July 31, 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  June  30,  1999.  The  following  is  Management's
discussion  and  analysis  of  the  Partnership's  financial  condition  and
results  of  its  operations.

For the three month  period  ended  June 30, 1999, and  1998, total  revenues
increased 4.2% from $535,517 to $557,813 and total expenses increased 3.1%
from $376,519 to $388,033.  As a result, net income increased 6.8% from
$158,998 for the three-month period ended June 30, 1998, to $169,780 for the
same period in 1999.  Rental revenue increased as a result of higher unit
rental rates.  Operating expenses increased approximately $9,100 (2.8%)
primarily as a result of relatively insignificant fluctuations in various
expense accounts.  General and administrative expneses remained constant.
Occupancy levels for the Partnership's six mini-storage facilities averaged
85.9% for the three-month period ended June 30, 1999, and 89.2% for the same
period in 1998.  The Partnership is continuing its marketing efforts to attract
andk keep new tenants in its various mini-storage facilities.

For the six month  periods  ended  June  30, 1999, and 1998,  total  revenues
increased 4.7% from $1,059,947 to $1,109,545 and total expenses increased 4.1%
from $755,768 to $786,970.  As a result, net income increased 6.0% from
$304,179 for the six months ended June 30, 1998, to $322,575 for the same
period in 1999.  Rental revenue increased primarily as a result of higher
unit rental rates during the six-month period.  Operating expenses increased
approximately $33,000 (5.2%) primarily due to increases in maintenance and
repair, salaries and wage expenses and propterty management fees.  Property
management fees, which are based on rental income, increased as a result of
the increase in rental revenue.  General and administrative expenses remained
constant.

The General Partners will continue their  policy of  funding improvements
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.

The Year 2000 issue refers to the inability of certain computer systems to
recognize a date using "00" as the Year 2000.  The Partnership has implemented
a Year 2000 program, which has three phases: (1) identification; (2)
remediation; and (3) testing and verification.  The Partnership, as well as
the property management company and the Partnership's warehouse facilities
have completed those phases.  Computer programs have been upgraded and tested
to function properly with respect to the dates in the Year 2000 and thereafter.
Year 2000 compliance costs are nominal and have been expnesed in the regular
course of business.  The Partnership provides no assurance that third-party
suppliers and customers will be compliant.  Nevertheless, the Partnership
does not believe that the Year 2000 issue will have a material adverse effect
on its financial condition or results of operations.

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