<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from DAVIDSON
DIVERSIFIED REAL ESTATE III, L.P 2000 Third Quarter 10-QSB and is qualified in
its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000773679
<NAME> DAVIDSON DIVERSIFIED REAL ESTATE III, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JUL-01-2000
<PERIOD-END> SEP-30-2000
<CASH> 699
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 35,826
<DEPRECIATION> (19,185)
<TOTAL-ASSETS> 18,153
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 23,539
0
0
<COMMON> 0
<OTHER-SE> (6,399)
<TOTAL-LIABILITY-AND-EQUITY> 18,153
<SALES> 0
<TOTAL-REVENUES> 4,655
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,008
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,616
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (353)
<EPS-BASIC> (342.07)<F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>