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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Quarter Ended June 30, 2004 Commission file number 33-00152

AMRECORP REALTY FUND III

(Exact name of registrant as specified in its charter)

TEXAS 75-2045888
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification
Number)

2800 N Dallas Pkwy Suite 100
Plano, Texas 75093-5994

(Address of principal executive offices)


Registrant's telephone number, including area code: (972) 836-8000.


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: Y No:


REGISTRANT IS A LIMITED PARTNERSHIP

TABLE OF CONTENTS




Item 1. Financial Statements


The following Unaudited financial statements are filed herewith:

Consolidated Balance Sheet as of June 30, 2004 and
December 31, 2003 Page 3

Consolidated Statements of Operations for the Three
And Six Months Ended June 30, 2004 and 2003 Page 4

Consolidated Statements of Cash Flows for the Six months
Ended June 30, 2004 and 2003 Page 5



Item 2. Results of Operations and Management's Discussion and
Analysis of Financial Condition Page 6

Liquidity and Capital Resources Page 7

Other Information Page 9

Signatures Page 11


The statements, insofar as they relate to the period subsequent to
December 31, 2003 are Unaudited.


PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

AMRECORP REALTY FUND III
Condensed Consolidated Balance Sheets

June 30 December 31,
2004 2003
(Unaudited)

ASSETS
Real Estate assets, at cost
Land $1,000,000 $1,000,000
Buildings and improvements 7,180,636 7,180,636
8,180,636 8,180,636
Less: Accumulated depreciation (5,167,023) (4,983,023)
3,013,613 3,197,613

Cash including cash investments 31,136 19,115
Escrow deposits 78,557 149,208
Deferred Financing Costs 67,317 71,881
Other assets 96,890 29,787
TOTAL ASSETS $3,287,513 $3,467,604


LIABILITIES AND PARTNERS' EQUITY:

LIABILITIES
Mortgage and notes payable $3,967,836 $3,999,545
Note Payable - Affiliates 126 1,338
Real estate taxes payable 74,125 136,892
Security deposits 59,372 57,788
Accounts payable & accrued expenses 139,952 116,175
expenses

4,241,411 4,311,738
Partners Capital (Deficit)
Limited Partners (1,999,694) (1,940,528)
Special Limited Partner 1,201,735 1,251,735
General Partner (155,939) (155,341)

Total Partners Capital (Deficit) (953,898) (844,134)


Total Liability And Partners Equity $3,287,513 $3,467,604

See notes to Condensed Consolidated Financial Statements


AMRECORP REALTY FUND III
Condensed Consolidated Statement of Operations
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
REVENUES 2004 2003 2004 2003


Rental income $406,034 $373,710 $797,258 $764,592
Other property 28,055 24,935 53,423 42,749
Total revenues 434,089 398,645 850,681 807,341

EXPENSES
Salaries & wages 73,580 71,142 155,014 147,254
Maintenance & repairs 68,636 78,685 124,953 150,163
Utilities 27,503 39,843 69,730 88,468
Real estate taxes 37,500 37,500 75,000 75,000
General administrative 14,835 16,366 27,574 29,473
Contract services 32,516 22,207 55,545 45,937
Insurance 27,951 29,637 48,432 60,261
Interest 61,444 62,265 123,099 124,728
Depreciation and amortization 94,282 85,282 188,564 170,564
amortization
Property management fees 21,704 19,932 42,534 40,367
Total expenses 459,951 462,859 910,445 932,215


NET INCOME (LOSS) ($25,862) ($64,214) ($59,764) ($124,874)


NET INCOME PER SHARE $(10.86) $(26.96) $(25.09) $(52.42)

See Notes to Condensed Consolidated Financial Statements


AMRECORP REALTY FUND III
Condensed Consolidated Statement of Cash Flows
Unaudited

Six Months Ended
June 30,
2004 2003

CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($59,764) ($124,874)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 184,000 166,000
Net Effect of changes in operating accounts
Escrow deposits 70,651 62,195
Capital replacement reserve 0 284
Accrued real estate taxes (62,767) (74,534)
Security deposits 1,584 671
Accounts payable 23,777 10,755
Deferred Financing Costs 4,564 (21,063)
Other assets (67,103) 4,564
Net cash provided by operating activities 94,942 23,998

CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable (31,709) (29,814)

Note payable - affiliates (1,212) (1,645)
Distribution to special limited partner (50,000) 10,000
Net cash used by investing activities (82,921) (21,459)

NET INCREASE (DECREASE) IN CASH AND CASH 12,021 2,539
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 19,115 23,824

CASH AND CASH EQUIVALENTS, END OF PERIOD $31,136 $26,363


See Notes to Condensed Consolidated Financial Statements


Basis of Presentation:

Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the
Partnership believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the
Partnership's latest annual report on Form 10-K.








