<PAGE> PAGE 1
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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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053 A000400 Y
053 B000400 Y
053 C000400 N
055 A000400 N
055 B000400 N
056 000400 Y
057 000400 N
062 A000400 N
062 B000400 0.0
062 C000400 0.0
062 D000400 0.0
062 E000400 0.0
062 F000400 0.0
062 G000400 0.0
062 H000400 0.0
062 I000400 0.0
062 J000400 0.0
062 K000400 0.0
062 L000400 0.0
062 M000400 0.0
062 N000400 0.0
062 O000400 0.0
062 P000400 0.0
062 Q000400 0.0
062 R000400 0.0
066 A000400 Y
066 B000400 N
066 C000400 N
066 D000400 N
066 E000400 Y
066 F000400 N
066 G000400 N
067 000400 N
068 A000400 N
068 B000400 N
069 000400 N
070 A010400 Y
070 A020400 N
070 B010400 Y
070 B020400 N
070 C010400 N
070 C020400 N
070 D010400 Y
070 D020400 N
070 E010400 N
070 E020400 N
070 F010400 Y
070 F020400 N
<PAGE> PAGE 22
070 G010400 Y
070 G020400 N
070 H010400 Y
070 H020400 N
070 I010400 N
070 I020400 N
070 J010400 Y
070 J020400 N
070 K010400 Y
070 K020400 N
070 L010400 Y
070 L020400 N
070 M010400 N
070 M020400 N
070 N010400 Y
070 N020400 N
070 O010400 Y
070 O020400 N
070 P010400 N
070 P020400 N
070 Q010400 N
070 Q020400 N
070 R010400 N
070 R020400 N
071 A000400 3480
071 B000400 1449
071 C000400 2583
071 D000400 56
072 A000400 8
072 B000400 18
072 C000400 23
072 D000400 0
072 E000400 0
072 F000400 14
072 G000400 17
072 H000400 0
072 I000400 0
072 J000400 5
072 K000400 1
072 L000400 0
072 M000400 0
072 N000400 8
072 O000400 0
072 P000400 0
072 Q000400 0
072 R000400 6
072 S000400 2
072 T000400 5
072 U000400 4
072 V000400 0
072 W000400 1
<PAGE> PAGE 23
072 X000400 63
072 Y000400 29
072 Z000400 7
072AA000400 78
072BB000400 0
072CC010400 302
072CC020400 0
072DD010400 7
072DD020400 0
072EE000400 0
073 A010400 0.0200
073 A020400 0.0000
073 B000400 0.0000
073 C000400 0.0000
074 A000400 672
074 B000400 0
074 C000400 0
074 D000400 911
074 E000400 13
074 F000400 2284
074 G000400 0
074 H000400 0
074 I000400 0
074 J000400 49
074 K000400 0
074 L000400 42
074 M000400 28
074 N000400 3999
074 O000400 10
074 P000400 0
074 Q000400 0
074 R010400 0
074 R020400 0
074 R030400 0
074 R040400 15
074 S000400 0
074 T000400 3974
074 U010400 352525
074 U020400 994
074 V010400 11.24
074 V020400 11.21
074 W000400 0.0000
074 X000400 265
074 Y000400 0
075 A000400 0
075 B000400 2949
076 000400 0.00
SIGNATURE KEN LARSEN
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT
OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, STATEMENT OF CHANGES IN NET
ASSETS AND THE FINANCIAL HIGHLIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000763749
<NAME> Voyageur Mutual Funds III, Inc.
<SERIES>
<NUMBER> 1
<NAME> Voyageur Growth Stock Fund
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-START> May-01-1995
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 22,256,741
<INVESTMENTS-AT-VALUE> 28,714,250
<RECEIVABLES> 28,480
<ASSETS-OTHER> 1,462,760
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,205,490
<PAYABLE-FOR-SECURITIES> 662,770
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,205
<TOTAL-LIABILITIES> 690,975
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,139,168
<SHARES-COMMON-STOCK> 1,247,828
<SHARES-COMMON-PRIOR> 1,188,057
<ACCUMULATED-NII-CURRENT> 7,841
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 909,997
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,457,509
<NET-ASSETS> 29,514,515
<DIVIDEND-INCOME> 532,590
<INTEREST-INCOME> 8,787
<OTHER-INCOME> 0
<EXPENSES-NET> 448,699
<NET-INVESTMENT-INCOME> 92,678
<REALIZED-GAINS-CURRENT> 2,164,698
<APPREC-INCREASE-CURRENT> 3,458,567
<NET-CHANGE-FROM-OPS> 5,715,943
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 122,056
<DISTRIBUTIONS-OF-GAINS> 1,197,008
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 251,610
<NUMBER-OF-SHARES-REDEEMED> 247,501
<SHARES-REINVESTED> 55,662
<NET-CHANGE-IN-ASSETS> 5,863,111
<ACCUMULATED-NII-PRIOR> 37,219
<ACCUMULATED-GAINS-PRIOR> (57,693)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 222,957
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 487,433
<AVERAGE-NET-ASSETS> 25,959,183
<PER-SHARE-NAV-BEGIN> 19.91
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 4.82
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 1.04
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 23.66
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT
OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, STATEMENT OF CHANGES IN NET
ASSETS AND THE FINANCIAL HIGHLIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000763749
<NAME> Voyageur Mutual Funds III, Inc.
