UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM N-CSR


                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                        MANAGEMENT INVESTMENT COMPANIES


Investment Company Act file number 811-21189
                                   ---------


                    PIMCO New York Municipal Income Fund III
               --------------------------------------------------
               (Exact name of registrant as specified in charter)


              1345 Avenue of the Americas, New York, New York 10105
              -----------------------------------------------------
               (Address of principal executive offices) (Zip code)


  Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105
  -----------------------------------------------------------------------------
                     (Name and address of agent for service)


Registrant's telephone number, including area code: 212-739-3371
                                                    ------------

Date of fiscal year end: September 30, 2005
                         ------------------


Date of reporting period: March 31, 2006
                          --------------

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.


A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.



ITEM 1. REPORT TO SHAREHOLDERS

PIMCO Municipal Income Fund III
PIMCO California Municipal Income Fund III
PIMCO New York Municipal Income Fund III
Semi-Annual Report
March 31, 2006

Contents

Letter to Shareholders 1
Performance & Statistics 2-4
Schedules of Investments 5-23
Statements of Assets and Liabilities 24
Statements of Operations 25
Statements of Changes in Net Assets 26-27
Notes to Financial Statements 28-33
Financial Highlights 34-36
Annual Shareholder Meetings Results 37



Table of Contents

May 5, 2006

Dear Shareholder:

We are pleased to provide you with the semi-annual report for PIMCO Municipal Income Fund III, PIMCO California Municipal Income Fund III and PIMCO New York Municipal Income Fund III (the "Funds") for the six months ended March 31, 2006.

For the six-month period, the national municipal bond market posted positive returns, with the Lehman Brothers Municipal Bond Index returning 0.98% despite four 0.25% rate increases by the Federal Reserve. The California municipal bond market also recorded positive returns, outperforming the national municipal market. The Lehman Brothers California Insured Municipal Bond Index returned 1.22%. New York municipals also outperformed the broader market, with the Lehman Brothers New York Insured Municipal Bond Index returning 1.16% for the period. During the reporting period, the municipal yield curve flattened, with short-term rates climbing higher than long-term rates. This was also the case for the California and New York municipal yield curves.

For the six months ended March 31, 2006, PIMCO Municipal Income Fund III returned 3.30% on net asset value and (1.80)% on market price. PIMCO California Municipal Income Fund III returned 2.50% on net asset value and 8.69% on market price. PIMCO New York Municipal Income Fund III returned 2.13% on net asset value and (3.07)% on market price.

Please review the following pages for specific information on the Funds. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds' shareholder servicing agent at (800) 331-1710. You will also find a wide range of information and resources on our Web site, www.allianzinvestors.com/closedendfunds.

Together with Allianz Global Investors Fund Management LLC, the Funds' investment manager, and Pacific Investment Management Company LLC, the Funds' sub-adviser, we thank you for investing with us.

We remain dedicated to serving your investment needs.

Sincerely,

Robert E. Connor

Chairman

Brian S. Shlissel

President & Chief Executive Officer

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 1




Table of Contents

PIMCO Municipal Income Fund III  
Performance & Statistics

March 31, 2006 (unaudited)


Symbol:

PMX

Objective:

To provide income exempt from federal income tax.

Primary Investments:

Municipal fixed-income securities, the interest from which is exempt from federal income tax.

Inception Date:

October 31, 2002

Total Net Assets(1):

$728.8 million

Portfolio Manager:

Mark McCray


Total Return(2): Market Price Net Asset Value (‘‘NAV’’)
Six months (1.80)% 3.30%
1 Year 10.01% 7.15%
Commencement of Operations (10/31/02) to 3/31/06 6.28% 7.59%

Common Share Market Price / NAV Performance:

Commencement of Operations (10/31/02) to 3/31/06


Market Price / NAV:  
Market Price $14.73
NAV $14.68
Premium to NAV 0.34%
Market Price Yield(3) 5.70%

Moody's Ratings
(as a % of total investments)

(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends have been reinvested at prices obtained under the Fund's dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more than one year represents the average annual total return.
An investment in the Fund involves risk, including the loss of principal. Total return, price, yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. A portion of the income generated by the Fund may be subject to federal, state and local taxes, and may at times be subject to the alternative minimum tax. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is total assets applicable to common shareholders less total liabilities divided by the number of common shares outstanding. Holdings are subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly per share dividend to common shareholders by the market price per common share at March 31, 2006.

2 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO California Municipal Income Fund III 
Performance & Statistics

March 31, 2006 (unaudited)


Symbol:

PZC

Objective:

To provide current income exempt from federal and California state income tax.

Primary Investments:

Municipal fixed-income securities, the interest from which is exempt from federal and California state income tax.

Inception Date:

October 31, 2002

Total Net Assets(1):

$499.2 million

Portfolio Manager:

Mark McCray


Total Return(2): Market Price Net Asset Value (‘‘NAV’’)
Six months 8.69% 2.50%
1 Year 20.13% 7.33%
Commencement of Operations (10/31/02) to 3/31/06 8.60% 7.49%

Common Share Market Price / NAV Performance:

Commencement of Operations (10/31/02) to 3/31/06


Market Price / NAV:  
Market Price $15.90
NAV $14.68
Premium to NAV 8.31%
Market Price Yield(3) 6.04%

Moody's Ratings
(as a % of total investments)

(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends have been reinvested at prices obtained under the Fund's dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more than one year represents the average annual total return.
An investment in the Fund involves risk, including the loss of principal. Total return, price, yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. A portion of the income generated by the Fund may be subject to federal, state and local taxes, and may at times be subject to the alternative minimum tax. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is total assets applicable to common shareholders less total liabilities divided by the number of common shares outstanding. Holdings are subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly per share dividend to common shareholders by the market price per common share at March 31, 2006.

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 3




Table of Contents

PIMCO New York Municipal Income Fund III 
Performance & Statistics

March 31, 2006 (unaudited)


Symbol:

PYN

Objective:

To provide current income exempt from federal, New York state and New York City income tax.

Primary Investments:

Municipal fixed-income securities, the interest from which is exempt from federal, New York state and New York City income tax.

Inception Date:

October 31, 2002

Total Net Assets(1):

$128.5 million

Portfolio Manager:

Mark McCray


Total Return(2): Market Price Net Asset Value (‘‘NAV’’)
Six months (3.07)% 2.13%
1 Year 13.27% 5.07%
Commencement of Operations (10/31/02) to 3/31/06 6.74% 7.71%

Common Share Market Price / NAV Performance:

Commencement of Operations (10/31/02) to 3/31/06


Market Price / NAV:  
Market Price $15.08
NAV $14.88
Premium to NAV 1.34%
Market Price Yield(3) 5.57%

Moody's Ratings
(as a % of total investments)

(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) Past performance is no guarantee of future results. Total return is calculated by subtracting the value of an investment in the Fund at the beginning of each specified period from the value at the end of the period and dividing the remainder by the value of the investment at the beginning of the period and expressing the result as a percentage. The calculation assumes that all income dividends have been reinvested at prices obtained under the Fund's dividend reinvestment plan. Total return does not reflect broker commissions or sales charges. Total return for a period more than one year represents the average annual total return.
An investment in the Fund involves risk, including the loss of principal. Total return, price, yield and net asset value will fluctuate with changes in market conditions. This data is provided for information only and is not intended for trading purposes. A portion of the income generated by the Fund may be subject to federal, state and local taxes, and may at times be subject to the alternative minimum tax. Closed-end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Net asset value is total assets applicable to common shareholders less total liabilities divided by the number of common shares outstanding. Holdings are subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current monthly per share dividend to common shareholders by the market price per common share at March 31, 2006.

4 PIMCO Municipal Income Funds III Semi-Annual Report  | 3.31.06




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value

MUNICIPAL BONDS & NOTES–89.3%

 
 

Alabama–1.4%

   
  Birmingham, GO, Ser. B (AMBAC),    
$  1,000 5.00%, 12/1/27 Aaa/AAA $1,027,270
2,560 5.00%, 12/1/32 Aaa/AAA 2,625,357
5,000 Birmingham Baptist Medical Centers Special Care Facs.
Financing Auth. Rev., 5.00%, 11/15/30, Ser. A
Baa1/NR 4,888,950
1,500 Colbert Cnty., Northwest Health Care Auth., Health Care Facs. Rev., 5.75%, 6/1/27 Baa3/NR 1,496,235
      10,037,812
 

Alaska–0.7%

   
  State Housing Finance Corp. Rev.,    
3,900 5.00%, 12/1/33, Ser. A Aaa/AAA 3,947,346
1,000 5.25%, 6/1/32, Ser. C (MBIA) Aaa/AAA 1,007,410
      4,954,756
 

Arizona–0.6%

   
2,200 Health Facs. Auth. John C. Lincoln Health Network Rev.,
7.00%, 12/1/25, (Pre-refunded @ $102, 12/01/10) (a)
NR/BBB 2,533,564
1,500 Maricopa Cnty. Pollution Control Corp., Pollution Control Rev.,
5.05%, 5/1/29 (AMBAC)
Aaa/AAA 1,552,470
      4,086,034
 

California–7.9%

   
1,000 Alameda Public Financing Auth. Rev., 7.00%, 6/1/09 NR/NR 1,000,480
2,000 Chula Vista Community Facs. Dist., Special Tax, 5.25%, 9/1/30 NR/NR 1,999,900
  Golden State Tobacco Securitization Corp., Tobacco Settlement Rev., Ser. 2003-A-1,    
27,585 6.25%, 6/1/33 Baa3/BBB 30,085,580
21,000 6.75%, 6/1/39 Baa3/BBB 23,643,060
      56,729,020
 