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

Results of Operations
At June 30, 2004 the Partnership owned Las Brisas Apartments, a
376-unit apartment community located at 2010 South Clark Street,
Abilene, Taylor County, Texas 79606. The Partnership purchased a
fee simple interest in Las Brisas Apartments on July 30, 1986.
The property contains approximately 312,532 net rentable square
feet, one clubhouse, and five laundry facilities located on
approximately 19.11 acres of land.

The occupancy of Las Brisas averaged 95.1% during the second
quarter of 2004 as compared to 91.9% for the second quarter of
2003.

SECOND QUARTER 2004 COMPARED TO SECOND QUARTER 2003

Revenue from property operations increased $35,444, or 8.89%, for
the second quarter of 2004, as compared to the second quarter of
2003. Rental income increased $32,324 or 8.65% due to higher
occupancies. Other property income increased $3,120 or 12.51%
mainly due to increased fee collections. The following table
illustrates the components:


Increase Percent
(Decrease) Change

Rental income 32,324 8.65%
Other property 3,120 12.51%
Net Increase (Decrease) 35,444 8.89%


Property operating expenses: decreased by $2,908 or 0.63% for the
second quarter of 2004 compared to the second quarter of 2003 due
primarily to decreased utilities. Utilities decreased $12,340 or
30.97% due to lower gas consumption. Contract services increased
$10,309 or 46.42% due to increased cable television costs.
Maintenance & repairs decreased $10,049 or 12.77% due to
decreased exterior building maintenance. The following table
illustrates the components:


Increase Percent
(Decrease) Change

Salaries & wages 2,438 3.43%
Maintenance & repairs (10,049) 12.77%
Utilities (12,340) 30.97%
General administrative (1,531) 9.35%
Contract services 10,309 46.42%
Insurance (1,686) 5.69%
Interest (821) 1.32%
Depreciation and amortization 9,000 10.55%
Property management fees 1,772 8.89%
Net Increase (Decrease) (2,908) 0.63%





SECOND QUARTER 2003 COMPARED TO SECOND QUARTER 2002

Revenue from property operations increased $1,010, or 0.25%, for
the second quarter of 2003, as compared to the second quarter of
2002 Other property income decreased $639 or 2.50% mainly due to
decreased fee collections. The following table illustrates the
components:
Increase Percent
(Decrease) Change

Rental income 1,649 0.44%
Other property (639) 2.50%
Net Increase (Decrease) 1,010 0.25%
(Decrease)



Property operating expenses: decreased by $3,118 or 0.67% for the
second quarter of 2003 compared to the second quarter of 2002 due
primarily to decreased maintenance and repair costs. Maintenance
& repairs decreased $9,303 or 10.57% due to parking lot repairs.
Utilities increased $6,092 or 18.05% from higher natural gas
costs Insurance decreased $2,484 or 7.73% due to reduced flood
insurance policy costs. Contract service decreased $2,452 or
9.94% due to lower lawn care costs for the property.. The
following table illustrates the components:

Increase Percent
(Decrease) Change

Salaries & wages 5,484 8.35%
Maintenance & repairs (9,303) 10.57%
Utilities 6,092 18.05%
Real estate taxes 1,749 4.89%
General administrative (1,983) 10.81%
Contract services (2,452) 9.94%
Insurance (2,484) 7.73%
Interest (272) 0.43%
Property management fees 51 0.26%
Net Increase (Decrease) (3,118) 0.67%

LIQUIDITY AND CAPITAL RESOURCES

On July 31, 1986 the Partnership purchased the Las Brisas
Apartments. The purchase provided for the sellers to receive cash
at closing and notes totaling $660,000. On September 30, 1987 the
principal balance due totaled $210,000. In order to obtain the
necessary proceeds to finally retire these notes the General
Partners offered 254 Units of the Partnership to two investors at
the price of $200,660. No commissions were taken nor did the
General Partner receive any fees in connection with these
interests. The Partnership then obtained short term financing
from Resource Savings Association totaling $260,000, bearing
interest at the rate of 2% over prime and payable quarterly
together with principal payments of $15,000 each. Security for
the loan was provided by a $100,000 certificate of deposit and
the personal guaranties of the Partnership's General Partners.
The Resource Savings Association loan matured December 31,1983.
In September 1991 Mr. Werra paid $40,750 in satisfaction of his
personal guaranty of the Partnership loan.