<SERIES>
<NUMBER> 2
<NAME> Voyageur International Equity Fund
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-START> May-01-1995
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 2,365,800
<INVESTMENTS-AT-VALUE> 2,563,690
<RECEIVABLES> 12,003
<ASSETS-OTHER> 279,008
<OTHER-ITEMS-ASSETS> 22,001
<TOTAL-ASSETS> 2,876,702
<PAYABLE-FOR-SECURITIES> 17,274
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,948
<TOTAL-LIABILITIES> 31,222
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,646,172
<SHARES-COMMON-STOCK> 273,268
<SHARES-COMMON-PRIOR> 215,404
<ACCUMULATED-NII-CURRENT> 6,212
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,609)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 197,705
<NET-ASSETS> 2,845,480
<DIVIDEND-INCOME> 48,276
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 46,813
<NET-INVESTMENT-INCOME> 1,463
<REALIZED-GAINS-CURRENT> 55,295
<APPREC-INCREASE-CURRENT> 196,834
<NET-CHANGE-FROM-OPS> 253,592
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,259
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,587
<NUMBER-OF-SHARES-SOLD> 81,697
<NUMBER-OF-SHARES-REDEEMED> 24,281
<SHARES-REINVESTED> 448
<NET-CHANGE-IN-ASSETS> 816,530
<ACCUMULATED-NII-PRIOR> 4,141
<ACCUMULATED-GAINS-PRIOR> 871
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 23,307
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 126,237
<AVERAGE-NET-ASSETS> 2,329,315
<PER-SHARE-NAV-BEGIN> 9.42
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.01
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT
OF ASSETS AND LIABILITIES, STATEMENT OF OPERATIONS, STATEMENT OF CHANGES IN NET
ASSETS AND THE FINANCIAL HIGHLIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000763749
<NAME> Voyageur Mutual Funds III, Inc.
<SERIES>
<NUMBER> 3
<NAME> Voyageur Aggressive Growth Fund
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-START> May-01-1995
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 3,335,886
<INVESTMENTS-AT-VALUE> 4,316,778
<RECEIVABLES> 118,247
<ASSETS-OTHER> 43,390
<OTHER-ITEMS-ASSETS> 14,957
<TOTAL-ASSETS> 4,493,372
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,020
<TOTAL-LIABILITIES> 9,020
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,559,363
<SHARES-COMMON-STOCK> 343,039
<SHARES-COMMON-PRIOR> 222,795
<ACCUMULATED-NII-CURRENT> 4,223
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (60,126)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 980,892
<NET-ASSETS> 4,484,352
<DIVIDEND-INCOME> 25,662
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 60,832
<NET-INVESTMENT-INCOME> (35,170)
<REALIZED-GAINS-CURRENT> 217,654
<APPREC-INCREASE-CURRENT> 716,738
<NET-CHANGE-FROM-OPS> 899,222
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 121,249
<DISTRIBUTIONS-OTHER> 25,608
<NUMBER-OF-SHARES-SOLD> 163,440
<NUMBER-OF-SHARES-REDEEMED> 55,426
<SHARES-REINVESTED> 12,230
<NET-CHANGE-IN-ASSETS> 2,167,332
<ACCUMULATED-NII-PRIOR> 2,815
<ACCUMULATED-GAINS-PRIOR> 264,154
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,256
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 95,075
<AVERAGE-NET-ASSETS> 3,425,980
<PER-SHARE-NAV-BEGIN> 10.40
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> 3.27
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.40
<RETURNS-OF-CAPITAL> 0.09
<PER-SHARE-NAV-END> 13.08
<EXPENSE-RATIO> 2.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
statement of assets and liabilities, statement of operations, statement of
changes in net assets and the financial highlights and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000763749
<NAME> Voyageur Mutual Funds III, Inc.
<SERIES>
<NUMBER> 4
<NAME> Voyageur Growth and Income Fund
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Apr-30-1996
<PERIOD-START> May-01-1995
<PERIOD-END> Apr-30-1996
<INVESTMENTS-AT-COST> 2,906,106
<INVESTMENTS-AT-VALUE> 3,208,478
<RECEIVABLES> 90,606
<ASSETS-OTHER> 672,213
<OTHER-ITEMS-ASSETS> 27,651
<TOTAL-ASSETS> 3,998,948
<PAYABLE-FOR-SECURITIES> 10,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,392
<TOTAL-LIABILITIES> 25,392
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,588,260
<SHARES-COMMON-STOCK> 353,519
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,494
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 78,430
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 302,372
<NET-ASSETS> 3,973,556
<DIVIDEND-INCOME> 22,356
<INTEREST-INCOME> 17,974
<OTHER-INCOME> 0
<EXPENSES-NET> 33,391
<NET-INVESTMENT-INCOME> 6,939
<REALIZED-GAINS-CURRENT> 78,430
<APPREC-INCREASE-CURRENT> 302,372
<NET-CHANGE-FROM-OPS> 387,741
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,699
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 373,616
<NUMBER-OF-SHARES-REDEEMED> 20,684
<SHARES-REINVESTED> 587
<NET-CHANGE-IN-ASSETS> 3,973,556
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,256
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62,782
<AVERAGE-NET-ASSETS> 2,948,584
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 1.24
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.24
<EXPENSE-RATIO> 1.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
INDEPENDENT AUDITORS' REPORT ON INTERNAL ACCOUNTING CONTROL
The Board of Directors and Shareholders
Voyageur Mutual Funds III, Inc.:
In planning and performing our audit of the financial statements of Voyageur
Aggressive Growth Fund, Voyageur Growth Stock Fund, Voyageur International
Equity Fund, and Voyageur Growth and Income Fund (funds within Voyageur Mutual
Funds III, Inc.) for the period ended April 30, 1996, we considered its internal
control structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of Voyageur Mutual Funds III, Inc. is responsible for
establishing and maintaining a system of internal accounting control. In
fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition
and that transactions are executed in accordance with management's authorization
and recorded properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be a material weakness as defined above as of
April 30, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 7, 1996
