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




     [X]  Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934 For the fiscal quarter ended June 30, 1999

     [ ]  Transition  Report  Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 For the transition period from to

                         Commission file number 1-10813
                            _______________________

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


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

      One Market, Steuart Street Tower
        Suite 800, San Francisco, CA                            94105-1301
            (Address of principal                               (Zip code)
             executive offices)


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ______






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

<TABLE>
<CAPTION>


                                                                                                June 30,            December 31,
                                                                                                  1999                 1998
                                                                                             ------------------------------------
         ASSETS

<S>                                                                                           <C>                  <C>
         Equipment held for operating lease, at cost                                          $     108,492        $   109,680
         Less accumulated depreciation                                                              (84,213)           (81,298)
                                                                                              ------------------------------------
           Net equipment                                                                             24,279             28,382

         Cash and cash equivalents                                                                    3,380              3,429
         Accounts receivable, net of allowance for doubtful
             accounts of $1,447 in 1999 and $1,469 in 1998                                            2,028              1,328
         Investments in unconsolidated special-purpose entities                                          81              2,160
         Deferred charges, net of accumulated
             amortization of $466 in 1999 and $403 in 1998                                               78                141
         Prepaid expenses and other assets                                                               60                 72
                                                                                              ------------------------------------

             Total assets                                                                     $      29,906        $    35,512
                                                                                              ====================================

         LIABILITIES AND PARTNERS' CAPITAL

         Liabilities:
         Accounts payable and accrued expenses                                                $         796        $     1,369
         Due to affiliates                                                                              198                168
         Lessee deposits and reserves for repairs                                                     1,482              1,142
         Note payable                                                                                14,956             18,540
                                                                                              ------------------------------------
           Total liabilities                                                                         17,432             21,219
                                                                                              ------------------------------------

         Minority interests                                                                           2,122              2,211

         Partners' capital:
         Limited partners (9,871,073 depositary units as
             of June 30, 1999 and December 31, 1998)                                                 10,352             12,082
         General Partner                                                                                 --                 --
                                                                                              ------------------------------------
           Total partners' capital                                                                   10,352             12,082
                                                                                              ------------------------------------

             Total liabilities and partners' capital                                          $      29,906        $    35,512
                                                                                              ====================================
</TABLE>




                 See accompanying notes to financial statements.



                          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                 For the Six Months
                                                                    Ended June 30,                      Ended June 30,
                                                                  1999            1998                1999            1998
                                                               ----------------------------        ---------------------------


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

Lease revenue                                                  $   3,908       $   4,958           $   7,812      $    9,725
Interest and other income                                             46              56                 114             114
Net gain on disposition of equipment                                 453           3,734                 466           3,725
                                                               ----------------------------        ---------------------------
  Total revenues                                                   4,407           8,748               8,392          13,564
                                                               ----------------------------        ---------------------------

Expenses

Depreciation and amortization                                      1,990           2,668               3,987           5,321
Repairs and maintenance                                              608             809               1,090           1,455
Equipment operating expenses                                         203             283                 399             520
Insurance expense to affiliate                                        --             (24)                 11             (20)
Other insurance expense                                               48             122                 117             231
Management fees to affiliate                                         214             299                 432             565
Interest expense                                                     245             514                 561           1,043
General and administrative expenses to affiliates                    116             149                 249             313
Other general and administrative expenses                            271             221                 637             358
Recovery of bad debts                                                (13)           (491)                (22)           (364)
                                                              ----------------------------        ---------------------------
  Total expenses                                                   3,682           4,550               7,461           9,422
                                                              ----------------------------        ---------------------------

Minority interests                                                    (2)              3                  19              66
Equity in net income (loss) of unconsolidated
    special-purpose entities                                           4             (30)              1,477              43
                                                              -----------------------------        ---------------------------

    Net income                                                 $     727       $   4,171           $   2,427           4,251
                                                              =============================        ===========================

PARTNERS' SHARE OF NET INCOME

Limited partners                                               $     623       $   4,041           $   2,219      $    3,991
General Partner                                                      104             130                 208             260
                                                              -----------------------------        ---------------------------

    Total                                                      $     727       $   4,171           $   2,427      $    4,251
                                                              =============================        ===========================

Net income per weighted-average depositary unit                $    0.06       $    0.41           $    0.22      $     0.40
                                                              =============================        ===========================

Cash distribution                                              $   2,079       $   2,607           $   4,157      $    5,204
                                                              =============================        ===========================
Cash distribution per weighted-average
    depositary unit                                            $    0.20       $    0.25           $    0.40      $     0.50
                                                              =============================        ===========================

</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, 1997 to June 30, 1999
                            (in thousands of dollars)

<TABLE>
<CAPTION>


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

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

  Net income                                                2,397             520              2,917

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

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

  Net income                                                2,219             208              2,427

  Cash distribution                                        (3,949)           (208)            (4,157)
                                                       -------------------------------------------------

    Partners' capital as of June 30, 1999              $   10,352         $    --         $   10,352
                                                       =================================================

</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 Six Months
                                                                                                        Ended June 30,
                                                                                                     1999            1998
                                                                                                 -----------------------------