The Partnership defaulted in its debt obligations in August
1988. The Partnership was forced to seek protection under Chapter
11 of the United States Bankruptcy Code in December, 1988 when
negotiations with Aetna Life Insurance Company, ("Aetna") the
holder of the two underlying first mortgage notes and Las Brisas
Apartments, Ltd. and Abilene Associates, Ltd., the holders of
respective wrap mortgage notes ("Wrap Note Holders") failed to
provide any relief.

The Partnership emerged from bankruptcy on May 15, 1990,
having negotiated a modification of its debt with its major
creditors. In June 1989 an affiliate of the individual General
Partner provided $401,910.77 to bring the Aetna notes current. At
the same time the Wrap Note Holders agreed to reduced the
payments due on their respective wrap notes in order to mirror
the payments made on the underlying Aetna notes. The term of each
wrap note will be extended from July 31, 1995 to July 1, 2002 and
July 1, 2007 respectively. The $401,910.77 note is collateralized
by junior mortgage on the property. In addition, the affiliate
has the option to purchase the wrap notes for $85,000 at any time
prior to the respective maturity dates of the wrap notes.

Commencing on July 1,1992, payments on the notes reverted to
the original amounts of $19,442 and $15,454. During the prior two
years the Partnership deferred $214,460 in debit service
payments. The modification gave the Partnership room to deal
with the economic difficulties experienced in the market at the
time.

In February 1991, Amrecorp Realty Inc. resigned as the
Managing General Partner of the Partnership. As was communicated
to all limited partners, this step was taken in order to minimize
any effect that Amrecorp's financial difficulties might have on
the partnership. Management of the Partnership's assets is
performed by Univesco, Inc., a Texas corporation, Robert J.
Werra, CEO.

On November 12, 1993 the Partnership refinanced the
properties secured debt with an 8.15%, ten year, mortgage loan
from Lexington Mortgage Company. The $3,250,000 mortgage loan
provides for monthly payments of $415,000 based on an amortized
schedule of 300 months with a final payment of the entire
remaining principal balance in December 2003. The proceeds of
this new loan were used to pay off the $2,500,000 and $2,300,000
mortgage notes which previously held the first mortgage position.
The old first mortgagee provided a discount of approximately ten
percent of the outstanding principal balances of two old notes.
The balance of funds needed to retire the old notes
(approximately $100,000) was provided by Robert J. Werra. In
addition Robert J. Werra exercised his option in the property's
wrap mortgage notes. The new lender prohibited subordinate debt.
To meet this requirement the subordinate debt held by Mr. Werra
was converted to a class of equity with the same terms and
conditions as it possessed as debt. The wrap mortgage lender
would not agree to the change in status so Mr. Werra paid $85,000
to complete his purchase of the wrap notes and now holds an
equity position in the partnership as a Special Limited partner.

The partnership agreement was amended by vote of the limited
partners to include the appointment of a new corporate general
partner, LBAL, Inc., a Texas corporation wholly owned by Robert
J. Werra.

While it is the General Partners primary intention to
operate and manage the existing real estate investment, the
General Partner also continually evaluates this investment in
light of current economic conditions and trends to determine if
this asset should be considered for disposal. At this time, there
is no plan to dispose of Las Brisas Apartments.

As of June 30, 2004, the Partnership had $31,136 in cash and
cash equivalents as compared to $19,115 as of December 31, 2003.
The net increase in cash of $12,021was cash flow from operations.

The property is encumbered by a non-recourse mortgage with a
principal balance of $3,967,836 as of June 30, 2004. During the
year ended December 31, 2001, the Partnership refinanced the
mortgage payable. The mortgage payable bears interest at a rate
of 6.18% and is payable in monthly installments of principal and
interest of $25,058 through December 2011, at which time a lump
sum payment of approximately $3,447,000 is due. This mortgage
note is secured by real estate with a net book value of
$3,169,117.

For the foreseeable future, the Partnership anticipates that
mortgage principal payments (excluding balloon mortgage
payments), improvements and capital expenditures will be funded
by net cash from operations. The primary source of capital to
fund future Partnership acquisitions and balloon mortgage
payments will be proceeds from the sale financing or refinancing
of the Property.