Colorado–2.6%

   
  El Paso Cnty., CP (AMBAC),    
1,735 5.00%, 12/1/23, Ser. A Aaa/AAA 1,800,479
1,725 5.00%, 12/1/23, Ser. B Aaa/AAA 1,790,102
2,820 5.00%, 12/1/27, Ser. A Aaa/AAA 2,913,257
1,500 5.00%, 12/1/27, Ser. B Aaa/AAA 1,549,605
1,500 Garfield Cnty. School Dist. Re-2, GO, 5.00%, 12/1/25 (FSA) Aaa/NR 1,553,985
2,000 La Plata Cnty. School Dist. No. 9-R, Durango, GO,
5.25%, 11/1/25 (MBIA) (Pre-refunded @ $100, 11/1/12) (a)
Aaa/NR 2,161,160
4,000 Saddle Rock Met. Dist., GO, 5.35%, 12/1/31 (Radian) NR/AA 4,103,600
2,500 School Mines Auxiliary Facs. Rev., 5.00%, 12/1/37 (AMBAC) Aaa/AAA 2,565,275
      18,437,463

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 5




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Florida–6.5%

   
$  3,480 Brevard Cnty. Health Facs. Auth. Rev., 5.00%, 4/1/34 A2/A $3,531,922
8,000 Highlands Cnty. Health Facs. Auth. Rev., Adventist Health System,
5.25%, 11/15/23, Ser. B
A2/A+ 8,297,760
2,500 Hillsborough Cnty. Industrial Dev. Auth. Rev., Tampa
General Hospital, 5.25%, 10/1/34, Ser. B
A3/NR 2,573,225
1,485 Julington Creek Plantation Community Dev. Dist., Special Assessment Rev., 5.00%, 5/1/29 (MBIA) Aaa/AAA 1,538,594
1,000 Orange Cnty. Housing Finance Auth. Multifamily Rev., Palm Grove Gardens, 5.25%, 1/1/28, Ser. G Aaa/NR 1,022,680
15,000 Pinellas Cnty. Health Facs. Auth. Rev., Baycare Health,
5.50%, 11/15/33
Aa3/NR 15,717,450
7,500 South Miami Health Facs. Auth., Hospital Rev., Baptist Health, 5.25%, 11/15/33 Aa3/AA− 7,733,475
5,615 Tampa, Water & Sewer Rev., 5.00%, 10/1/26, Ser. A Aa2/AA 5,793,781
      46,208,887
 

Georgia–0.6%

   
4,000 Griffin Combined Public Utility Rev., 5.00%, 1/1/32 (AMBAC) Aaa/AAA 4,163,440
 

Idaho–1.0%

   
  State Building Auth. Building Rev., Ser. A (XLCA),    
1,000 5.00%, 9/1/33 Aaa/AAA 1,031,150
5,750 5.00%, 9/1/43 Aaa/AAA 5,915,370
      6,946,520
 

Illinois–8.2%

2,250 Chicago, GO, 5.00%, 1/1/31, Ser. A (MBIA) Aaa/AAA 2,310,772
  Chicago, Lake Shore East, Special Assessment,    
1,600 6.625%, 12/1/22 NR/NR 1,718,560
3,456 6.75%, 12/1/32 NR/NR 3,717,827
5,000 Chicago Board of Education, GO, 5.00%, 12/1/31, Ser. C (FSA)
(Pre-refunded @ $100,12/1/11) (a)
Aaa/AAA 5,310,350
500 Chicago Board of Education School Reform, GO, zero coupon,
12/1/28, Ser. A (FGIC)
Aaa/AAA 168,460
3,000 Chicago Kingsbury Redev. Project, Tax Allocation, 6.57%,
2/15/13, Ser. A
NR/NR 3,096,930
7,000 Chicago Motor Fuel Tax Rev., 5.00%, 1/1/33, Ser. A (AMBAC) Aaa/AAA 7,205,030
4,000 Chicago Park Dist., GO, 5.00%, 1/1/29, Ser. D (FGIC) Aaa/AAA 4,095,880
2,500 Chicago Water Rev., 5.00%, 11/1/31 (AMBAC) (Pre-refunded
@ $100, 11/1/11) (a)
Aaa/AAA 2,646,725
  Educational Facs. Auth. Rev., Univ. of Chicago,    
4,780 5.00%, 7/1/33 Aa1/AA 4,922,970
220 5.00%, 7/1/33, (Pre-refunded @ $100, 7/1/13) (a) Aa1/AA 234,694
165 5.25%, 7/1/41 Aa1/AA 172,842
4,160 5.25%, 7/1/41, (Pre-refunded @ $101, 7/1/11) (a) Aa1/AA 4,484,350
9,045 Metropolitan Pier & Exposition Auth., Dedicated State Tax Rev.,
McCormick Place Expansion, 5.25%, 6/15/42 (MBIA)
Aaa/AAA 9,519,862

6 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Illinois–(continued)

$  4,300 Round Lake, Special Tax Rev., 6.70%, 3/1/33 NR/NR $  4,412,574
1,175 State Health Facs. Auth. Rev., Elmhurst Memorial Healthcare, 5.50%, 1/1/22 A2/NR 1,227,288
3,050 Univ. Rev., 5.00%, 4/1/30, Ser. A (AMBAC) Aaa/AAA 3,122,926
      58,368,040
 

Indiana–3.6%

   
7,535 Bond Bank Rev., 5.00%, 2/1/33, Ser. A (FSA) Aaa/AAA 7,734,226
3,000 Brownsburg 1999 School Building Corp. Rev., 5.25%, 3/15/25, Ser. A (FSA) (Pre-refunded @ $100, 9/15/13) (a) Aaa/AAA 3,253,380
1,375 Fort Wayne Pollution Control Rev., 6.20%, 10/15/25 B2/B 1,106,009
5,000 Indianapolis Local Public Improvement Board, Tax Allocation,
5.00%, 2/1/29, Ser. G (MBIA)
Aaa/AAA 5,142,200
  Michigan City Area Wide School Building Corp., Rev. (FGIC),    
2,500 zero coupon, 1/15/21 Aaa/AAA 1,267,425
1,000 zero coupon, 7/15/21 Aaa/AAA 495,450
1,000 zero coupon, 1/15/22 Aaa/AAA 481,960
1,000 Plainfield Parks Facs. Corp. Lease Rent Rev., 5.00%, 1/15/22 (AMBAC) Aaa/AAA 1,036,950
  Portage Industrial Economic Dev. Rev. (c),    
1,000 5.00%, 7/15/23 NR/BBB+ 999,920
775 5.00%, 1/15/27 NR/BBB+ 770,086
3,500 State Dev. Finance Auth. Pollution Control Rev., 5.00%,
3/1/30 (AMBAC)
Aaa/AAA 3,506,685
      25,794,291
 

Iowa–1.6%

   
1,000 Tobacco Settlement Auth., Tobacco Settlement Rev.,
5.60%, 6/1/35, Ser. B, (Pre-refunded @ $101, 6/1/11) (a)
Baa3/AAA 1,088,310
11,010 Tobacco Settlement Auth. of Iowa Rev., zero coupon,
6/1/34, Ser. B
Baa3/BBB 10,237,759
      11,326,069
 

Kentucky–0.9%

   
  Economic Dev. Finance Auth. Hospital Facs. Rev.,    
1,000 Catholic Healthcare Partners, 5.25%, 10/1/30 Aa3/AA− 1,031,580
4,600 St. Luke's Hospital, 6.00%, 10/1/19 A3/A 5,094,270
      6,125,850
 

Louisiana–0.9%

   
5,000 Public Facs. Auth. Rev., Ochsner Clinic Foundation, 5.50%, 5/15/32, Ser. B A3/NR 5,076,050
1,595 Tobacco Settlement Financing Corp. Rev., 5.875%, 5/15/39,
Ser. 2001B
Baa3/BBB 1,683,586
      6,759,636

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 7




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Maryland–0.2%

   
$  1,500 State Health & Higher Educational Facs. Auth. Rev., Calvert Health Systems, 5.50%, 7/1/36 A2/NR $  1,578,975
 

Massachusetts–3.4%

   
1,000 State Dev. Finance Agcy. Rev., 5.75%, 7/1/33, Ser. C Baa1/BBB 1,056,270
7,000 State Health & Educational Facs. Auth. Rev., Harvard Univ.,
5.125%, 7/15/37, Ser. FF
Aaa/AAA 7,290,850
4,910 State Housing Finance Agcy., Housing Rev., 5.125%, 6/1/43, Ser. H Aa3/AA− 4,965,925
3,225 State Water Pollution Abatement Trust, 5.00%, 8/1/32, Ser. 8 Aaa/AAA 3,325,201
7,555 State Water Res. Auth. Rev., 5.00%, 8/1/32, Ser. J (FSA) Aaa/AAA 7,756,189
      24,394,435
 

Michigan–7.1%

   
12,240 Detroit Water Supply System, 5.00%, 7/1/34, Ser. B (MBIA) Aaa/AAA 12,674,887
5,000 State Building Auth., Rev., 5.00%, 10/15/26, Ser. III (FSA) Aaa/AAA 5,182,900
  State Hospital Finance Auth. Rev.,    
175 Detroit Medical Center, 5.25%, 8/15/23 Ba3/BB− 159,019
4,000 Henry Ford Health System, 5.00%, 3/1/17 A1/A 4,112,640
  Oakwood Group, Ser. A,    
5,405 5.75%, 4/1/32 A2/A 5,670,818
575 6.00%, 4/1/22 A2/A 620,511
20,000 Trinity Health Credit, 5.375%, 12/1/30 Aa3/AA− 20,890,400
1,000 State Technical Univ., 5.00%, 10/1/33 (XLCA) Aaa/AAA 1,029,090
      50,340,265
 

Minnesota–0.3%

   
2,400 Upsala Independent School Dist. No. 487, GO, 5.00%, 2/1/28 (FGIC) Aaa/AAA 2,492,520
 