<S>                                                                                              <C>              <C>
  OPERATING ACTIVITIES

  Net income                                                                                     $     2,427      $    4,251
  Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
    Depreciation and amortization                                                                     3,987           5,321
    Net gain on disposition of equipment                                                               (466)         (3,725)
    Equity in net income from unconsolidated special-purpose entities                                (1,477)            (43)
    Changes in operating assets and liabilities:
      Accounts receivable, net                                                                         (687)            (66)
      Prepaid expenses and other assets                                                                  12             (20)
      Accounts payable and accrued expenses                                                            (573)           (290)
      Due to affiliates                                                                                  30          (2,072)
      Lessee deposits and reserves for repairs                                                          340            (149)
      Minority interests                                                                                (89)            (42)
                                                                                                  ----------------------------
        Net cash provided by operating activities                                                     3,504           3,165
                                                                                                  ----------------------------

  INVESTING ACTIVITIES

  Payments for capitalized improvements                                                                  (2)            (34)
  Payments for capitalized improvements in unconsolidated special-purpose entity                         --          (1,198)
  Distributions from unconsolidated special-purpose entities                                              8           2,347
  Distributions from liquidation of unconsolidated special-purpose entity                             3,548              --
  Proceeds from disposition of equipment                                                                634          11,461
                                                                                                  ----------------------------
        Net cash provided by investing activities                                                     4,188          12,576
                                                                                                  ----------------------------

  FINANCING ACTIVITIES

  Principal payments on note payable                                                                 (3,584)        (10,750)
  Due from affiliates                                                                                    --          (1,556)
  Cash distributions paid to limited partners                                                        (3,949)         (4,944)
  Cash distributions paid to General Partner                                                           (208)           (260)
                                                                                                  ----------------------------
        Net cash used in financing activities                                                        (7,741)        (17,510)
                                                                                                  ----------------------------

  Net decrease in cash and cash equivalents                                                             (49)         (1,769)
  Cash and cash equivalents at beginning of period                                                    3,429           4,239
                                                                                                  ----------------------------
  Cash and cash equivalents at end of period                                                      $   3,380      $    2,470
                                                                                                  ============================

  SUPPLEMENTAL INFORMATION

  Interest paid                                                                                   $     561      $    1,049
                                                                                                  ============================

</TABLE>



                 See accompanying notes to financial statements.



                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

1.   OPINION OF MANAGEMENT

     In the opinion of the  management of PLM Financial  Services,  Inc. (FSI or
     the General  Partner),  the  accompanying  unaudited  financial  statements
     contain all adjustments necessary, consisting primarily of normal recurring
     accruals,  to present fairly the financial position of PLM Equipment Growth
     Fund III (the  Partnership)  as of June 30, 1999 and December 31, 1998, the
     statements  of income for the three  months  and six months  ended June 30,
     1999 and 1998,  the  statements  of changes in  partners'  capital  for the
     period from December 31, 1997 to June 30, 1999,  and the statements of cash
     flows for the six months ended June 30, 1999 and 1998. Certain  information
     and note disclosures  normally included in financial statements prepared in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed  or  omitted  from the  accompanying  financial  statements.  For
     further  information,  reference should be made to the financial statements
     and notes  thereto  included  in the  Partnership's  Annual  Report on Form
     10-K/A for the year ended  December 31, 1998, on file at the Securities and
     Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

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

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

3.   CASH DISTRIBUTIONS

     Cash distributions are recorded when paid and may include amounts in excess
     of net income that are considered to represent a return of capital. For the
     six months ended June 30, 1999 and 1998,  cash  distributions  totaled $4.2
     million and $5.2 million, respectively. For the three months ended June 30,
     1999 and 1998,  cash  distributions  totaled $2.1 million and $2.6 million,
     respectively.  Cash  distributions  to the limited partners of $1.7 million
     and  $1.0  million  for the six  months  ended  June  30,  1999  and  1998,
     respectively, were deemed to be a return of capital.

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

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

     The balance due to  affiliates  as of June 30, 1999 and  December  31, 1998
     included $0.2 million due to FSI and its affiliate for management fees.

     The Partnership's proportional share of USPE-affiliated management fees, of
     $2,000 and $3,000,  were payable as of June 30, 1999 and December 31, 1998,
     respectively.


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

4.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

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

<TABLE>
<CAPTION>
                                                       For the Three Months               For the Six Months
                                                          Ended June 30,                    Ended June 30,
                                                       1999           1998               1999            1998
                                                    --------------------------------------------------------------

<S>                                                 <C>            <C>                <C>             <C>
  Management fees                                   $      --      $      14          $     --        $     27
  Data processing and administrative
      expenses                                             --              8                 2              18
</TABLE>

5.   EQUIPMENT

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

<TABLE>
<CAPTION>
                                                                    June 30,             December 31,
                                                                    1999                  1998
                                                               --------------------------------------