The special limited partner distribution preference arises
from a preferred return on certain special limited partnership
contributions made in prior years in conjunction with the
refinancing of the mortgage debt. The total unpaid amount due to
the special limited partners at June 30, 2004 is approximately
$2,210,000 of which $878,000 is the remaining distribution
preference and $1,332,000 is the original contribution. Any
additional available cash will then be distributed in accordance
with the partnership agreement. During 2004, 2003, and 2002,
distributions of $50,000, $110,000, and $523,560, respectively,
were made to the special limited partners in accordance with this
agreement.


PART II
Other Information
Item 1. Legal Proceedings.
None

Item 2. Changes in Securities.
None

Item 3. Defaults upon Senior Securities.
None

Item 4. Submission of Matters to a vote of Security Holders.
None

Item 5. Other Information.
None

Item 6. Exhibits and Reports on Form 8-K.

(A) The following documents are filed herewith or incorporated
herein by reference as indicated as Exhibits:

Exhibit Designation Document Description

3 Certificate of Limited Partnership,
Incorporated by reference to
Registration Statement No. 33-
00152 Effective November 26, 1985.

4 Certificate of Limited Partnership,
Incorporated by reference to
Registration Statement No. 33-
00152 Effective November 26, 1985

9 Not Applicable.
10 None.
11 Not Applicable.
12 Not Applicable.
13 Not Applicable.
18 Not Applicable.
19 Not Applicable.
22 Not Applicable.
23 Not Applicable.
24 Not Applicable.
25 Power of Attorney,
Incorporated by reference to
Registration Statement No. 33-
00152
Effective November 26, 1985
28 None.
31.1 Certification Pursuant to
Rules 13a-14 and 15d-14 Under
the Securities Exchange Act of
1934, as Adopted Pursuant to
Section 302 of the Sarbanes-
Oxley Act of 2002, filed
herewith.

32.1 Certification Pursuant to 18
U.S.C. Section 1350, as
Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act
of 2002, filed herewith.

(B) Reports on form 8-K for quarter ended June 30, 2004.
1. None


SIGNATURES


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.


AMRECORP REALTY FUND III
A Texas limited partnership



By: /s/ Robert J. Werra
Robert J. Werra,
General Partner






Date: July 29, 2004

Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I Robert J. Werra, Acting Principal Executive Officer and Chief
Financial of Amrecorp Realty Fund III ("the Company"), certify
that:


1. I have reviewed this quarterly report on Form 10-Q of the
Company;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
made, in light of the circumstances under which such
statements were made, not misleading with respect to the
period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly
report, fairly present in all material respects the
financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented
in this quarterly report;

4. I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the Company and
have:

a. designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under my supervision, to ensure that material
information relating to the company and its consolidated
subsidiaries is made known to me by others within those
entities, particularly for the periods presented in this
quarterly report;

b. designed such internal control over financial reporting,
or caused such internal control over financial reporting
to be designed under my supervision, to provide
reasonable assurance regarding the reliability of
financial reporting and the preparation of financial
statements for external purposes in accordance with
generally accepted accounting principles.

c. evaluated the effectiveness of the Company's disclosure
controls and procedures and presented in this report my
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period
covered by this report based on such evaluation; and



CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - continued


d. disclosed in this report any change in the Company's
internal control over financial reporting that occurred
during the Company's most recent fiscal quarter that
has materially affected, or is reasonably likely to
materially affect, the Company's internal control over
financial reporting; and


5. I have disclosed based on my most recent evaluation of
internal control over financial reporting, to the
Company's auditors and Audit Committee of the Board of
Directors (or persons fulfilling the equivalent
function):

a. all significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
adversely affect the Company's ability to record,
process, summarize, and report financial data; and

b. any fraud, whether or not material, that involves
management or other employees who have a significant
role in the Company's internal control over financial
reporting.




/s/ Robert J. Werra


Robert J. Werra
Acting Principal Executive Officer and Chief Financial
Officer
July 29, 2004







Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Amrecorp Realty
Fund III ("the Company") on Form 10-Q for the period ending
June 30, 2004 as filed with the Securities and Exchange
Commission on the date hereof ("the Report"), I, Robert J.
Werra, Acting Principal Executive Officer and Chief
Financial Officer of the Company, certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-
Oxley Act of 2002, that:

(1) The report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended; and

(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of the Company.



/s/ Robert J. Werra


Robert J. Werra
Acting Principal Executive Officer and Chief Financial
Officer
July 29, 2004