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, 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 ______




<PAGE>



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



<TABLE>
<CAPTION>
                                                                                                 March 31,         December 31,
                                                                                                  2000                 1999
                                                                                             ------------------------------------
         ASSETS

         <S>                                                                                  <C>                  <C>
         Equipment held for operating lease, at cost                                          $      83,495        $    84,191
         Less accumulated depreciation                                                              (70,115)           (69,303)
                                                                                              ------------------------------------
           Net equipment                                                                             13,380             14,888

         Cash and cash equivalents                                                                      265                486
         Accounts receivable, net of allowance for doubtful
             accounts of $1,714 in 2000 and $1,757 in 1999                                              824                727
         Investments in unconsolidated special-purpose entities                                       2,339              2,498
         Deferred charges, net of accumulated
             amortization of $324 in 2000 and $309 in 1999                                               15                 31
         Prepaid expenses and other assets                                                               42                 60
                                                                                              ------------------------------------

             Total assets                                                                     $      16,865        $    18,690
                                                                                              ====================================

         LIABILITIES AND PARTNERS' CAPITAL

         Liabilities:
         Accounts payable and accrued expenses                                                $         307        $       786
         Due to affiliates                                                                            2,466                699
         Lessee deposits and reserves for repairs                                                     1,482              1,419
         Note payable                                                                                 3,731              7,458
                                                                                              ------------------------------------
           Total liabilities                                                                          7,986             10,362
                                                                                              ------------------------------------

         Partners' capital:
         Limited partners (9,871,073 depositary units as
             of March 31, 2000 and December 31, 1999)                                                 8,851              8,328
         General Partner                                                                                 28                 --
                                                                                              ------------------------------------
           Total partners' capital                                                                    8,879              8,328
                                                                                              ------------------------------------

             Total liabilities and partners' capital                                          $      16,865        $    18,690
                                                                                              ====================================
</TABLE>













                 See accompanying notes to financial statements.

<PAGE>



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



                                                                                                     For the Three Months
                                                                                                        Ended March 31,
                                                                                                      2000            1999
                                                                                                   ---------------------------
REVENUES

<S>                                                                                                <C>            <C>
Lease revenue                                                                                      $   3,154      $    3,904
Interest and other income                                                                                 14              68
Net gain on disposition of equipment                                                                      37              13
                                                                                                   ---------------------------
  Total revenues                                                                                       3,205           3,985
                                                                                                   ---------------------------

EXPENSES

Depreciation and amortization                                                                          1,388           1,997
Repairs and maintenance                                                                                  455             482
Equipment operating expenses                                                                               8             196
Insurance expense                                                                                         35              80
Management fees to affiliate                                                                             179             218
Interest expense                                                                                         150             316
General and administrative expenses to affiliates                                                        113             133
Other general and administrative expenses                                                                297             366
Recovery of bad debts                                                                                    (43)             (9)
                                                                                                   ---------------------------
  Total expenses                                                                                       2,582           3,779
                                                                                                   ---------------------------

Minority interests                                                                                        --              20
Equity in net income (loss) of unconsolidated
    special-purpose entities                                                                             (72)          1,474
                                                                                                   ---------------------------

    Net income                                                                                     $     551      $    1,700
                                                                                                   ===========================

PARTNERS' SHARE OF NET INCOME

Limited partners                                                                                   $     523      $    1,596
General Partner                                                                                           28             104
                                                                                                   ---------------------------

    Total                                                                                          $     551      $    1,700
                                                                                                   ===========================

Net income per weighted-average depositary unit                                                    $    0.05      $     0.16
                                                                                                   ===========================

Cash distribution                                                                                  $      --      $    2,078
                                                                                                   ===========================

Cash distribution per weighted-average depositary unit                                             $      --      $     0.20
                                                                                                   ===========================

