8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

                                 April 11, 2000
                Date of Report (Date of Earliest Event Reported)


                       Sierra Pacific Development Fund III

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             (Exact Name of Registrant as Specified in its Charter)


California                           0-14276                          33-0043953
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(State or Other                    (Commission                  (I.R.S. Employer
Jurisdiction of                   File Number)                    Identification
incorporation)                                                              No.)





                 5850 San Felipe - Suite 500, Houston, TX 77057

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               (Address of Principal Executive Offices) (Zip Code)



              (Registrant's Telephone Number, Including Area Code)

                                 (713) 977-6171

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          (Former Name or Former Address, If Changed Since Last Report)



940774.1






ITEM 4.  Changes in Registrant's Certifying Accountant

         (a) On April 11, 2000, the Registrant  dismissed  Deloitte & Touche LLP
("D&T") as its  independent  auditors.  The  reports of D&T on the  Registrant's
financial  statements  for the fiscal years ended December 31, 1999 and 1998 did
not contain an adverse opinion,  or disclaimer of opinion and were not qualified
or modified as to uncertainty,  audit scope or accounting principles except that
the report for both years  contained a paragraph  stating that the  Registrant's
reduced  operations,  capital  deficiency  and lack of  funds  to pay  operating
expenses  raised  substantial  doubt as to its  ability to  continue  as a going
concern.  The  Registrant's  managing  general partner  approved the decision to
change  accountants.  During the  Registrant's  two most recent fiscal years and
subsequent interim periods,  there we no disagreements with D&T on any matter of
accounting  principles or practices,  financial statement disclosure or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
D&T would have caused it to make reference to such disagreement in its reports.

         (b) The  Registrant  engaged  Arthur  Andersen LLP ("AA") to act as its
independent  auditors,  effective  April 11,  2000.  During the two most  recent
fiscal years and subsequent interim periods, the Registrant has not consulted AA
on items which (1)  involved  the  application  of  accounting  principles  to a
specified  transaction,  either  completed or proposed,  or involved the type of
audit opinion that might be rendered on the Registrant's  financial  statements,
or (2) concerned the subject matter of a disagreement or a reportable event with
Registrant's former accountant.

ITEM 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

         (a)      Not Applicable

         (b)      Not Applicable

         (c)      Exhibits

         16.1.    Letter from Deloitte & Touche LLP, dated April 17, 2000
                  addressed to the Securities and Exchange Commission in
                  compliance with Item 304 of Regulation S-K.


940774.1
                                        2





                                   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 hereunto duly authorized.

                            SIERRA PACIFIC DEVELOPMENT FUND III



                            By:/s/ William J. Carden
                               -------------------------------
                               Name:  William J. Carden
                               Title: Chairman of the Board of Directors
                                      and Chief Executive Officer



Date:    April 17, 2000


940774.1
                                        3




                                  EXHIBIT INDEX

Exhibit No.                         Description
- -----------                         -----------
16.1                                Letter from Deloitte & Touche LLP, dated
                                    April 17, 2000 addressed to the Securities
                                    and Exchange Commission in compliance with
                                    Item 304 of Regulation S-K.


940774.1

EX-16.1

                                                                    Exhibit 16.1



April 17, 2000


Securities and Exchange Commission
Mail Stop 11-3
450 5th Street, N.W.
Washington, D.C. 20549

Dear Sirs/Madams:

We have  read and  agree  with the  comments  in Item 4(a) of Form 8-K of Sierra
Pacific Development Fund III dated April 11, 2000.

Yours truly,


Deloitte & Touche LLP
Houston, Texas