<S>                                                             <C>                    <C>
  Aircraft                                                      $     52,028           $   52,028
  Railcars                                                            33,612               33,999
  Marine Vessel                                                       12,790               12,790
  Trailers                                                             5,137                5,257
  Marine containers                                                    4,925                5,606
                                                                -------------------------------------
                                                                     108,492              109,680
  Less accumulated depreciation                                      (84,213)             (81,298)
                                                                -------------------------------------
                                                                =====================================
      Net equipment                                             $     24,279           $   28,382
                                                                =====================================
</TABLE>

     As of June 30, 1999, all equipment in the Partnership  portfolio was either
     on  lease  or  operating  in  PLM-affiliated   short-term   trailer  rental
     facilities,  except for 79 railcars, 21 marine containers, and an aircraft.
     As of December 31, 1998,  all  equipment in the  Partnership  portfolio was
     either  on  lease  or  operating  in   PLM-affiliated   short-term   rental
     facilities,  except for 69 railcars, 25 marine containers, and an aircraft.
     The net book value of the  equipment  off lease was $2.1  million  and $2.4
     million as of June 30, 1999 and December 31, 1998, respectively.

     Capital  improvements to the Partnership's  equipment of $2,000 and $34,000
     were made  during the six months  ended  June 30,  1999 and June 30,  1998,
     respectively.

     During the six months ended June 30, 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 $0.6 million.

     During the six months ended June 30, 1998, the Partnership sold or disposed
     of marine containers,  trailers,  railcars,  and a mobile offshore drilling
     unit,  with an  aggregate  net book value of $7.8  million,  for  aggregate
     proceeds of $11.5 million.



                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

6.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES

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

                                                                                   June 30,           December 31,
                                                                                   1999               1998
                                                                              ---------------------------------

<S>                                                                            <C>                 <C>
25% interest in a trust that owned four commercial aircraft                    $       81          $      106
17% interest in two trusts that owned three commercial aircraft, two
        aircraft engines, and a portfolio of rotable components                        --               2,054
                                                                               ---------------------------------

    Net investments                                                            $       81          $    2,160
                                                                               =================================
</TABLE>

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

7.   OPERATING SEGMENTS

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

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

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



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

       Lease revenue                       $  1,509  $  1,712   $       471   $    182  $     34   $     --  $  3,908
       Interest income and other                  5        --            --         --        --         41        46
       Net gain on disposition of
         equipment                               --       353            --          1        99         --       453
                                           ---------------------------------------------------------------------------
         Total revenues                       1,514     2,065           471        183       133         41     4,407

     COSTS AND EXPENSES
       Operations support                       115       459           226         48         1         10       859
       Depreciation and amortization          1,202       442           214         88        29         15     1,990
       Interest expense                          --        --            --         --        --        245       245
       Management fees                           61       118            23         10         2         --       214
       General and administrative expenses      142        57             8         30         1        149       387
       (Recovery of) provision for bad           --       (16)           --          3        --         --       (13)
     debts
                                           ---------------------------------------------------------------------------
         Total costs and expenses             1,520     1,060           471        179        33        419     3,682
                                           ---------------------------------------------------------------------------
       Minority interests                        --        --            (2)        --        --         --        (2)
     Equity in net income (loss) of USPEs         4        --            --         --        --         --         4
                                           ---------------------------------------------------------------------------
                                           ===========================================================================
     Net income (loss)                     $     (2) $  1,005   $        (2)  $      4  $    100   $   (378) $    727
                                           ===========================================================================

     Total assets as of June 30, 1999      $ 11,214  $  7,230   $     5,154   $  2,058  $    481   $  3,769  $ 29,906
                                           ===========================================================================

<FN>
     <F1> 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>


                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

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


                                                                 Marine                  Marine
                                           Aircraft  Railcar     Vessel       Trailer   Container    MODU    All
     For the quarter ended June 30, 1998   Leasing   Leasing     Leasing      Leasing   Leasing    Leasing   Other<F1>  Total
                                                                                                              Other1


<S>                                        <C>       <C>        <C>         <C>         <C>      <C>        <C>       <C>
     REVENUE
       Lease revenue                       $  1,736  $  1,826   $     683   $    312    $   50   $    351   $     --  $  4,958
       Interest income and other                  3        --          --         --        --         --         53        56
       Net gain (loss) on disposition of
         equipment                               --       142          --        (57)       30      3,619         --     3,734
                                           ------------------------------------------------------------------------------------
         Total revenues                       1,739     1,968         683        255        80      3,970         53     8,748

     COSTS AND EXPENSES
       Operations support                        19       669         410         67         2          9         14     1,190
       Depreciation and amortization          1,506       461         256        129        54        205         57     2,668
       Interest expense                          --        --          --         --        --         --        514       514
       Management fees                          101       124          34         20         2         18         --       299
       General and administrative expenses       48        72          18         45         1         --        186       370
       (Recovery of) provision for bad         (483)      (18)         --         10        11         --        (11)     (491)
       debts
                                           ------------------------------------------------------------------------------------
         Total costs and expenses             1,191     1,308         718        271        70        232        760     4,550
                                           ------------------------------------------------------------------------------------
       Minority interests                        --        --           3         --        --         --         --         3
     Equity in net loss of USPEs                (30)       --          --         --        --         --         --       (30)
                                           ------------------------------------------------------------------------------------
                                           ====================================================================================
     Net income (loss)                     $    518  $    660   $     (32)  $    (16)   $   10   $  3,738   $   (707) $  4,171
                                           ====================================================================================