</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, 1998 TO MARCH 31, 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                                                  523              28                551
                                                       -------------------------------------------------
    Partners' capital as of March 31, 2000             $    8,851         $    28         $    8,879
                                                       =================================================
</TABLE>




































                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
<TABLE>
<CAPTION>
                                                                                                     For the Three Months
                                                                                                       Ended March 31,
                                                                                                     2000            1999
                                                                                                 -----------------------------
  OPERATING ACTIVITIES

  <S>                                                                                             <C>            <C>
  Net income                                                                                      $     551      $    1,700
  Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                     1,388           1,997
    Net gain on disposition of equipment                                                                (37)            (13)
    Equity in net loss (income) from unconsolidated special-purpose entities                             72          (1,474)
    Changes in operating assets and liabilities:
      Accounts receivable, net                                                                          (97)           (719)
      Prepaid expenses and other assets                                                                  18              (1)
      Accounts payable and accrued expenses                                                            (479)           (422)
      Due to affiliates                                                                                  17              17
      Lessee deposits and reserves for repairs                                                           63             201
      Minority interests                                                                                 --             (15)
                                                                                                  ---------------------------
       Net cash provided by operating activities                                                      1,496           1,271
                                                                                                  ---------------------------

  INVESTING ACTIVITIES

  Payments for capitalized improvements                                                                  --              (2)
  Distributions from (additional investments in) unconsolidated special-purpose                          87              (5)
      entities
  Distributions from liquidation of unconsolidated special-purpose entities                              --           3,547
  Proceeds from disposition of equipment                                                                173              88
  Due to affiliate                                                                                       --              35
                                                                                                  ---------------------------
        Net cash provided by investing activities                                                       260           3,663
                                                                                                  ---------------------------

  FINANCING ACTIVITIES

  Principal payments on note payable                                                                 (3,727)         (3,584)
  Payments on short-term loan from affiliate                                                           (600)             --
  Proceeds from short-term loan from affiliate                                                        2,350              --
  Cash distributions paid to limited partners                                                            --          (1,974)
  Cash distributions paid to General Partner                                                             --            (104)
                                                                                                  ---------------------------
        Net cash used in financing activities                                                        (1,977)         (5,662)
                                                                                                  ---------------------------

  Net decrease in cash and cash equivalents                                                            (221)           (728)
  Cash and cash equivalents at beginning of period                                                      486           3,429
                                                                                                  ---------------------------
  Cash and cash equivalents at end of period                                                      $     265      $    2,701
                                                                                                  ===========================

  SUPPLEMENTAL INFORMATION

  Interest paid                                                                                   $     147      $      316
                                                                                                  ===========================
</TABLE>






                 See accompanying notes to financial statements.

<PAGE>



                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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 March 31, 2000 and December 31, 1999, the
     statements  of income for the three  months  ended March 31, 2000 and 1999,
     the statements of changes in partners' capital for the period from December
     31, 1998 to March 31, 2000,  and the statements of cash flows for the three
     months  ended  March  31,  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
     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  Partnership  will
     terminate on December 31, 2000, unless terminated  earlier upon the sale of
     all  equipment  and by certain  other  events.  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
     anticipates that the liquidation of Partnership assets will be completed by
     the end of the year 2000.

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
     was no cash  distribution  for the three months ended March 31, 2000.  Cash
     distributions  were $2.1 million for the three months ended March 31, 1999.
     Cash  distributions  to  limited  partners  in  excess  of net  income  are
     considered to represent a return of capital.  Cash distributions to limited
     partners  of $0.4  million  for the three  months  ended March 31, 1999 was
     deemed to be a return of capital.