Mississippi–0.6%

   
  Business Finance Corp., Pollution Control Rev.,    
3,000 5.875%, 4/1/22 Ba1/BBB− 3,028,680
1,250 5.90%, 5/1/22 Ba1/BBB− 1,263,825
      4,292,505
 

Missouri–3.0%

   
4,000 Bi-State Dev. Agcy. Rev., Missouri Illinois Met. Dist., 5.00%, 10/1/32 (FSA) Aaa/AAA 4,141,360
1,350 St. Louis Cnty. Industrial Dev. Auth., Housing Dev. Rev., 5.20%, 1/20/36 (GNMA) NR/AAA 1,371,492
  St. Louis Industrial Dev. Auth. Rev. (GNMA),    
1,500 5.125%, 12/20/29 NR/AAA 1,533,180
1,500 5.125%, 12/20/30 NR/AAA 1,524,555
4,365 State Environmental Impt. & Energy Resources Auth., Water
Pollution Control Rev., 5.00%, 7/1/23, Ser. B
Aaa/NR 4,560,028
7,500 State Health & Educational Facs. Auth., Health Facs.,
St. Anthony's Medical Center, 6.25%, 12/1/30, (Pre-refunded
@ $101, 12/01/10) (a)
A2/A 8,353,425
      21,484,040

8 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Montana–1.6%

   
$11,250 Forsyth Pollution Control Rev., Puget Sound Energy, 5.00%,
3/1/31 (AMBAC)
Aaa/AAA $  11,680,875
 

Nevada–0.6%

   
3,355 Henderson Health Care Fac. Rev., Catholic Healthcare West,
5.125%, 7/1/28
A3/A− 3,356,610
945 Henderson Local Impt. Dists., Special Assessment, 5.80%, 3/1/23 NR/NR 975,741
      4,332,351
 

New Hampshire–0.7%

   
  Manchester Water Works Rev. (FGIC),    
1,500 5.00%, 12/1/28 Aaa/AAA 1,558,860
3,250 5.00%, 12/1/34 Aaa/AAA 3,358,323
      4,917,183
 

New Jersey–4.8%

   
1,000 Camden Cnty., Improvement Auth., 5.00%, 2/15/35, Ser. A Baa3/BBB 984,910
1,540 Camden Cnty., Improvement Auth. Rev., Cooper Health System,
6.00%, 2/15/27, (Pre-refunded @ $102, 2/15/07) (a)
Baa3/BBB 1,600,183
  Economic Dev. Auth.,    
4,500 Kapkowski Rd. Landfill, 6.50%, 4/1/28 Baa3/NR 5,317,605
300 Newark Airport, 7.00%, 10/1/14 Ba3/NR 306,927
  Health Care Facs. Financing Auth. Rev.,    
2,500 Middlesex Cnty. Pollution Control Auth., Rev., 5.75%, 9/15/32 Ba1/BBB− 2,641,575
3,000 Pascack Valley Hospital, 6.625%, 7/1/36 NR/B+ 3,073,080
2,000 Somerset Medical Center, 5.50%, 7/1/33 Baa3/NR 2,012,860
2,000 South Port Corp., Rev., 5.10%, 1/1/33 NR/A 2,054,680
1,500 State Educational Facs. Auth. Rev., 6.00%, 7/1/25, Ser. D NR/NR 1,630,815
  Tobacco Settlement Financing Corp. Rev.,    
525 6.00%, 6/1/37 Baa3/BBB 550,783
1,000 6.125%, 6/1/24 Baa3/BBB 1,081,260
230 6.125%, 6/1/42 Baa3/BBB 242,178
350 6.25%, 6/1/43 Baa3/BBB 379,519
10,750 6.75%, 6/1/39 Baa3/BBB 12,026,670
      33,903,045
 

New Mexico–0.1%

   
1,000 Farmington Pollution Control Rev., 5.80%, 4/1/22 Baa2/BBB 1,015,210
 

New York–5.5%

10,000 Metropolitan Transportation Auth. Rev., 5.25%, 11/15/32, Ser. B A2/A 10,550,900
  New York City Municipal Water Finance Auth., Water & Sewer
System Rev.,
   
5,000 5.00%, 6/15/35, Ser. C Aa2/AA+ 5,152,150
1,500 5.00%, 6/15/39, Ser. A Aa2/AA+ 1,544,610

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 9




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

New York–(continued)

  State Dormitory Auth. Rev.,    
$4,000 Saint Barnabas Hospital, 5.125%, 2/1/22, Ser. A (FHA-AMBAC) Aaa/AAA $4,207,880
11,590 Sloan-Kettering Center Memorial, 5.00%, 7/1/34, Ser. 1 Aa2/AA 11,857,497
3,800 State Personal Income Tax, 5.00%, 3/15/32, (Pre-refunded
@ $100, 3/15/13) (a)
A1/AAA 4,052,054
2,000 State Environmental Facs. Corp. Rev., 5.00%, 6/15/28 Aaa/AAA 2,081,960
      39,447,051
 

North Carolina–1.6%

   
2,000 Charlotte-Mecklenburg Hospital Auth., Healthcare System Rev.,
5.00%, 1/15/33, Ser. A
Aa3/AA 2,043,660
  Eastern Municipal Power Agcy, Power System Rev.,    
2,000 5.125%, 1/1/23, Ser. D Baa2/BBB 2,050,780
2,000 5.125%, 1/1/26, Ser. D Baa2/BBB 2,040,360
3,795 5.375%, 1/1/17, Ser. C Baa2/BBB 3,997,198
1,500 Medical Care Commission, Health Care Facs. Rev., Cleveland Cnty., 5.00%, 7/1/35 (AMBAC) Aaa/AAA 1,544,805
      11,676,803
 

Ohio–0.4%

   
2,500 Lorain Cnty. Hospital Rev., Catholic Healthcare, 5.375%, 10/1/30 Aa3/AA− 2,589,175
 

Oklahoma–0.5%

   
3,500 Tulsa Cnty. Industrial Auth. Rev., Legacy Apartments, 4.90%, 11/20/46 (FHA-GNMA) Aaa/NR 3,503,255
 

Pennsylvania–3.5%

   
4,350 Allegheny Cnty. Hospital Dev. Auth. Rev., 9.25%, 11/15/30, Ser. B Ba3/B+ 5,204,558
  Cumberland Cnty. Auth. Retirement Community Rev., Wesley
Affiliated Services,
   
415 7.25%, 1/1/35, Ser. A NR/NR 444,237
1,085 7.25%, 1/1/35, Ser. A, (Pre-refunded @ $101, 1/1/12) (a) NR/NR 1,299,710
3,250 Delaware River Joint Toll Bridge, Commission Bridge Rev.,
5.00%, 7/1/28
A2/A− 3,349,222
3,000 Lehigh Cnty. General Purpose Auth. Rev., St. Luke's Bethlehem
Hospital, 5.375%, 8/15/33
Baa1/BBB 3,088,860
5,000 Philadelphia School Dist., GO, 5.125%, 6/1/34, Ser. D (FGIC) Aaa/AAA 5,242,350
6,300 St. Mary Hospital Auth., Bucks Cnty. Rev., 5.00%, 12/1/28, (Partially
pre-refunded @ $101, 6/1/08) (a)
Aa2/NR 6,207,201
      24,836,138
 

Puerto Rico–0.3%

   
2,200 Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN A3/A− 2,275,746
 

South Carolina–2.1%

   
7,500 Florence Cnty. Rev., McLeod Regional Medical Center, 5.00%,
11/1/31, Ser. A (FSA)
Aaa/AAA 7,774,800
6,700 Jobs Economic Dev. Auth. Rev., Bon Secours Health System,
5.625%, 11/15/30
A3/A− 7,005,721
      14,780,521

10 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Tennessee–0.2%

   
$1,250 Knox Cnty. Health Educational & Housing Facs., Board Hospital Facs. Rev., Catholic Healthcare Partners, 5.25%, 10/1/30 Aa3/AA− $1,292,300
 

Texas–10.4%

   
4,135 Canyon Independent School Dist., GO, 5.00%, 2/15/28,
Ser. A (PSF-GTD)
NR/AAA 4,267,982
2,500 Columbia & Brazoria Independent School Dist., GO, 5.00%,
8/1/29 (PSF-GTD)
NR/AAA 2,581,800
1,300 Comal Cnty. Health Facs., McKenna Memorial Hospital Project Rev., 6.25%, 2/1/32 Baa3/BBB− 1,396,889
  Denton Independent School Dist., GO (PSF-GTD),    
6,000 zero coupon, 8/15/26 Aaa/AAA 2,005,860
6,000 zero coupon, 8/15/27 Aaa/AAA 1,887,540
5,000 zero coupon, 8/15/28 Aaa/AAA 1,479,900
6,000 zero coupon, 8/15/29 Aaa/AAA 1,671,540
2,000 zero coupon, 8/15/30 Aaa/AAA 524,340
8,000 zero coupon, 8/15/31 Aaa/AAA 1,973,360
4,400 Harris Cnty., GO, 5.125%, 8/15/31, (Pre-refunded @ $100,
8/15/12) (a)
Aa1/AA+ 4,688,068
  Harris Cnty. Health Facs. Dev. Corp. Rev.,    
5,000 Christus Health, 5.375%, 7/1/29, Ser. A (MBIA) (Pre-refunded
@ $101, 7/1/09) (a)
Aaa/AAA 5,305,400
2,750 St. Luke's Episcopal Hospital, 5.375%, 2/15/26, Ser. A,
(Pre-refunded @ $100, 8/15/11) (a)
NR/AA− 2,955,397
19,500 Harris Cnty. Rev., 5.125%, 8/15/32 (FSA) Aaa/AAA 20,264,985
4,005 Houston, GO, 5.00%, 3/1/25 (MBIA) Aaa/AAA 4,145,455
5,000 Houston Water & Sewer System Rev., 5.00%, 12/1/30, Ser. A (FSA) (Pre-refunded @ $100, 12/1/12) (a) Aaa/AAA 5,304,400
7,000 Judson Independent School Dist., GO, 5.00%, 2/1/30 (PSF-GTD) Aaa/NR 7,168,070
  Mesquite Independent School Dist. No. 1, GO, Ser. A (PSF-GTD),    
1,365 zero coupon, 8/15/16 NR/AAA 844,362
1,000 zero coupon, 8/15/18 NR/AAA 558,100
1,000 zero coupon, 8/15/19 NR/AAA 528,460
1,000 zero coupon, 8/15/20 NR/AAA 500,890
2,105 Northwest Harris Cnty. Municipal Utility Dist. No. 16, GO, 5.30%, 10/1/29 (Radian) NR/AA 2,161,561
2,000 Univ. Rev., 5.00% 7/1/26, Ser. B Aaa/AAA 2,083,440
      74,297,799
 