     Total assets as of June 30, 1998      $ 20,194  $  9,033   $   5,748   $  2,731    $1,117   $     --   $  3,316  $ 42,139
                                           ====================================================================================
<FN>
   <F1> Includes  revenues and costs not identifiable to a particular  segment
     such as interest expense,  certain amortization expenses,  certain interest
     income  and  other,  operations  support  and  general  and  administrative
     expenses.
</FN>
</TABLE>

<TABLE>
<CAPTION>


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

     REVENUES
<S>                                        <C>       <C>           <C>        <C>      <C>       <C>        <C>
       Lease revenue                       $  3,019     3,469         930        323        71         --      7,812
       Interest income and other                 10        --          --         --        --        104        114
       Net gain (loss) on disposition of
         equipment                                2       370          --         (6)      100         --        466
                                           --------------------------------------------------------------------------
         Total revenues                       3,031     3,839         930        317       171        104      8,392

     COSTS AND EXPENSES
       Operations support                       209       809         484         94         1         20      1,617
       Depreciation and amortization          2,405       885         428        177        62         30      3,987
       Interest expense                          --        --          --         --        --        561        561
       Management fees                          124       240          46         19         3         --        432
       General and administrative expenses      333       123          23         56         4        347        886
       (Recovery of) provision for bad          (20)       29          --        (31)       --         --        (22)
       debts
                                           --------------------------------------------------------------------------
         Total costs and expenses             3,051     2,086         981        315        70        958      7,461
                                           --------------------------------------------------------------------------
       Minority interests                        --        --          19         --        --         --         19
     Equity in net income (loss) of USPEs     1,477        --          --         --        --         --      1,477
                                           --------------------------------------------------------------------------
                                           ==========================================================================
     Net income (loss)                     $  1,457     1,753         (32)         2       101       (854)     2,427
                                           ==========================================================================

     Total assets as of June 30, 1999      $ 11,214  $  7,230   $   5,154   $  2,058   $   481   $  3,769   $ 29,906
                                           ==========================================================================

<FN>

     <F1> 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>

                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

7.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                 Marine                  Marine
                                           Aircraft  Railcar     Vessel       Trailer   Container    MODU    All
     For the six months ended June 30,     Leasing   Leasing     Leasing      Leasing   Leasing    Leasing   Other<F1>  Total
     1998


<S>                                        <C>       <C>        <C>         <C>        <C>       <C>        <C>       <C>
     REVENUES
       Lease revenue                       $  3,348     3,656       1,168        630       167        756         --     9,725
       Interest income and other                  6        --          --         --        --         --        108       114
       Net gain (loss) on disposition of
         equipment                              (14 )     158          --        (70)       32      3,619         --     3,725
                                           ------------------------------------------------------------------------------------
         Total revenues                       3,340     3,814       1,168        560       199      4,375        108    13,564

     COSTS AND EXPENSES
       Operations support                        74     1,188         754        120         3         19         28     2,186
       Depreciation and amortization          2,868       928         514        270       150        512         79     5,321
       Interest expense                          --        --          --         --        --         --      1,043     1,043
       Management fees                          170       251          58         40         8         38         --       565
       General and administrative expenses       60       140          62         98         3         --        308       671
       (Recovery of) provision for bad         (358)      (15)         --          9        --         --         --      (364)
     debts
                                           --------------------------------------------------------------------------------------
         Total costs and expenses             2,814     2,492       1,388        537       164        569      1,458     9,422
                                           --------------------------------------------------------------------------------------
       Minority interests                        --        --          66         --        --         --         --        66
     Equity in net income (loss) of USPEs        43        --          --         --        --         --         --        43
                                           ------------------------------------------------------------------------------------
                                           ====================================================================================
     Net income (loss)                     $    569     1,322        (154)        23        35      3,806     (1,350)    4,251
                                           ====================================================================================

     Total assets as of June 30, 1998      $ 20,194  $  9,033   $   5,748   $  2,731   $ 1,117   $     --   $  6,366  $ 42,139
                                           ====================================================================================

<FN>
     <F1> 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>


8.   DEBT

     During the first six months of 1999, the Partnership repaid $3.6 million of
     the outstanding note balance from the proceeds of asset sales.

9.   NET INCOME PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

     Net income per  weighted-average  Partnership unit was computed by dividing
     net income attributable to limited partners by the weighted-average  number
     of   Partnership   units  deemed   outstanding   during  the  period.   The
     weighted-average  number of Partnership units deemed outstanding during the
     three and six months ended June 30, 1999 and 1998 was 9,871,073.

10.  Contingencies

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

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

                          PLM EQUIPMENT GROWTH FUND III
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999

11.  RESTATEMENT

     The financial statements have been restated to reflect the consolidation of
     the Fund's majority  interests in greater than 50% owned USPE's  previously
     reported under the equity method of accounting for the three and six months
     ending June 30, 1999 and 1998.