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

     The balance due to  affiliates  as of March 31, 2000  included $0.1 million
     due to FSI and its affiliate for  management  fees, and $2.4 million due to
     due  to  FSI  for a  loan  made  to the  Partnership.  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 USPE-affiliated management fees, of
     $16,000 and  $12,000,  were  payable as of March 31, 2000 and  December 31,
     1999, respectively.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2000

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

     The  Partnership's  proportional  share  of the  expenses  incurred  by the
     unconsolidated  special-purpose  entities during 2000 and 1999 is listed in
     the following table (in thousands of dollars):

                                                   For the Three Months
                                                      Ended March 31,
                                                   2000              1999
                                                ----------------------------
       Management fees                            $    10         $   --
       Data processing and administrative
           expenses                                     3              2

5.   Equipment

     The  components  of  owned  equipment  were as  follows  (in  thousands  of
     dollars):


                                       March 31,             December 31,
                                        2000                  1999
                                     --------------------------------------

  Aircraft                          $     42,000           $   42,000
  Railcars                                33,390               33,572
  Marine containers                        4,121                4,453
  Trailers                                 3,984                4,166
                                     --------------------------------------
                                          83,495               84,191
  Less accumulated depreciation          (70,115)             (69,303)
                                     -------------------------------------

      Net equipment                 $     13,380           $   14,888
                                    =====================================

     As of March 31, 2000, all equipment in the Partnership portfolio was either
     on  lease  or  operating  in  PLM-affiliated   short-term   trailer  rental
     facilities,  except for 58 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 $1.0  million and $1.2  million as of March 31, 2000 and  December  31,
     1999, respectively.

     No capital  improvements  were made during the three months ended March 31,
     2000.  Capital  improvements to the Partnership's  equipment of $2,000 were
     made during the three months ended March 31, 1999.

     During the three  months  ended March 31,  2000,  the  Partnership  sold or
     disposed of marine containers,  trailers,  and railcars,  with an aggregate
     net book value of $0.1 million, for aggregate proceeds of $0.2 million.

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


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2000

6.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES (USPES)

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


                                                                            March 31,          December 31,
                                                                               2000               1999
                                                                          ----------------------------------

<S>                                                                        <C>                  <C>
56% interest in an entity owning a marine vessel                           $    2,293           $   2,440
25% interest in a trust that owned four commercial aircraft                        46                  58
                                                                           ---------------------------------
    Net investments                                                        $    2,339           $   2,498
                                                                           =================================
</TABLE>


     As of March 31, 2000 and December 31, 1999, all jointly-owned  equipment in
     the Partnership's USPE portfolio was on lease.

     For the three months ended March 31, 2000, all jointly-owned  equipment was
     accounted for under the equity method of  accounting.  For the three months
     ended  March  31,  1999,  certain  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  primarily in five different  segments:  aircraft
     leasing,  railcar leasing,  marine container leasing,  trailer leasing, and
     marine vessel leasing. Each equipment leasing segment engages in short-term
     and mid-term  operating  leases to a variety of  customers.  The  following
     tables  present  a summary  of the  operating  segments  (in  thousands  of
     dollars):

<TABLE>
<CAPTION>

                                                                 Marine
                                           Aircraft  Railcar    Container Trailer    All
     For the quarter Ended March 31, 2000  Leasing   Leasing    Leasing   Leasing    Other<F1>1  Total
     ------------------------------------  -------   -------    -------   -------    ----        -----


     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  1,205  $  1,751   $     32  $    166   $     --  $  3,154
       Interest income and other                 --        --         --        --         14        14
       Net gain (loss) on disposition of
         equipment                               --        44          7       (14)        --        37
                                           -------------------------------------------------------------
         Total revenues                       1,205     1,795         39       152         14     3,205

     COSTS AND EXPENSES
       Operations support                        49       386         --        53         10       498
       Depreciation and amortization            867       420         23        63         15     1,388
       Interest expense                          --        --         --        --        150       150
       Management fees                           46       123          1         9         --       179
       General and administrative expenses       37        56          -        29        288       410
       Recovery of bad debts                     --       (42)        --        (1)        --       (43)
                                           -------------------------------------------------------------
         Total costs and expenses               999       943         24       153        463     2,582
                                           -------------------------------------------------------------
     Equity in net income (loss) of USPEs        22        --         --        --        (94)      (72)
                                           -------------------------------------------------------------
     Net income (loss)                     $    228  $    852   $     15  $     (1)  $   (543) $    551
                                           =============================================================