Utah–0.8%

   
1,750 Cnty. of Weber, IHC Health Services Rev., 5.00%, 8/15/30 Aa1/AA+ 1,774,517
4,100 Salt Lake Cnty. Hospital Rev., IHC Health Services, 5.125%,
2/15/33 (AMBAC)
Aaa/AAA 4,234,767
      6,009,284
 

Washington–5.0%

   
6,375 Chelan Cnty. Public Utility Dist. Rev., 5.125%, 7/1/33,
Ser. C (AMBAC)
Aaa/AAA 6,599,719
3,000 Port Seattle Rev., 5.00%, 9/1/24 (FGIC) Aaa/AAA 3,124,890

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 11




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Washington–(continued)

   
$23,545 Tobacco Settlement Auth., Tobacco Settlement Rev.,
6.50%, 6/1/26
Baa3/BBB $25,704,783
      35,429,392
 

Wisconsin–0.1%

   
560 Badger Tobacco Asset Securitization Corp., 6.00%, 6/1/17 Baa3/BBB 589,316
  Total Municipal Bonds & Notes (cost–$600,543,923)   637,096,002

VARIABLE RATE NOTES (b)(d)(e)–9.7%

 
 

Arizona–0.2%

   
1,000 Salt River Project Agricultural Improvement & Power Dist., Rev.,
11.35%, 1/1/35, Ser. 1227
Aa2/NR 1,207,050
 

Colorado–0.4%

   
2,490 City of Colorado Springs, 9.964%, 11/15/30, Ser. 457 Aa2/NR 2,800,204
 

Florida–0.4%

   
2,554 State Department of Transportation Turnpike Rev., 10.08%, 7/1/31, Ser. 1128 Aa2/NR 2,667,270
 

Illinois–0.3%

   
1,990 Dev. Finance Auth., Gas Supply Rev., 10.519%, 2/1/11 (AMBAC) NR/NR 2,233,377
 

Michigan–1.8%

   
  Detroit Water Supply System Rev.,    
5,720 10.262%, 1/1/11 (MBIA) NR/AAA 6,876,069
4,990 10.779%, 7/1/11 (FSA) NR/AAA 6,101,772
      12,977,841
 

New York–2.7%

   
7,770 Liberty Dev. Corp. Rev., 8.92%, 10/1/35, Ser. 1183 Aa3/NR 10,161,062
1,636 New York City Municipal Water Finance Auth., Water & Sewer
System Rev., 11.39%, 6/15/37, Ser. 1226
Aa2/NR 1,909,539
6,000 State Dormitory Auth., Univ. & College Improvement, 11.39%, 3/15/35, Ser. 1216 NR/AA 7,093,800
      19,164,401
 

Ohio–0.4%

   
  Ohio Air Quality Dev. Auth. (FGIC),    
1,000 10.35%, 1/1/34, Ser. 1219 Aaa/AAA 1,040,500
2,075 10.35%, 1/1/34, Ser. 1223 Aaa/AAA 2,158,934
      3,199,434
 

Texas–1.9%

   
1,705 Crowley Independent School Dist., GO, 8.73%, 8/1/35,
Ser. 1171 (PSF-GTD)
Aaa/NR 1,704,489
2,450 Dallas Area Rapid Transit Rev., 9.364%, 12/1/32 (FGIC) NR/NR 2,811,228
2,028 Denton Independent School Dist., GO, 11.31%, 8/15/33,
Ser. 951 (PSF-GTD)
Aaa/NR 2,304,051

12 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (concluded)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
 

Texas–(continued)

   
$1,870 Mansfield Independent School Dist., GO, 10.479%,
2/15/28 (PSF-GTD)
NR/NR $2,254,322
$2,000 Sabine River Auth. Rev., 5.20%, 5/1/28 Baa2/BBB− 2,033,100
2,060 Univ. Rev., 9.567%, 8/15/33 NR/NR 2,383,338
      13,490,528
 

Washington–1.6%

   
  King Cnty. Sewer Rev.,    
1,520 10.671%, 7/1/11 (FGIC) NR/NR 1,800,394
3,000 11.35%, 1/1/35, Ser. 1200 (FSA) Aaa/AAA 3,344,100
3,655 Port Tacoma, GO, 9.997%, 12/1/33 (AMBAC) NR/NR 4,319,114
1,510 Seattle Drain & Wastewater Rev., 10.716%, 7/1/10 (FGIC) NR/NR 1,773,193
      11,236,801
  Total Variable Rate Notes (cost–$65,431,132)   68,976,906

VARIABLE RATE DEMAND NOTES (e)(f)–0.7%

 
 

Connecticut–0.5%

   
3,450 State Health & Educational Facs. Auth. Rev., Yale Univ., 3.05%,
4/3/06, Ser. Y
VMIG1/A-1+ 3,450,000
 

Missouri–0.2%

   
1,900 State Health & Educational Facs. Auth. Rev., Washington Univ.,
3.12%, 4/3/06, Ser. B
VMIG1/A-1+ 1,900,000
  Total Variable Rate Demand Notes (cost–$5,350,000)   5,350,000

U.S. TREASURY BILLS (g)–0.3%

 
2,405 4.485%-4.51%, 6/1/06-6/15/06 (cost–$2,382,980)   2,382,980
 

Total Investments before options written (cost–$673,708,035)–100.0%

  713,805,888

OPTIONS WRITTEN (h)–(0.0)%

 
Contracts  
 

Call Options–(0.0)%

250 U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade, strike price $110, expires 5/26/06   (3,906)
 

Put Options–(0.0)%

  U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,    
478 strike price $105, expires 5/26/06   (126,969)
250 strike price $106, expires 5/26/06   (140,625)
      (267,594)
  Total Options Written (premiums received–$246,790)   (271,500)
 

Total Investments net of options written (cost–$673,461,245)–100.0%

  $713,534,388

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 13




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value

CALIFORNIA MUNICIPAL BONDS & NOTES–86.5%

 
$  1,000 Alameda Public Financing Auth. Rev., 7.00%, 6/1/09 NR/NR $    1,000,480
  Assoc. of Bay Area Governments Finance Auth. Rev., Odd Fellows
Home,
   
3,200 5.20%, 11/15/22 NR/A 3,321,152
11,725 5.35%, 11/15/32 NR/A 12,180,164
  Burbank Public Finance Auth. Rev., San Fernando Redev. Project,
   
1,135 5.50%, 12/1/28 NR/BBB 1,159,788
1,000 5.50%, 12/1/33 NR/BBB 1,017,410
2,000 Butte-Glenn Community College, GO, 5.00%, 8/1/26, Ser. A (MBIA) Aaa/NR 2,084,480
2,000 Capistrano Unified School Dist., Community Fac. Dist., Special Tax, 6.00%, 9/1/32 NR/NR 2,089,700
1,000 Carlsbad Impt. Bond Act 1915, 6.00%, 9/2/34 NR/NR 1,025,010
1,000 Cathedral City Public Financing Auth., Tax Allocation Rev.,
5.00%, 8/1/33, Ser. A (MBIA)
Aaa/AAA 1,032,920
1,150 Ceres Redev. Agcy. Tax Allocation, 5.00%, 11/1/33 (MBIA) Aaa/AAA 1,195,954
  Ceres Unified School Dist., GO (FGIC),    
2,825 zero coupon, 8/1/28 Aaa/AAA 817,583
2,940 zero coupon, 8/1/29 Aaa/AAA 800,650
  Chula Vista, Special Tax,    
675 6.15%, 9/1/26 NR/NR 713,961
1,620 6.20%, 9/1/33 NR/NR 1,713,328
1,600 Chula Vista Community Fac. Dist., Special Tax, 5.75%, 9/1/33 NR/NR 1,634,128
8,000 Contra Costa Cnty. Public Financing Auth. Tax Allocation Rev.,
5.625%, 8/1/33, Ser. A
NR/BBB 8,292,880
3,775 Cucamonga School Dist., CP, 5.20%, 6/1/27 NR/A− 3,829,851
  Eastern Muni. Water Dist. Community Facs., Special Tax,    
425 5.75%, 9/1/33 NR/NR 433,768
1,500 5.95%, 9/1/33 NR/NR 1,532,205
1,745 6.05%, 9/1/27 NR/NR 1,784,088
1,535 6.10%, 9/1/33 NR/NR 1,568,678
  Educational Fac. Auth. Rev.,    
2,500 Institute of Technology, 5.00%, 10/1/32, Ser. A Aaa/AAA 2,595,875
2,455 Loyola Marymount Univ., zero coupon, 10/1/34 (MBIA) Aaa/NR 614,732
5,000 Pepperdine Univ., 5.00%, 9/1/33, Ser. A (FGIC) Aaa/AAA 5,146,000
2,195 Elk Grove Unified School Dist., Community Facs. Dist. No. 1, Special Tax, 5.00%, 12/1/35 (MBIA) AAA/AAA 2,259,248
500 Franklin-McKinley School Dist., GO, 5.00%, 8/1/27, Ser. B (FSA) Aaa/AAA 537,020
  Fremont Community Facs. Dist., Special Tax,    
1,250 5.30%, 9/1/30 NR/NR 1,252,688
5,000 6.30%, 9/1/31 NR/NR 5,121,700
9,500 Fresno School Unified Dist., GO, 6.00%, 8/1/26, Ser. A (MBIA) Aaa/AAA 11,599,880