     As a result of the  consolidation,  total assets,  total  liabilities,  and
     minority  interests  changed as of June 30, 1999 and  December  31, 1998 as
     follows:

                                             1999                          1998
                           As              Amended       As              Amended
                           reported                      reported
                        ---------------------------   --------------------------
     Total assets           $27,453         $29,906       $33,068        $35,512
     Total liabilities       17,101          17,432        20,986         21,219
     Minority interests          --           2,122            --          2,211


     Additionally,  as a result  of the  consolidation,  total  revenues,  total
     expenses,  and equity in net income of USPEs  changed for the three and six
     months ended June 30, 1999 and 1998 as follows:

<TABLE>
<CAPTION>

                               For the three months ended June 30,               For the six months ended June 30,
                                1999                      1998                       1999                  1998
                          As reported   Amended     As reported  Amended     As reported  Amended  As reported    Amended
                          -------------------------------------------------------------------------------------------------
<S>                          <C>        <C>          <C>         <C>          <C>        <C>        <C>          <C>
          Total revenues     $ 3,936    $  4,407     $ 8,065     $  8,748     $  7,462   $  8,392   $  12,396    $  13,564
          Total expenses       3,212       3,682       3,859        4,550        6,485      7,461       8,105        9,422
          Minority                --          (2)         --            3           --         19          --           66
          interests
          Equity in net
          income of USPEs          3           4         (35)         (30)       1,450      1,477         (40)          43
          Net income          $  727      $  727     $ 4,171     $  4,171    $   2,427  $   2,427    $  4,251     $  4,251
</TABLE>

     The consolidation of the partnership's majority interests in USPE's did not
     change  partners'  capital or net income (loss) as of and for the three and
     six months ended June 30, 1999 and 1998.

12.  SUBSEQUENT EVENT

     The Partnership repaid $0.7 million of the outstanding note balance on July
     2, 1999.








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 JUNE 30, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating and asset-specific  insurance  expenses) on owned equipment
decreased  during the three months ended June 30, 1999 when compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income,  and certain  expenses such as depreciation and amortization and general
and  administrative  expenses relating to the operating  segments (see Note 7 to
the financial  statements),  are not included in the owned  equipment  operation
discussion  because  these  expenses  are  indirect  in nature,  not a result of
operations  but the result of owning a portfolio  of  equipment.  The  following
table presents  lease revenues less direct  expenses by segment (in thousands of
dollars):

                                               For the Three Months
                                                  Ended June 30,
                                              1999              1998
                                         ------------------------------------

  Aircraft                              $         1,394    $         1,717
  Railcars                                        1,253              1,157
  Marine vessel                                     245                273
  Trailers                                          134                245
  Marine containers                                  33                 48
  Mobile offshore drilling unit                      --                342

Aircraft: Aircraft lease revenues and direct expenses were $1.5 million and $0.1
million,  respectively,  for the quarter  ended June 30, 1999,  compared to $1.7
million  and  $19,000,  respectively,  during  the same  period  of 1998.  Lease
revenues  decreased  $0.2  million  during the quarter  ended June 30, 1999 when
compared to the same period in 1998 due to one  aircraft  being  offlease in the
second quarter of 1999 which was on lease and had $0.4 million of lease revenues
during the same  period of 1998.  The  decrease in lease  revenue was  partially
offset by the increase in lease  revenue of $0.2  million from an aircraft  that
was transferred into the  Partnership's  owned equipment  portfolio from a trust
during the second quarter of 1998.

Railcars: Railcars lease revenues and direct expenses were $1.7 million and $0.5
million,  respectively,  for the quarter  ended June 30, 1999,  compared to $1.8
million and $0.6  million,  respectively,  during the same  period of 1998.  The
decrease in leases  revenues and direct expenses  resulted from  dispositions of
railcars during 1999 and 1998.

Marine  Vessel:  Marine  vessel  lease  revenues and direct  expenses  were $0.5
million and $0.2  million,  respectively,  for the quarter  ended June 30, 1999,
compared to $0.7 million and $0.4 million, respectively,  during the same period
of 1998.  The  decrease  in lease  revenues  was due to lower lease rates in the
second  quarter of 1999 when compared to the same quarter of 1998.  The decrease
in direct expenses was due to $0.1 million decrease in marine operating expenses
and $0.1 million decrease in repairs and maintenance expenses.

Trailers:  Trailer  lease  revenues  and direct  expenses  were $0.2 million and
$48,000,  respectively,  for the quarter  ended June 30, 1999,  compared to $0.3
million and $0.1  million,  respectively,  during the same  period of 1998.  The
number of trailers owned by the  Partnership has been declining due to sales and
dispositions.  The  result of this  declining  fleet is a  decrease  in  trailer
contribution.