     Total assets as of March 31, 2000     $  6,329  $  6,039   $    334  $  1,547   $  2,616  $ 16,865
                                          =============================================================







<FN>
<F1>
--------------------------
1    Includes  revenues and costs not identifiable to a particular  segment such
     as interest expense, certain amortization expenses, certain interest income
     and other, operations support and general and administrative expenses. Also
     includes loss from an investment in an entity owning a marine vessel.
</FN>
</TABLE>


<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2000

7.   OPERATING SEGMENTS (CONTINUED)
<TABLE>
<CAPTION>


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

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

     COSTS AND EXPENSES
       Operations support                        94       350           258         --        46         10       758
       Depreciation and amortization          1,203       443           214         33        89         15     1,997
       Interest expense                          --        --            --         --        --        316       316
       Management fees                           62       121            23          2        10         --       218
       General and administrative expenses      192        66            15          2        25        199       499
       Provision for (recovery of) bad          (21)       46            --         --       (34)        --        (9)
        debts
                                           ---------------------------------------------------------------------------
         Total costs and expenses             1,530     1,026           510         37       136        540     3,779
                                           ---------------------------------------------------------------------------
       Minority interests                        --        --            20         --        --         --        20
     Equity in net income of USPEs            1,474        --            --         --        --         --     1,474
                                           ---------------------------------------------------------------------------
     Net income (loss)                     $  1,459  $    749   $       (31 ) $      2  $     (2 ) $   (477 )$  1,700
                                           ===========================================================================

     Total assets as of March 31, 1999     $ 12,484  $  7,783   $     5,232   $    555  $  2,143   $  3,169  $ 31,366
                                           ===========================================================================
<FN>
<F1>
--------------------------
1    Includes  revenues and costs not identifiable to a particular  segment such
     as interest expense, certain amortization expenses, certain interest income
     and other, operations support and general and administrative expenses.
</FN>
</TABLE>


8.   NET INCOME PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

     Net income per  weighted-average  Partnership unit was computed by dividing
     net income attributable to limited partners by the weighted-average  number
     of   Partnership   units  deemed   outstanding   during  the  period.   The
     weighted-average  number of Partnership units deemed outstanding during the
     three months ended March 31, 2000 and 1999 was 9,871,073.

9.   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 of an unfavorable outcome from the counterclaims is remote.

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










<PAGE>


                          PLM EQUIPMENT GROWTH FUND III
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2000

10.  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.

     No special  distributions  were paid in the first quarter of 2000 and 1999.
     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 certain
     damaged equipment,  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.

11.  SUBSEQUENT EVENT

     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 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.



<PAGE>



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

(I)  RESULTS OF OPERATIONS

COMPARISON OF PLM EQUIPMENT  GROWTH FUND III'S (THE  PARTNERSHIP'S)  OPERATING
RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 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
months  ended  March  31,  1999  and were  included  with  the  owned  equipment
operations. For the three months ended March 31, 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 March 31, 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 March 31,
                                               2000            1999
                                         -------------------------------

  Railcars                              $      1,365    $      1,408
  Aircraft                                     1,156           1,415
  Trailers                                       113              95
  Marine containers                               32              37
  Marine vessel                                   --             201

Railcars: Railcars lease revenues and direct expenses were $1.8 million and $0.4
million,  respectively,  for the  quarters  ended March 31,  2000 and 1999.  The
number of railcars owned by the  Partnership has been declining due to sales and
dispositions.  The  result of this  declining  fleet is a  decrease  in  railcar
contribution.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.2 million and
$49,000,  respectively,  for the quarter ended March 31, 2000,  compared to $1.5
million and $0.1 million,  respectively,  during the same period of 1999.  Lease
revenues  decreased  $0.3  million  during the three months ended March 31, 2000
when  compared to the same period in 1999 due to the sale of an aircraft  during
the fourth quarter of 1999.