14 PIMCO Municipal Income Fund III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value
$  4,380 Glendale Electric Works Rev., 5.00%, 2/1/27 (MBIA) Aaa/AAA $    4,548,849
  Golden State Tobacco Securitization Corp., Tobacco Settlement Rev., Ser. 2003-A-1,  
18,000 6.25%, 6/1/33 Baa3/BBB 19,631,700
38,490 6.75%, 6/1/39 Baa3/BBB 43,334,351
  Health Facs. Finance Auth. Rev.,    
5,000 Adventist Health System, 5.00%, 3/1/33 NR/A 5,011,350
6,000 Cottage Health System, 5.00%, 11/1/33, Ser. B (MBIA) Aaa/AAA 6,163,380
5,000 Kaiser Permanente, 5.00%, 10/1/18, Ser. B A3/AAA 5,172,250
  Paradise VY Estates (CA Mtg. Ins.),    
2,000 5.125%, 1/1/22 NR/A 2,086,000
1,550 5.25%, 1/1/26 NR/A 1,611,334
2,000 Sutter Health, 6.25%, 8/15/35, Ser. A A1/AA− 2,207,840
  Infrastructure & Economic Dev. Bank Rev.,    
2,750 Claremount Univ. Consortium, 5.25%, 10/1/33 Aa3/NR 2,893,358
  Kaiser Assistance Corp.,    
3,000 5.50%, 8/1/31, Ser. B A2/A+ 3,148,920
8,000 5.55%, 8/1/31, Ser. A NR/A+ 8,421,680
3,725 La Mesa-Spring Valley School Dist., GO, 5.00%, 8/1/26, Ser. A (FGIC), (Pre-refunded @ $100, 8/1/12) (a) Aaa/AAA 3,984,744
1,400 La Quinta Redev. Agcy., Tax Allocation, 5.10%, 9/1/31 (AMBAC) Aaa/AAA 1,444,338
20 Lancaster Financing Auth. Tax Allocation, 4.75%, 2/1/34 (MBIA) Aaa/AAA 20,117
825 Lee Lake Water Dist. Community Facs. Dist., Montecito Ranch, Special Tax, 6.125%, 9/1/32 NR/NR 854,230
5,000 Long Beach Community College Dist., GO, 5.00%, 5/1/28, Ser. A (MBIA), (Pre-refunded @ $100, 5/01/13) (a) Aaa/AAA 5,368,900
500 Los Angeles Department of Water & Power Rev., 4.75%, 7/1/36 (FSA) AAA/AAA 506,310
  Los Angeles Unified School Dist., GO (MBIA),    
7,650 5.00%, 1/1/28, Ser. A Aaa/AAA 7,955,464
3,000 5.125%, 1/1/27, Ser. E Aaa/AAA 3,160,830
1,000 Lynwood Unified School Dist., GO, 5.00%, 8/1/27, Ser. A (FSA) Aaa/NR 1,040,960
5,280 Modesto Irrigation Dist., CP, 5.00%, 7/1/33, Ser. A (MBIA) Aaa/AAA 5,454,398
2,180 Murrieta Valley Unified School Dist., Special Tax, 6.40%, 9/1/24 NR/NR 2,248,060
5,000 Oakland, GO, 5.00%, 1/15/33, Ser. A (MBIA) Aaa/AAA 5,153,150
  Oakland Redev. Agcy., Tax Allocation,    
985 5.25%, 9/1/27 NR/A− 1,008,423
1,545 5.25%, 9/1/33 NR/A− 1,579,005
5,000 Orange Cnty. Community Facs. Dist., Special Tax, Ladera Ranch,    
  5.55%, 8/15/33, Ser. A NR/NR 5,104,250
5,000 Orange Cnty. Unified School Dist., CP, 4.75%, 6/1/29 (MBIA) Aaa/AAA 4,937,450
1,000 Orange Cnty. Water Dist. Rev., CP, 5.00%, 8/15/28, Ser. B (MBIA) Aaa/AAA 1,027,830
2,000 Palm Desert Financing Auth., Tax Allocation, 5.00%, 4/1/25,
Ser. A (MBIA)
Aaa/AAA 2,066,480

3.31.06 | PIMCO Municipal Income Fund III Semi-Annual Report 15




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value
$  1,410 Pomona Public Financing Auth. Rev., 5.00%, 12/1/37, Ser. AF (MBIA) Aaa/AAA $  1,448,451
  Poway Unified School Dist., Community Facs. Dist. No. 6,
Special Tax,
   
3,650 5.125%, 9/1/28 NR/NR 3,635,199
1,285 6.05%, 9/1/25 NR/NR 1,343,814
2,100 6.125%, 9/1/33 NR/NR 2,195,424
5,000 Riverside, CP, 5.00%, 9/1/33 (AMBAC) Aaa/AAA 5,149,400
500 Rocklin Unified School Dist. Community Facs., Special Tax, 5.00%, 9/1/29 (MBIA) Aaa/AAA 518,125
7,680 Rowland Unified School Dist., GO, 5.00%, 8/1/28, Ser. B (FSA) Aaa/AAA 7,989,734
1,435 Sacramento City Financing Auth. Rev., North Natomas CFD No. 2, 6.25%, 9/1/23, Ser. A NR/NR 1,473,817
  San Diego Unified School Dist., GO (FSA),    
480 5.00%, 7/1/26, Ser. C Aaa/AAA 515,222
11,000 5.00%, 7/1/26, Ser. E Aaa/AAA 11,706,090
8,425 5.00%, 7/1/28, Ser. E Aaa/AAA 8,965,801
1,500 San Diego Univ. Foundation Auxiliary Organization, Rev., 5.00%, 3/1/27, Ser. A (MBIA) Aaa/AAA 1,547,085
3,000 San Jose, Libraries & Parks, GO, 5.125%, 9/1/31 Aa1/AA+ 3,112,260
  Santa Ana Unified School Dist., GO, Ser. B (FGIC),    
2,515 zero coupon, 8/1/26 Aaa/AAA 966,841
3,520 zero coupon, 8/1/28 Aaa/AAA 1,218,307
2,500 zero coupon, 8/1/30 Aaa/AAA 779,375
3,780 zero coupon, 8/1/31 Aaa/AAA 1,117,746
3,770 zero coupon, 8/1/32 Aaa/AAA 1,056,957
1,250 Santa Clara Valley Transportation Auth., Sales Tax Rev., 5.00%, 6/1/26, Ser. A (MBIA) (Pre-refunded @ $100, 6/1/11) (a) Aaa/AAA 1,330,412
5,985 Santa Margarita Water Dist., Special Tax, 6.25%, 9/1/29 NR/NR 6,439,550
3,550 Santa Monica Community College Dist., GO, zero coupon, 8/1/27, Ser. C (MBIA) Aaa/AAA 1,235,010
1,205 Sequoia Union High School Dist., GO, 5.00%, 7/1/23 (MBIA) Aaa/NR 1,256,152
4,475 Simi Valley Community Dev. Agcy., Tax Allocation, Tapo Canyon & West End, 5.00%, 9/1/25 (FGIC) Aaa/AAA 4,657,311
4,250 Sonoma Cnty. Jr. College Dist., GO, 5.00%, 8/1/27, Ser. A (FSA) (Pre-refunded @ $100, 8/01/13) (a) Aaa/AAA 4,564,670
1,000 Sonoma Cnty. Water Agcy. Water Rev., 5.00%, 7/1/32, Ser. A (MBIA) Aaa/AAA 1,033,340
  South Tahoe Joint Powers Financing Auth. Rev.,    
2,500 5.125%, 10/1/09 NR/NR 2,506,775
4,425 5.45%, 10/1/33 NR/BBB 4,528,678
12,200 Southern CA Public Power Auth., Power Project Rev., Magnolia Power, 5.00%, 7/1/33, Ser. A-2003-1 (AMBAC) Aaa/AAA 12,587,716
600 State Dept. of Water Res. Rev., Central Valley Project, 5.00%, 12/1/25, Ser. AC (MBIA) Aaa/AAA 627,846
4,095 State Dept. Veteran Affairs Home Purchase Rev., 5.35%, 12/1/27, Ser. A (AMBAC) Aaa/AAA 4,285,295

16 PIMCO Municipal Income Fund III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value
  State Public Works Board Lease Rev.,    
$5,385 CA State Univ., 5.00%, 10/1/19 A2/A− $  5,548,489
1,105 Patton, 5.375%, 4/1/28 A3/A− 1,161,753
4,600 Univ. CA, M.I.N.D. Inst., 5.00%, 4/1/28, Ser. A Aa2/AA− 4,719,922
3,505 Statewide Community Dev. Auth., CP, Internext Group,
5.375%, 4/1/30
NR/BBB 3,513,307
  Statewide Community Dev. Auth. Rev.,    
2,500 Berkeley Montessori School, 7.25%, 10/1/33 NR/NR 2,579,300
  Health Fac.,    
7,300 Jewish Home, 5.50%, 11/15/33 (CA St Mtg.) NR/A 7,756,031
15,000 Memorial Health Services, 5.50%, 10/1/33, Ser. A A3/A+ 15,716,850
10,000 Sutter Health, 5.50%, 8/15/34, Ser. B A1/AA− 10,423,700
1,795 Sunnyvale Financing Auth., Water & Wastewater Rev.,
5.00%, 10/1/26 (AMBAC)
Aaa/AAA 1,845,242
2,000 Tamalpais Union High School Dist., GO, 5.00%, 8/1/26 (MBIA) Aaa/AAA 2,074,420
2,000 Temecula Public Financing Auth., Crowne Hill, Special Tax,
6.00%, 9/1/33, Ser. A
NR/NR 2,060,780
  Tobacco Securitization Agcy. Rev.,    
  Alameda Cnty.,    
8,100 5.875%, 6/1/35 Baa3/NR 8,436,150
7,000 6.00%, 6/1/42 Baa3/NR 7,306,180
2,000 Kern Cnty., 6.125%, 6/1/43, Ser. A NR/BBB 2,100,520
2,950 Torrance Medical Center Rev., 5.50%, 6/1/31, Ser. A A1/A+ 3,061,923
4,000 Vernon Electric System Rev., Malburg Generating Station,
5.50%, 4/1/33, (Pre-refunded @ $100, 4/1/08) (a)
Aaa/NR 4,154,720
1,000 West Basin Municipal Water Dist. Rev., CP, 5.00%, 8/1/30, Ser. A (MBIA) Aaa/AAA 1,035,250
2,500 William S. Hart Union High School Dist., Special Tax,
6.00%, 9/1/33
NR/NR 2,543,125
2,750 Woodland Finance Auth. Lease Rev., 5.00%, 3/1/32 (XLCA) Aaa/AAA 2,847,818
  Total California Municipal Bonds & Notes (cost–$398,748,819)   424,179,155

