for repairs to an aircraft in the first nine months of 2000,  which
was  accrued at  December  31,  1999.  A similar  accrual  was not  required  on
September 30, 2000.

During the nine months ended  September 30, 2000,  due to  affiliates  decreased
$0.6 million.  During the nine months ended  September 30, 2000, the Partnership
borrowed  $4.6 million from FSI and repaid $5.2 million  including  $0.6 million
that was borrowed as of December 31, 1999.

During the nine months ended  September 30, 2000,  lessee  deposits and reserves
for repairs  decreased  $1.3  million.  A $0.9 million  decrease in reserves for
repairs  resulted  from the sale of two  aircraft.  A $0.4  million  decrease in
prepaid lease revenue was due to fewer lessees prepaying future lease revenue at
September 30, 2000 compared to December 31, 1999.

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

The amounts  reflected for assets and  liabilities of the  Partnership  have not
been adjusted to reflect  liquidation  values.  The equipment  portfolio that is
actively being marketed for sale by the General Partner  continues to be carried
at the lower of depreciated  cost or fair value less cost of disposal.  Although
the General Partner  estimates that there will be  distributions to the partners
after final disposal of assets and settlement of liabilities, the amounts cannot
be accurately determined prior to actual disposal of the equipment.

On April 18,  2000,  the General  Partner  for the  Partnership  announced  that
effective  immediately,  it will not recognize any further  transfers  involving
trading of units in this  partnership  for the  remainder  of the 2000  calendar
year. PLM Equipment Growth Fund III (hereafter referred to as "the Partnership")
is listed on the OTC Bulletin Board under the symbol GFZPZ.

In making the announcement,  the General Partner cited the Partnership's need to
continue to comply with Internal Revenue Service (IRS) Notice 88-75 and IRS Code
Section 7704, which contain safe harbor provisions  regarding the maximum number
of  partnership  units that can be traded  during a calendar year in order for a
partnership  not to be deemed a  publicly  traded  partnership  for  income  tax
purposes.  Transfers  for the  remainder  of the  year  may  only be  processed,
pursuant to IRS Code Section 7704,  through a qualified  matching  service.  The
General Partner will also continue to recognize transfers  specifically excluded
from the safe harbor  limitations,  referred to in the regulations as "transfers
not involving  trading," which includes  transfers at death,  transfers  between
family  members,   and  transfers  involving   distributions  from  a  qualified
retirement plan.

(III)    OUTLOOK FOR THE FUTURE

The Partnership  entered its  liquidation  phase on January 1, 2000. 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.

Several  factors  may  affect the  Partnership's  operating  performance  in the
remainder  of 2000,  including  changes  in the  markets  for the  Partnership's
equipment  and changes in the  regulatory  environment  in which that  equipment
operates.

Liquidation of the Partnership's equipment will cause 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 year
2000 include:

1.   One of the  Partnership's  aircraft has been off-lease for two years.  This
     Stage II  aircraft  required  extensive  repairs  and  maintenance  and the
     Partnership  has had  difficulty  selling the aircraft.  This aircraft will
     remain  off-lease until it is sold.  During the nine months ended September
     30,  2000,  the  Partnership  received a $0.1 million  refundable  security
     deposit from a potential buyer of the Partnership's Boeing 737-200 Stage II
     commercial aircraft.

2.   The cost of new marine  containers  has been at historic  lows for the past
     several years which has caused  downward  pressure on per diem lease rates.
     Recently,  the cost of marine containers have started to increase which, if
     this trend continues, should translate into rising per diem lease rates.

3.   According to the Association of American  Railroads,  railcar  loadings for
     the first nine  months of 2000 are 0.7% ahead of the railcar  loadings  for
     the same  period of 1999.  Some  commodity  groups are behind  last  year's
     loading  numbers.  While our  utilization  rates remain fairly high, we are
     experiencing  downward pressure on rental rates. This translates into lower
     contributions 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  unpredictability of these factors, or
of their  occurrence,  makes it  difficult  for the  General  Partner to clearly
define trends or influences that may impact the performance of the Partnership's
equipment.  The General Partner continually  monitors both the equipment markets
and the performance of the Partnership's equipment in these markets. The General
Partner  may  decide to reduce the  Partnership's  exposure  to those  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, maintain working
capital reserves, and pay cash distributions to the investors.

(IV)  FORWARD-LOOKING INFORMATION

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

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership's primary market risk exposure is currency devaluation risk.

During the nine months ended September 30, 2000, 81% 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.






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                          PART II -- OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              None.

         (b)  Reports on Form 8-K

              None.






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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:  November 7, 2000                         By: /s/ Richard K Brock
                                                    Richard K Brock
                                                    Vice President and
                                                    Chief Financial Officer