Trailers:  Trailer lease revenues and direct expenses were $0.2 million and $0.1
million,  respectively,  for the quarter ended March 31, 2000,  compared to $0.1
million and $46,000, respectively,  during the same period of 1999. The increase
in lease revenues was due to higher utilization during the first quarter of 2000
compared to the same quarter of 1999.

Marine  containers:  Marine  container  lease revenues and direct  expenses were
$32,000 and $1,000, respectively, for the quarter ended March 31, 2000, compared
to $37,000 and $1,000, respectively,  during the same period of 1999. The number
of marine  containers  owned by the  Partnership has been declining due to sales
and  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  March 31,  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 of
one marine vessel.  As a result of the Amendment,  during the three months ended
March 31,  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 $2.1 million for the quarter ended March 31, 2000
decreased from $3.0 million for thesame period of 1999.  Significant variances
are explained as follows:

      (i) A decrease of $0.6 million in depreciation and  amortization  expenses
      from 1999 levels  reflects the decrease of $0.4 million due to the sale or
      disposition  of certain  Partnership  assets  during 2000 and 1999,  and a
      decrease of $0.2 million as a 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 $0.2  million in  interest  expense was due to a lower
      average  debt  outstanding  during the three  months ended March 31, 2000,
      compared to the same period in 1999.

      (iii) A $0.1 million decrease in administrative expenses was due to the
     reduction of the size of the Partnership's equipment portfolio.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the disposition of owned equipment for the first quarter of 2000
was $37,000, resulting from the disposition of marine containers,  railcars, and
trailers,  with an  aggregate  net book  value of $0.1  million,  for  aggregate
proceeds of $0.2 million. The net gain on the disposition of owned equipment for
the first quarter of 1999 was $13,000,  resulting from the disposition of marine
containers,  railcars,  and  trailers,  with an aggregate net book value of $0.1
million, for aggregate proceeds of $0.1 million.

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

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

                                                       For the Three Months
                                                         Ended March 31,
                                                         2000            1999
                                               --------------------------------

  Aircraft, aircraft engines, and rotables     $          22   $         1,474
  Marine vessel                                          (94)               --
                                               ================================
      Equity in net income (loss) of USPEs     $         (72)  $         1,474
                                               ================================

Aircraft,  aircraft engines, and rotables: As of March 31, 2000, the Partnership
had no remaining  interest in entities that own aircraft,  aircraft engines,  or
rotables.  The Partnership's share of aircraft revenues and expenses was $22,000
and zero,  respectively,  for the quarter ended March 31, 2000, compared to $1.6
million and $0.1  million,  respectively,  during the same  period of 1999.  The
$22,000  of  aircraft  revenues  for the  three  months  ended  March  31,  2000
represented  interest  income earned during the first quarter of 2000 on account
receivable.  The $1.6  million of aircraft  revenues  for the three months ended
March 31, 1999 was the gain from the sale of the  equipment in two trusts during
the first quarter of 1999.

Marine  vessel:  The  Partnership's  share of  revenues  and  expenses of marine
vessels was $0.2 million and $0.3 million,  respectively,  for the quarter ended
March 31, 2000, compared to zero for the same period of 1999.

The increase in marine  vessel lease  revenues of $0.2 million and  depreciation
expense, direct expenses, and administrative expenses of $0.3 million during the
three  months  ended  March 31,  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 March 31, 1999.

(E)  Net Income

As a result of the foregoing,  the  Partnership had a net income of $0.6 million
in the first quarter of 2000 compared to net income of $1.7 million in the first
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
March 31, 2000 is not  necessarily  indicative of future  periods.  In the first
quarter of 2000, the Partnership did not make any cash distributions.