OTHER MUNICIPAL BONDS & NOTES–2.1%

   
  New York–0.6%    
2,500 State Dormitory Auth. Rev., Hospital, 6.25%, 8/15/15 (FHA) Aa2/AAA 2,838,550
  Puerto Rico–1.5%    
1,500 Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN A3/A− 1,551,645
  Public Building Auth. Rev.,    
4,420 5.00%, 7/1/36, Ser. I (GTD) Baa2/BBB 4,461,283
790 5.25%, 7/1/36, Ser. D, (Pre-refunded @ $100, 7/1/12) (a) Baa2/A− 848,507
290 5.25%, 7/1/36, Ser. D Baa2/BBB 300,420
      7,161,855
  Total Other Municipal Bonds & Notes (cost–$9,478,619)   10,000,405

3.31.06 | PIMCO Municipal Income Fund III Semi-Annual Report 17




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value

CALIFORNIA VARIABLE RATE NOTES (b)(d)(e)–9.4%

 
  Golden State Tobacco Securitization Corp., Tobacco Settlement Rev. (FGIC),    
$  2,000 11.43%, 6/1/35, Ser. 1220 Aaa/AAA $    2,303,100
2,000 11.697%, 6/1/35 Aaa/AAA 2,303,100
1,465 Infrastructure & Economic Dev. Bank Rev.,
9.359%, 7/1/36 (AMBAC)
NR/NR 1,721,448
  Los Angeles Dept. of Water & Power (FSA),    
1,200 10.18%, 7/1/30, Ser. 1243 Aaa/AAA 1,307,400
2,000 19.994%, 7/1/35, Ser. 500 Aaa/NR 2,781,400
  Los Angeles Unified School Dist., GO (MBIA),    
1,745 10.503%, 1/1/23 NR/NR 1,908,716
2,090 13.492%, 1/1/11 NR/NR 3,154,918
2,020 Los Angeles Water & Power Rev., 9.013%, 7/1/30 NR/NR 2,306,598
950 Orange Cnty. Water Dist. Rev., CP,
9.894%, 2/15/11 (MBIA)
NR/NR 1,096,804
710 Pajaro Valley Unified School Dist., GO, 11.143%, 8/1/11 NR/NR 1,080,201
1,170 Pasadena Water Rev., 9.590%, 6/1/33 (FGIC) NR/NR 1,397,156
1,785 Sacramento Cnty. Water Financing Auth. Rev.,
10.144%, 6/1/11 (AMBAC)
NR/NR 2,132,218
1,150 Sacramento Muni Utility Dist., Electric Rev.,
11.056%, 2/15/11 (MBIA)
NR/NR 1,408,474
1,725 San Diego Community College Dist., GO,
11.10%, 5/1/11 (FSA)
NR/NR 2,197,978
  San Marcos Public Facs. Auth. Tax Allocation (FGIC),    
1,340 9.937%, 2/1/11 NR/NR 1,596,851
1,340 9.937%, 8/1/11 NR/NR 1,596,851
  Southern CA Public Power Auth., Power Project Rev. (AMBAC),    
1,350 6.59%, 7/1/33, Ser. 1045 NR/NR 1,435,806
2,065 10.042%, 7/1/11 NR/NR 2,456,214
4,520 State Economic Recovery, GO, 11.40%, 7/1/12, Ser. 956 (MBIA) NR/NR 6,064,258
  Univ. Rev. (FSA),    
1,375 10.15%, 5/15/35, Ser. 1119 NR/AAA 1,429,931
3,095 10.933%, 9/1/33 NR/NR 3,792,953
340 10.933%, 9/1/34 NR/NR 417,809
  Total California Variable Rate Notes (cost–$42,689,757)   45,890,184

OTHER VARIABLE RATE NOTES (d)(e)–1.6%

 
  Puerto Rico–1.6%    
3,500 Commonwealth of Puerto Rico, GO, 5.00%, 7/1/30, Ser. A Baa2/BBB 3,638,425
3,800 Public Finance Corp. Rev., 5.75%, 8/1/27, Ser. A Baa3/BBB− 4,086,976
  Total Other Variable Rate Notes (cost–$7,697,557)   7,725,401

18 PIMCO Municipal Income Fund III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO California Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (concluded)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
   Value

CALIFORNIA VARIABLE RATE DEMAND NOTES (e)(f)–0.2%

 
$     300 Health Facs. Financing Auth. Rev., 3.07%, 4/3/06 (AMBAC) VMIG1/A-1+ $300,000
600 State of California, Daily Kindergarten Univ., GO, 3.07%, 4/3/06 VMIG1/A-1+ 600,000
  Total California Variable Rate Demand Notes (cost–$900,000)   900,000

U.S. TREASURY BILLS (g)–0.3%

 
1,725 4.485%-4.50%, 6/15/06 (cost–$1,708,833)   1,708,833
  Total Investments before options written (cost–$461,223,585)–100.1% 490,403,978

OPTIONS WRITTEN (h)–(0.1)%

Contracts      
  Call Options–(0.0)%  
275 U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,
strike price $110, expires 5/26/06
(4,297)
  Put Options–(0.1)%  
  U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,  
472 strike price $105, expires 5/26/06 (125,375)
275 strike price $106, expires 5/26/06 (154,687)
    (280,062)
  Total Options Written (premiums received–$258,038) (284,359)
  Total Investments net of options written (cost–$460,965,547)–100.0% $490,119,619

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Fund III Semi-Annual Report 19




Table of Contents

PIMCO New York Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value

NEW YORK MUNICIPAL BONDS & NOTES–77.2%

$2,800 East Rochester Housing Auth. Rev., St. Mary's Residence Project,
5.375%, 12/20/22 (GNMA)
NR/AAA $2,997,624
1,060 Liberty Dev. Corp. Rev., Goldman Sachs Headquarters, 5.25%, 10/1/35 Aa3/A+ 1,168,777
1,000 Long Island Power Auth., Electric System Rev., 5.00%, 9/1/27, Ser. C A3/A− 1,029,250
1,000 Madison Cnty. Industrial Dev. Agcy, Colgate Univ. Rev., 5.00%, 7/1/35, Ser. A (AMBAC) Aaa/AAA 1,041,230
5,000 Metropolitan Transportation Auth. Rev., 5.00%, 11/15/31, Ser. F
(MBIA)
Aaa/AAA 5,167,350
1,000 Monroe Tobacco Asset Securitization Corp., Tobacco Settlement Rev., 6.375%, 6/1/35, (Pre-refunded @ $101, 6/1/10) (a) Aaa/AAA 1,113,960
2,000 Nassau Cnty. Tobacco Settlement Corp., Rev., 6.60%, 7/15/39 Ba1/BBB− 2,125,540
7,195 New York City, GO, 5.00%, 3/1/33, Ser. I A1/A+ 7,346,239
5,000 New York City Municipal Water Finance Auth., Water & Sewer System Rev., 5.00%, 6/15/32, Ser. A Aa2/AA+ 5,121,300
1,750 New York City Transitional Finance Auth., GO, 5.375%, 3/1/27, Ser. 1 A1/A+ 1,865,605
2,995 New York Counties Tobacco Settlement Trust Rev., 5.625%, 6/1/35 Ba1/BBB 3,067,419
1,000 Niagara Falls Public Water Auth., Water & Sewer System Rev.,
5.00%, 7/15/34, Ser. A (MBIA)
Aaa/AAA 1,035,060
1,855 Sachem Central School Dist. of Holbrook, GO, 5.00%, 6/15/30 (MBIA) Aaa/AAA 1,925,193
  State Dormitory Auth. Rev.,    
1,400 Catholic Health of Long Island, 5.10%, 7/1/34 Baa1/BBB 1,413,020
2,000 Columbia Univ., 5.00%, 7/1/24, Ser. A Aaa/AAA 2,095,040
2,250 Jewish Board Family & Children, 5.00%, 7/1/33 (AMBAC) Aaa/AAA 2,329,942
2,000 Kaleida Health Hospital, 5.05%, 2/15/25 (FHA) NR/AAA 2,072,040
3,250 Lenox Hill Hospital, 5.50%, 7/1/30 Ba2/NR 3,138,785
  Long Island Univ. (Radian),    
2,040 5.00%, 9/1/23, Ser. A Baa3/AA 2,099,568
4,000 5.00%, 9/1/32, Ser. A Baa3/AA 4,096,640
3,000 Lutheran Medical Hospital, 5.00%, 8/1/31 (MBIA-FHA) Aaa/AAA 3,094,200
1,000 Mental Health Services Facs., 5.00%, 2/15/30, Ser. B (AMBAC) AAA/AAA 1,040,600
  Mount St. Mary College (Radian),    
2,000 5.00%, 7/1/27 NR/AA 2,066,060
2,000 5.00%, 7/1/32 NR/AA 2,053,600
1,000 New York Univ., 5.00%, 7/1/31, Ser. 2 (AMBAC) Aaa/AAA 1,029,620
6,150 North General Hospital, 5.00%, 2/15/25 NR/AA− 6,303,934
1,000 North Shore L.I. Jewish Group, 5.50%, 5/1/33 A3/NR 1,053,770
1,000 NY & Presbyterian Hospital Rev., 4.75%, 8/1/27 (AMBAC-FHA) Aaa/AAA 1,011,780
3,740 Saint Barnabas Hospital, 5.00%, 2/1/31, Ser. A (AMBAC-FHA) Aaa/AAA 3,849,956
1,000 School Dist. Financing, 5.00%, 10/1/30, Ser. D (MBIA) Aaa/AAA 1,037,550
1,250 Skidmore College, 5.00%, 7/1/28 (FGIC) Aaa/NR 1,307,438
2,500 Sloan-Kettering Center Memorial, 5.00%, 7/1/34, Ser. 1 Aa2/AA 2,557,700