Marine  containers:  Marine  container  lease revenues and direct  expenses were
$34,000 and $1,000  respectively,  for the quarter ended June 30, 1999, compared
to $0.1 million and $2,000,  respectively,  during the same period of 1998.  The
number of marine  containers  owned by the Partnership has been declining due to
sales and  dispositions.  The result of this declining fleet has been a decrease
in marine container contribution.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct  expenses  were $0.4  million and $9,000,  respectively,  for the quarter
ended June 30, 1998. The Partnership  sold its mobile offshore  drilling unit in
June of 1998.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $2.8  million  for the quarter  ended June 30, 1999
decreased from $3.4 million for the same period of 1998.  Significant  variances
are explained as follows:

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

     (ii) A decrease  of $0.3  million in  interest  expense  was due to a lower
          average debt outstanding  during the three months ended June 30, 1999,
          compared to the same period in 1998.

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

     (iv)An increase of $0.5  million in bad debt  expense  from 1998 due to the
          collection of $0.5 million during the second quarter of 1998 from past
          due receivables that had previously been reserved for as a bad debt. A
          similar collection was not made in 1999.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of owned  equipment for the second  quarter of
1999 was $0.5 million,  resulting  from the  disposition  of marine  containers,
railcars,  and trailers,  with an aggregate net book value of $0.1 million,  for
aggregate  proceeds of $0.6 million.  The net gain on the  disposition  of owned
equipment for the second  quarter of 1998 was $3.7 million,  which resulted from
the disposition of marine containers,  trailers, railcars, and a mobile offshore
drilling unit with an aggregate  net book value of $7.6  million,  for aggregate
proceeds of $11.3 million.

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

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

                                                     For the Three Months
                                                        Ended June 30,
                                                    1999              1998
                                               ---------------------------------

  Aircraft, aircraft engines, and rotables     $          4   $         (30)
                                               =================================
      Equity in net income (loss) of USPEs     $          4   $         (30)
                                               =================================

Aircraft,  aircraft engines, and rotables:  As of June 30, 1998, the Partnership
had an interest in two trusts that owned six commercial  aircraft,  two aircraft
engines,  and a portfolio of aircraft  rotables.  The Partnership sold these two
trusts during the first quarter of 1999.  As of June 30, 1998,  the  Partnership
had an interest in a trust that owned four commercial aircraft.  The aircraft in
this  trust  was  transferred  out of the  trust  into the  Partnership's  owned
equipment  portfolio in the second quarter of 1998. The  Partnership's  share of
aircraft  revenues and expenses was $1,000 and a credit of $3,000  respectively,
for the quarter ended June 30, 1999,  compared to $0.4 million and $0.4 million,
respectively,  during the same period of 1998.  The decrease in revenues was due
to the  sale of the  equipment  in the  two  trusts  and an  aircraft  that  was
transferred out of a trust into the  Partnership's  owned  equipment  portfolio.
Aircraft expenses decreased as a result of the sales and the transfer.

(E)  Net Income

As a result of the foregoing,  the  Partnership had a net income of $0.7 million
in the second  quarter  of 1999  compared  to net income of $4.2  million in the
second  quarter of 1998.  The  Partnership's  ability to operate  and  liquidate
assets,  secure leases, and re-lease those assets whose leases expire is subject
to many factors.  Therefore,  the Partnership's  performance in the three months
ended June 30, 1999 is not  necessarily  indicative  of future  periods.  In the
second quarter of 1999, the Partnership  distributed $2.0 million to the limited
partners, or $0.20 per weighted-average depositary unit.

Comparison of the Partnership's  Operating Results for the Six Months Ended June
30, 1999 and 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating and asset-specific  insurance  expenses) on owned equipment
decreased  during the six months  ended June 30, 1999 when  compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income,  and certain  expenses such as depreciation and amortization and general
and  administrative  expenses relating to the operating  segments (see Note 7 to
the financial  statements),  are not included in the owned  equipment  operation
discussion  because  these  expenses  are  indirect  in nature,  not a result of
operations  but the result of owning a portfolio  of  equipment.  The  following
table presents  lease revenues less direct  expenses by segment (in thousands of
dollars):

                                                   For the Six Months
                                                      Ended June 30,
                                                  1999               1998
                                           -------------------------------------

  Aircraft                                     $        2,810   $         3,274
  Railcars                                              2,660             2,468
  Marine vessel                                           446               414
  Trailers                                                229               510
  Marine containers                                        70               164
  Mobile offshore drilling unit                            --               737

Aircraft: Aircraft lease revenues and direct expenses were $3.0 million and $0.2
million,  respectively, for the six months ended June 30, 1999, compared to $3.4
million and $0.1 million,  respectively,  during the same period of 1998.  Lease
revenues  decreased $0.4 million during the six months ended June 30, 1999, when
compared to the same period in 1998 due to one aircraft  being  offlease  during
the first six  months of 1999  which was on lease and had $0.8  million of lease
revenues  during the same  period of 1998.  The  decrease  in lease  revenue was
partially  offset by the  increase  in lease  revenue  of $0.4  million  from an
aircraft that was transferred into the Partnership's  owned equipment  portfolio
from a trust during the second quarter of 1998.

Railcars: Railcars lease revenues and direct expenses were $3.5 million and $0.8
million,  respectively, for the six months ended June 30, 1999, compared to $3.7
million and $1.2  million,  respectively,  during the same  period of 1998.  The
decrease in leases  revenues and direct expenses  resulted from  dispositions of
railcars during 1999 and 1998.