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

For the three months ended March 31, 2000, the Partnership  generated  operating
cash  of  $1.6  million  (net  cash  provided  by  operating  activities,   plus
non-liquidating distributions from USPEs) to meet its operating obligations.

During  the three  months  ended  March 31,  2000,  the  Partnership  sold owned
equipment and received aggregate proceeds of $0.2 million.

During the first three months of 2000, the Partnership paid down $3.7 million of
the outstanding note balance from the proceeds of asset sales.

During the three  months  ended  March 31,  2000,  accounts  payable and accrued
expenses  decreased  $0.5  million  reflecting  a  decrease  of $0.2  million in
accounts  payable  trade 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 in the first  quarter of 2000 for repairs of an aircraft
which was accrued at December 31, 1999.

During the three months ended March 31, 2000,  due to affiliates  increased $1.8
million. During the first three months of 2000, the Partnership paid the General
Partner of $0.6 million for a loan borrowed  during the fourth  quarter of 1999.
Also, during the first three months of 2000, the Partnership borrowed a total of
$2.4  million  from  the  General  Partner.  The  General  Partner  charged  the
Partnership  market interest  rates.  Total interest paid to the General Partner
during the first quarter of 2000 was $14,000.

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

The Partnership is in its 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.



<PAGE>


(III) EFFECTS OF YEAR 2000

To date, the Partnership has not experienced any material Year 2000 (Y2K) issues
with  either  its  internally  developed  software  or  purchased  software.  In
addition, to date the Partnership has not been impacted by any Y2K problems that
may have impacted our customers and suppliers.  The General Partner continues to
monitor its systems for any potential Y2K issues.

(IV)  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. The General Partner  anticipates that
the  liquidation  of  Partnership  assets  will be  completed  by the  scheduled
termination of the Partnership at the end of the year 2000.

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

Liquidation  of the  Partnership's  equipment and its  investment in a USPE 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.   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.

2.   Depressed  economic  conditions in Asia have led to declining freight rates
     through 1999 for dry bulk marine vessels.  In the absence of new additional
     orders, the market would be expected to stabilize and improve over the next
     2-3 years.

3.   Railcar  loading in North  America  have  continued  to be high,  however a
     softening in the market is expected  during  2000,  which may lead to lower
     utilization  and lower  contribution  to the Partnership as existing leases
     expire and renewal leases are negotiated.

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.

(VI)  FORWARD-LOOKING INFORMATION

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



<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Partnership's  primary  market risk exposures are that of interest rate and
currency  devaluation  risk. The  Partnership's  note payable is a variable rate
debt.  The  Partnership  estimates  a one  percent  increase  or decrease in the
Partnership's  variable  rate debt  would  result in an  increase  or  decrease,
respectively,  in interest  expense of $9,000 in the second quarter of 2000. The
Partnership  estimates a two percent  increase or decrease in the  Partnership's
variable  rate debt would  result in an increase or decrease,  respectively,  in
interest  expense of $19,000 in the second  quarter of 2000. The note payable is
scheduled to be paid off in the second quarter of 2000.

During the first quarter of 2000, 80% of the Partnership's  total lease revenues
from wholly-and  partially-owned equipment came from non-United States domiciled
lessees.  Most of the  Partnership's  leases  require  payment in United  States
(U.S.) currency. If these lessees currency devalues against the U.S. dollar, the
lessees  could  potentially  encounter  difficulty  in  making  the U.S.  dollar
denominated lease payments.






















                      (this space intentionally left blank)










<PAGE>



                          PART II -- OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              None.

         (b)  Reports on Form 8-K

              None.





















                      (this space intentionally left blank)






<PAGE>




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



                                   PLM EQUIPMENT GROWTH FUND III

                                   By: PLM Financial Services, Inc.
                                       General Partner




Date:  May 9, 2000                 By: /s/ Richard K Brock
                                       ------------------------
                                       Richard K Brock
                                       Vice President and
                                       Chief Financial Officer