20 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO New York Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
$  3,600 State Personal Income Tax, 5.00%, 3/15/32, (Pre-refunded
@ $100, 3/15/13) (a)
A1/AAA $    3,838,788
1,250 Student Housing Corp., 5.125%, 7/1/34 (FGIC) Aaa/AAA 1,319,938
1,500 Teachers College, 5.00%, 7/1/32 (MBIA) Aaa/NR 1,551,840
2,500 Winthrop-Nassau Univ., 5.75%, 7/1/28 Baa1/NR 2,631,100
620 Winthrop Univ., Hospital Association, 5.50%, 7/1/32, Ser. A Baa1/NR 645,073
2,000 Yeshiva Univ., 5.125%, 7/1/34 (AMBAC) Aaa/NR 2,111,900
1,900 State Urban Dev. Corp. Personal Income Tax Rev.,
5.00%, 3/15/33, Ser. C-1, (Pre-refunded @ $100, 3/15/13) (a)
Aa3/AAA 2,031,993
1,000 State Urban Dev. Corp. Rev., 5.00%, 3/15/35, Ser. B NR/AAA 1,034,970
2,000 Warren & Washington Counties Industrial Dev. Agcy. Fac. Rev.,
Glens Falls Hospital, 5.00%, 12/1/35, Ser. A (FSA)
Aaa/AAA 2,064,040
1,250 Westchester Cnty. Industrial Dev. Agcy. Continuing Care Retirement Rev., Kendal on Hudson, 6.50%, 1/1/34 NR/NR 1,301,625
  Total New York Municipal Bonds & Notes (cost–$93,398,273)   97,187,057

OTHER MUNICIPAL BONDS & NOTES–11.9%

   
  California–5.0%
5,560 Golden State Tobacco Securitization Corp., Tobacco Settlement Rev., 6.75%, 6/1/39, Ser. 2003-A-1 Baa3/BBB 6,259,782
  District of Columbia–0.2%    
175 Tobacco Settlement Financing Corp. Rev., 6.50%, 5/15/33 Baa3/BBB 199,225
  Puerto Rico–5.9%    
  Children's Trust Fund Tobacco Settlement Rev.,    
1,700 5.50%, 5/15/39 Baa3/BBB 1,747,787
580 5.625%, 5/15/43 Baa3/BBB 597,620
1,000 Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN A3/A− 1,034,430
4,000 Public Building Auth. Rev., Gov't Facs., 5.00%, 7/1/36, Ser. I (GTD) Baa2/BBB 4,037,360
      7,417,197
  Rhode Island–0.4%    
500 Tobacco Settlement Financing Corp. Rev., 6.125%, 6/1/32, Ser. A Baa3/BBB 522,185
  South Carolina–0.3%    
370 Tobacco Settlement Rev. Management Auth., 6.375%, 5/15/30,
Ser. B
Baa3/BBB 415,059
  Washington–0.1%    
135 Tobacco Settlement Auth., Tobacco Settlement Rev., 6.625%, 6/1/32 Baa3/BBB 148,817
  Total Other Municipal Bonds & Notes (cost–$12,656,373)   14,962,265

NEW YORK VARIABLE RATE NOTES (b)(d)(e)–10.0%

121 Liberty Dev. Corp. Rev., 15.72%, 10/1/35, Ser. 1251 Aa3/NR 203,781
1,555 Metropolitan Transportation Auth. Rev., 9.77%, 11/15/32, Ser. 862 (FGIC) Aaa/NR 1,773,508
550 Mortgage Agcy. Rev., 10.13%, 10/1/27, Ser. 1199 Aa1/NR 568,766
1,000 New York City Trust for Cultural Resources Rev., 11.37%, 2/1/34, Ser. 950 (FGIC) Aaa/NR 1,186,350

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 21




Table of Contents

PIMCO New York Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (continued)



Principal
Amount
(000)
  Credit Rating
(Moody's/S&P)
Value
$  1,205 State Dormitory Auth. Rev., 9.943%, 7/1/32 NR/NR $    1,443,060
  State Environmental Facs. Corp., State Clean Water & Drinking Rev.,
1,005 8.008%, 7/15/23 NR/AAA 1,107,048
1,775 8.008%, 7/15/27 NR/AAA 1,943,607
1,845 State Housing Finance Agcy. State Personal Income Tax Rev.,
9.77%, 3/15/33, Ser. 859
NR/AA 2,485,861
700 State Urban Dev. Corp. Rev., 11.697%, 3/15/35 NR/AAA 822,395
1,000 Triborough Bridge & Tunnel Auth. Rev., 9.77%, 11/15/32, Ser. 912 (MBIA) NR/NR 1,145,480
  Total New York Variable Rate Notes (cost–$10,721,572)   12,679,856

U.S. TREASURY BILLS (g)–0.9%

1,125 4.49%-4.50%, 6/15/06 (cost–$1,114,455)   1,114,455
  Total Investments before options written (cost–$117,890,673)–100.0% 125,943,633

OPTIONS WRITTEN (h)–(0.0)%

 
Contracts      
  Put Options–(0.0)%    
93 U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,
strike price $105, expires 5/26/06 (premiums received–$24,401)
  (24,703)
  Total Investments net of options written (cost–$117,866,272)–100.0% $125,918,930

22 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO New York Municipal Income Fund III 
Schedule of Investments

March 31, 2006 (unaudited) (concluded)



     

Notes to Schedule of Investments:

(a) Pre-refunded bonds are collateralized by U.S. Government or other eligible securities which are held in escrow and used to pay principal and interest and retire the bonds at the earliest refunding date (payment date).
(b) 144A Security – Security exempt from registration, under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.
(c) When-Issued or delayed-delivery security. To be settled/delivered after March 31, 2006.
(d) Residual Interest Municipal Bonds (‘‘RIBS’’)/Residual Interest Tax Exempt Bonds (‘‘RITES’’) – The interest rate shown bears an inverse relationship to the interest rate on another security or the value of an index.
(e) Variable Rate Notes – instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed reflects the rate in effect on March 31, 2006.
(f) Maturity date shown is date of next put.
(g) All or partial amount segregated as collateral for futures contracts, when-issued or delayed-delivery securities.
(h) Non-income producing.

Glossary:

AMBAC – insured by American Municipal Bond Assurance Corp.
CA Mtg. Ins. – insured by California Mortgage Insurance
CA St. Mtg. – insured by California State Mortgage
CP – Certificates of Participation
FGIC – insured by Financial Guaranty Insurance Co.
FHA – insured by Federal Housing Administration
FSA – insured by Financial Security Assurance, Inc.
GNMA – insured by Government National Mortgage Association
GO – General Obligation Bond
GTD – Guaranteed
MBIA – insured by Municipal Bond Investors Assurance
NR – Not Rated
PSF – Public School Fund
Radian – insured by Radian Guaranty, Inc.
XLCA – insured by XL Capital Assurance

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 23




Table of Contents

PIMCO Municipal Income Funds III 
Statements of Assets and Liabilities

March 31, 2006 (unaudited)



  Municipal III  California 
Municipal III 
New York 
Municipal III 
Assets:      
Investments, at value (cost–$673,708,035, $461,223,585
and $117,890,673, respectively)
$713,805,888 $490,403,978 $125,943,633
Cash 8,735,947 3,828,616 1,590,742
Interest receivable 11,007,169 7,359,458 1,553,314
Receivable for variation margin on futures contracts 115,663 63,544 17,484
Prepaid expenses 47,005 30,907 24,578
Total Assets 733,711,672 501,686,503 129,129,751
Liabilities:      
Dividends payable to common and preferred shareholders 2,250,734 1,742,139 398,373
Payable for investments purchased 1,769,986
Investment management fees payable 589,643 404,920 104,070
Options written, at value (premiums received–$246,790, $258,038, and $24,401) 271,500 284,359 24,703
Accrued expenses 64,889 73,567 71,682
Total Liabilities 4,946,752 2,504,985 598,828
Preferred shares ($25,000 net asset and liquidation
value per share applicable to an aggregate of
10,800, 7,400 and 1,880 shares issued and
outstanding, respectively)
270,000,000 185,000,000 47,000,000
Net Assets Applicable to Common Shareholders $458,764,920 $314,181,518 $81,530,923
Composition of Net Assets Applicable to
Common Shareholders:
     
Common Stock:      
Par value ($0.00001 per share) $313 $214 $55
Paid-in-capital in excess of par 443,798,254 303,836,795 77,690,891
Undistributed (dividends in excess of) net investment income (1,447,631) 1,368,720 (59,897)
Accumulated net realized loss on investments (28,914,731) (23,111,325) (5,113,659)
Net unrealized appreciation of investments, futures
contracts and options written
45,328,715 32,087,114 9,013,533
Net Assets Applicable to Common Shareholders $458,764,920 $314,181,518 $81,530,923
Common Shares Outstanding 31,251,831 21,404,511 5,477,544
Net Asset Value Per Common Share $14.68 $14.68 $14.88