Marine  Vessel:  Marine  vessel  lease  revenues and direct  expenses  were $0.9
million and $0.5 million, respectively, for the nine months ended June 30, 1999,
compared to $1.2 million and $0.7 million, respectively,  during the same period
of 1998.  The decrease in lease revenues was due to lower lease rates in the six
months  ended  June 30,  1999 when  compared  to the same  period  of 1998.  The
decrease in direct expenses was due to $0.1 million decrease in marine operating
expenses and $0.1 million decrease in repairs and maintenance expenses.

Trailers:  Trailer lease revenues and direct expenses were $0.3 million and $0.1
million,  respectively, for the six months ended June 30, 1999, compared to $0.6
million and $0.1  million,  respectively,  during the same  period of 1998.  The
number of trailers owned by the  Partnership has been declining due to sales and
dispositions.  The  result of this  declining  fleet is a  decrease  in  trailer
contribution.

Marine containers: Marine container lease revenues and direct expenses were $0.1
million  and  $1,000,  respectively,  for the six months  ended  June 30,  1999,
compared to $0.2  million and  $3,000,  respectively,  during the same period of
1998.  The  number  of  marine  containers  owned  by the  Partnership  has been
declining due to sales and dispositions. The result of this declining fleet is a
decrease in marine container net contribution.

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

(B)   Indirect Operating Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $5.8 million for the six months ended June 30, 1999
decreased from $7.2 million for the same period of 1998. Significant variance is
explained as follows:

     (i)  A decrease in depreciation and  amortization  expenses of $1.3 million
          from  1998  levels   reflects  the  sale  or  disposition  of  certain
          Partnership  assets during 1999 and 1998 and the  Partnership's use of
          the  double-declining  balance method of depreciation which results in
          greater depreciation in the first years an asset is owned.

     (ii) A  decrease  of $0.5  million  in  interest  expense  was due to lower
          average  debt  outstanding  during the six months  ended June 30, 1999
          when compared to the same period of 1998.

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

     (iv) An increase of $0.3  million in bad debt  expense from 1998 due to the
          collection  of $0.5 million  during the six months ended June 30, 1998
          from past due  receivables  that had previously been reserved for as a
          bad  debt.  The  increase  was  also  due  to  the  General  Partner's
          evaluation  of the  collectability  of  receivables  due from  certain
          lessees.

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

(C)   Net Gain on Disposition of Owned Equipment

The net gain on the disposition of equipment was $0.5 million for the six months
ended  June 30,  1999,  resulting  from the  disposition  of marine  containers,
trailers,  and railcars with an aggregate  net book value of $0.1  million,  for
aggregate proceeds of $0.6 million.  For the six months ended June 30, 1998, the
net gain of $3.7 million  resulting from the  disposition of marine  containers,
trailers,  railcars,  and a mobile offshore  drilling unit with an aggregate net
book value of $7.8 million, for aggregate proceeds of $11.5 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 Six Months
                                                          Ended June 30,
                                                      1999              1998
                                               ---------------------------------

  Aircraft, aircraft engines, and rotables      $      1,477    $            43
                                               ---------------------------------
      Equity in net income                      $      1,477    $            43
                                               =================================

Aircraft,  aircraft engines, and rotables:  As of June 30, 1998, the Partnership
had an interest in two trusts that owned six commercial  aircraft,  two aircraft
engines,  and a portfolio of aircraft  rotables.  The Partnership sold these two
trusts during the first quarter of 1999.  As of June 30, 1998,  the  Partnership
had an interest in a trust that owned four commercial aircraft.  The aircraft in
this  trust  was  transferred  out of the  trust  into the  Partnership's  owned
equipment  portfolio in the second quarter of 1998. The  Partnership's  share of
aircraft revenues and expenses was $1.6 million and $0.1 million,  respectively,
for the six months  ended  June 30,  1999,  compared  to $0.8  million  and $0.8
million,  respectively,  during  the  same  period  of 1998.  The  $1.6  million
represented the gain from the sale of the equipment in the two trusts during the
first quarter of 1999. No lease revenues were earned during the first six months
of 1999 due to the sale of the  equipment in the two trusts and an aircraft that
was transferred out of a trust into the Partnership's owned equipment portfolio.
Aircraft expenses decreased as a result of the sales and the transfer.

(E)  Net Income

As a result of the foregoing, the Partnership had net income of $2.4 million for
the six months ended June 30, 1999,  compared to a net income of $4.3 million in
the same period of 1998.  The  Partnership's  ability to operate,  or  liquidate
assets,  secure leases, and re-lease those assets whose leases expire is subject
to many factors.  Therefore,  the  Partnership's  performance  in the six months
ended  June 30,  1999 is not  necessarily  indicative  of  future  periods.  The
Partnership  distributed  $3.9  million to the  limited  partners,  or $0.40 per
weighted-average depositary unit in the six months ended June 30, 1999.

