April 30, 1999

		QUARTERLY REPORT TO THE LIMITED PARTNERS
			OF DSI REALTY INCOME FUND VII


DEAR LIMITED PARTNERS:

We are pleased to enclose the  Partnership's  unaudited financial statements 
for  the  period  ended  March  31,  1999.  The  following  is  Management's 
discussion  and  analysis  of  the  Partnership's  financial  condition  and 
results  of  its  operations.

For the  three month  periods  ended  March 31, 1999 and 1998, total revenues 
increased 5.2% from $524,430 to $551,732 and total expenses increased 6.0% 
from $376,249 to $398,937.  As a result, net income increased 3.1% from 
$148,181 for the three month period ended March 31, 1998, to $152,795 for the
same period in 1999.  Occupancy levels for the Partnership's six mini-storage
facilities averaged 83.5% for the three month period ended March 31, 1999,
and 84.6% for the same period in 1998.  Rental revenue increased primarily as
a result of higher unit rental rates.  The Partnership is continuing its
marketing effort to attract and keep new tenants in its various mini-storage 
facilities.  Operating expenses increased approximately $23,900 (7.7%) 
primarily as a result of increases in repairs and maintenance, real estate 
tax and salaries and wage expenses.  General and administrative expenses 
remained relatively constant.

The General Partners will continue their  policy of  funding the  continuing
improvement and  maintenance of  Partnership  properties with cash generated 
from operations.  The Partnership's financial resources appear to be adequate
to meet its needs.  The  General  Partners  anticipate  distributions to the
Limited Partners to remain at the current level for the foreseeable future.

We are not enclosing a copy of the Partnership Form 10-Q as filed with the 
Securities  and  Exchange  Commission  since all the information set forth 
therein is contained  either in this  letter or in the  attached  financial 
statements.  However, if you wish to  receive a copy of said report, please 
send a  written  request to  DSI  Realty  Income  Fund  VII,  P.O.  Box 357, 
Long  Beach,  California  90801. 

                              Very truly yours,
 
                              DSI REALTY INCOME FUND VII
                              By: DSI Properties, Inc., as
                              General Partner



                              By  /s/ Robert J. Conway
                                  ____________________________
                                  ROBERT J. CONWAY, President