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

For the six months ended June 30, 1999, the Partnership generated operating cash
of $3.5 million (net cash provided by operating activities, plus non-liquidating
distributions  from  USPEs)  to  meet  its  operating  obligations  and to  make
distributions  (total for six months ended June 30, 1999 of  approximately  $4.2
million) to the partners but also used  undistributed  available cash from prior
periods and asset sale proceeds of approximately $0.7 million.

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

Lessee  deposits and reserve for repairs  increased  $0.3 million during the six
months  ended June 30, 1999  compared to December 31, 1998 due to an increase of
$0.2  million in reserve for repairs and an increase of $0.1  million in prepaid
lease revenue.

During the first six months of 1999, the Partnership  repaid $3.6 million of the
outstanding  note  balance from the  proceeds of asset  sales.  The  Partnership
repaid $0.7 million on July 2, 1999. As of July 29, 1999, the  outstanding  note
balance was $14.3 million.

The General  Partner has not  planned  any  expenditure,  nor is it aware of any
contingencies that would cause the Partnership to require any additional capital
to that mentioned above.

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

(III) EFFECTS OF YEAR 2000

It is possible that the General Partner's  currently installed computer systems,
software  products,  and other business  systems,  or those of the Partnership's
vendors,  service  providers,   and  customers,   working  either  alone  or  in
conjunction  with other  software or systems,  may not accept  input of,  store,
manipulate,  and  output  dates on or after  January  1, 2000  without  error or
interruption,  a possibility commonly known as the "Year 2000" or "Y2K" problem.
As the  Partnership  relies  substantially  on the  General  Partner's  software
systems,   applications   and  control   devices  in  operating  and  monitoring
significant  aspects of its  business,  any Year 2000  problem  suffered  by the
General  Partner  could  have a  material  adverse  effect on the  Partnership's
business, financial condition and results of operations.

The General Partner has  established a special Year 2000 oversight  committee to
review  the  impact of Year  2000  issues on its  business  systems  in order to
determine  whether  such systems will retain  functionality  after  December 31,
1999.  As of June  30,  1999,  the  General  Partner  has  completed  inventory,
assessment,  remediation  and testing stages of its Year 2000 review of its core
business  information  systems.   Specifically,  the  General  Partner  (a)  has
integrated Year  2000-compliant  programming  code into its existing  internally
customized and internally developed transaction  processing software systems and
(b) the General Partner's  accounting and asset management software systems have
been made Year 2000  compliant.  In addition,  numerous other  software  systems
provided  by vendors and  service  providers  have been  replaced  with  systems
represented by the vendor or service provider to be Year 2000 functional.  These
systems  will be fully  tested  September  by 30,  1999 and are  expected  to be
compliant.

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

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

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

There can be no  assurance  that the  software  systems of such  parties will be
converted or made Year 2000 compliant in a timely manner. Failure by the General
Partner  or such  other  parties  to make  their  respective  systems  Year 2000
compliant  could  have a  material  adverse  effect on the  business,  financial
position, and results of operations of the Partnership.  The General Partner has
made and will  continue an ongoing  effort to recognize  and evaluate  potential
exposure  relating to third party Year 2000  noncompliance.  The General Partner
will  implement  a  contingency  plan if the  General  Partner  determines  that
third-party   noncompliance   would  have  a  material  adverse  effect  on  the
Partnership's business, financial position, or results of operation.

The General  Partner is currently  developing a contingency  plan to address the
possible failure of any systems or vendors or service providers due to Year 2000
problems.  For the purpose of such  contingency  planning,  a reasonably  likely
worst case scenarios primarily  anticipate a) an inability to access systems and
data on a temporary basis resulting in possible delay in reconciliation of funds
received or payment of monies owed,  or b) an inability to  continuously  employ
equipment  assets  due to  temporary  Year  2000  related  failure  of  external
infrastructure  necessary to the ongoing operation of the equipment. The General
Partner is evaluating  whether there are  additional  scenarios,  which have not
been  identified.  Contingency  planning  will  encompass  strategies  up to and
including  manual  processes.  The General Partner  anticipates that these plans
will be completed by September 30, 1999.

(IV)  ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities,"  which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure them at fair value.

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


V)  OUTLOOK FOR THE FUTURE

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

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

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

1. The Partnership is experiencing difficulty in releasing and selling its older
aircraft.

2.  Decrease in demand of available  marine  container  has lead to a decline in
lease rates.

3.  Depressed  economic  conditions in Asia have led to declining  freight rates
through the early part of 1999 for drybulk  vessels.  The market has  stabilized
and is  expected  to  improve  over  the next 2-3  years in the  absence  of new
additional orders.

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

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

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

(VI)  FORWARD-LOOKING INFORMATION

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


TEM 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 $61,000 in the  remaining two quarters of
1999, and $25,000 in 2000. The Partnership  estimates a two percent  increase or
decrease in the Partnership's  variable rate debt would result in an increase or
decrease,  respectively,  in interest  expense of $121,000 in the  remaining two
quarters of 1999 and $49,000 in 2000.

During the six months ended June 30, 1999, 74% 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: January 24, 2000                       By: /s/ Richard K Brock
                                                 Richard K Brock
                                                 Vice President and
                                                 Corporate Controller