24 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06| See accompanying Notes to Financial Statements




Table of Contents

PIMCO Municipal Income Funds III 
Statements of Operations

For the six months ended March 31, 2006 (unaudited)



  Municipal III  California 
Municipal III 
New York 
Municipal III 
Investment Income:      
Interest $19,952,850 $13,564,013 $3,416,903
Expenses:      
Investment management fees 2,349,903 1,614,771 415,228
Auction agent fees and commissions 348,152 235,345 61,240
Custodian and accounting agent fees 66,123 46,926 52,414
Reports to shareholders 39,794 26,552 7,644
Audit and tax services 27,792 22,793 15,339
Trustees' fees and expenses 21,814 16,576 9,317
Transfer agent fees 16,644 16,425 16,393
Insurance expense 11,020 8,340 3,272
New York Stock Exchange listing fees 10,574 9,115 9,057
Legal fees 9,248 6,690 2,125
Miscellaneous 5,824 4,880 4,219
Investor relations 4,280 2,882 728
Total expenses 2,911,168 2,011,295 596,976
Less: investment management fees waived (542,285) (372,644) (95,822)
 custody credits earned on cash balances (30,527) (17,557) (6,729)
Net expenses 2,338,356 1,621,094 494,425
Net Investment Income 17,614,494 11,942,919 2,922,478
Realized and Change in Unrealized Gain (Loss):      
Net realized gain (loss) on:      
Investments 610,057 151,060 (60,109)
Futures contracts 3,393,676 2,308,619 741,872
Options Written 1,117,045 955,430 198,132
Net change in unrealized appreciation/depreciation of:      
Investments (7,035,730) (6,455,721) (1,819,153)
Futures contracts 3,105,713 1,492,745 470,609
Options written (356,871) (306,274) (59,149)
Net realized and change in unrealized gain (loss) on investments, futures contracts and options written 833,890 (1,854,141) (527,798)
Net Increase in Net Assets Resulting from
    Investment Operations
18,448,384 10,088,778 2,394,680
Dividends on Preferred Shares from
Net Investment Income
(3,851,040) (2,456,924) (655,578)
Net Increase in Net Assets Applicable to Common Shareholders Resulting from Investment Operations $14,597,344 $7,631,854 $1,739,102

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 25




Table of Contents

PIMCO Municipal Income Funds III 
Statements of Changes in Net Assets
Applicable to Common Shareholders


  Municipal III
  Six Months
ended
March 31, 2006
(unaudited)
Year ended
September 30, 2005
Investment Operations:    
Net investment income $17,614,494 $35,256,068
Net realized gain (loss) on investments, futures contracts and options written 5,120,778 (22,151,923)
Net change in unrealized appreciation/depreciation of investments, futures contracts and options written (4,286,888) 33,405,856
Net increase in net assets resulting from investment operations 18,448,384 46,510,001
Dividends on Preferred Shares from Net Investment Income: (3,851,040) (5,463,958)
Net increase in net assets applicable to common shareholders
resulting from investment operations
14,597,344 41,046,043
Dividends to Common Shareholders from Net Investment Income: (14,744,392) (30,996,914)
Capital Share Transactions:    
Reinvestment of dividends 1,424,602 1,759,714
Total increase (decrease) in net assets applicable to common shareholders 1,277,554 11,808,843
Net Assets Applicable to Common Shareholders:    
Beginning of period 457,487,366 445,678,523
End of period (including undistributed (dividends in excess of) net investment income of $(1,447,631) and $(466,693); $1,368,720 and $2,145,768; $(59,897) and $189,610; respectively) $458,764,920 $457,487,366
Common Shares Issued in Reinvestment of Dividends: 97,030 119,628

26 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06| See accompanying Notes to Financial Statements




Table of Contents

California Municipal III New York Municipal III
Six Months
ended
March 31, 2006
(unaudited)
Year ended
September 30, 2005
Six Months
ended
March 31, 2006
(unaudited)
Year ended
September 30, 2005
       
$11,942,919 $24,397,382 $2,922,478 $6,132,920
3,415,109 (16,488,623) 879,895 (3,676,942)
(5,269,250) 30,236,548 (1,407,693) 7,007,412
10,088,778 38,145,307 2,394,680 9,463,390
(2,456,924) (3,236,012) (655,578) (861,214)
7,631,854 34,909,295 1,739,102 8,602,176
(10,263,043) (20,459,775) (2,516,407) (5,233,023)
       
850,125 652,960 265,620 208,100
(1,781,064) 15,102,480 (511,685) 3,577,253
       
315,962,582 300,860,102 82,042,608 78,465,355
$314,181,518 $315,962,582 $81,530,923 $82,042,608
57,707 43,899 17,660 13,815

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 27




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


1. Organization and Significant Accounting Policies

PIMCO Municipal Income Fund IIII (‘‘Municipal III’’), PIMCO California Municipal Income Fund III (‘‘California Municipal III’’) and PIMCO New York Municipal Income Fund III (‘‘New York Municipal III’’) collectively referred to as the ‘‘Funds’’ or ‘‘PIMCO Municipal Income Funds III’’, were organized as Massachusetts business trusts on August 20, 2002. Prior to commencing operations on October 31, 2002, the Funds had no operations other than matters relating to their organization and registration as closed-end management investment companies registered under the Investment Company Act of 1940 and the rules and regulations there under, as amended. Allianz Global Investors Fund Management LLC (the ‘‘Investment Manager’’), serves as the Funds’ Investment Manager and is an indirect wholly-owned subsidiary of Allianz Global Investors of America L.P. (‘‘Allianz Global’’). Allianz Global is an indirect, majority-owned subsidiary of Allianz AG. The Fund has an unlimited amount of $0.00001 par value common stock authorized.

Municipal III invests substantially all of its assets in a portfolio of municipal bonds, the interest from which is exempt from federal income taxes. California Municipal III invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal and California state income taxes. New York Municipal III invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal, New York State and New York City income taxes. The Funds will seek to avoid bonds generating interest income which could potentially subject individuals to alternative minimum tax. The issuers' abilities to meet their obligations may be affected by economic and political developments in a specific state or region.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds based upon events that have not yet been asserted. However, the Funds expect the risk of any loss to be remote.

The following is a summary of significant accounting policies consistently followed by the Funds:

(a) Valuation of Investments

Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security may be fair-valued, in good faith, pursuant to guidelines established by the Board of Trustees. The Funds' investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or are valued at the last sale price on the exchange that is the primary market for such securities, or the last quoted bid price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. The independent pricing service uses information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange traded options and futures are valued at the settlement price determined by the relevant exchange. Short-term investments maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily until settlement at the forward settlement value. The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold and the differences could be material to the financial statements. The Funds’ net asset values are determined daily as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (‘‘NYSE’’) on each day the NYSE is open for business.

(b) Investment Transactions and Investment Income

Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the identified cost basis. Interest income is recorded on an accrual basis. Original issue discounts or premiums on debt securities purchased are accreted or amortized daily to non-taxable interest income. Market discount, if any, is accreted daily to taxable income.

(c) Federal Income Taxes

The Funds intend to distribute all of their taxable income and to comply with the other requirements of the U.S. Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no provision for U.S. federal income taxes is required.

28 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


1. Organization and Significant Accounting Policies (continued)

(d) Dividends and Distributions — Common Stock

The Funds declare dividends from net investment income monthly to common shareholders. Distributions of net realized capital gains, if any, are paid at least annually. Each Fund records dividends and distributions to its shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These ‘‘book-tax’’ differences are considered either temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal income tax treatment; temporary differences do not require reclassification. To the extent dividends and/or distributions exceed current and accumulated earnings and profits for federal income tax purposes, they are reported as dividends and/or distributions of paid-in capital in excess of par.

(e) Futures Contracts

A futures contract is an agreement between two parties to buy and sell a financial instrument at a set price on a future date. Upon entering into such a contract, the Funds are required to pledge to the broker an amount of cash or securities, equal to the minimum ‘‘initial margin’’ requirements of the exchange. Pursuant to the contracts, the Funds agree to receive from or pay to the broker an amount of cash or securities equal to the daily fluctuation in the value of the contracts. Such receipts or payments are known as ‘‘variation margin’’ and are recorded by the Funds as unrealized appreciation or depreciation. When the contracts are closed, the Funds record a realized gain or loss equal to the difference between the value of the contracts at the time they were opened and the value at the time they were closed. Any unrealized appreciation or depreciation recorded is simultaneously reversed. The use of futures transactions involves the risk of an imperfect correlation in the movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts.

(f) Option Transactions

The Funds may purchase and write (sell) put and call options on securities for hedging purposes, risk management purposes or as part of its investment strategy. The risk associated with purchasing an option is that the Funds pay a premium whether or not the option is exercised. Additionally, the Funds bear the risk of loss of premium and change in market value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. The cost of securities acquired through the exercise of call options is increased by the premiums paid. The proceeds from securities sold through the exercise of put options is decreased by the premiums paid.

When an option is written, the premium received is recorded as an asset with an equal liability, which is subsequently adjusted to the current market value of the option written. These liabilities are reflected as options written in the Statement of Assets and Liabilities. Premiums received from writing options which expire unexercised are recorded on the expiration date as a realized gain. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchased transactions, as a realized loss. If a call option written by the Funds is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether there has been a realized gain or loss. If a put option written by the Funds is exercised, the premium reduces the cost basis of the security. In writing an option, the Funds bear the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of a written option could result in the Funds purchasing a security at a price different from the current market value.

(g)   Residual Interest Municipal Bonds (‘‘RIBS’’)/Residual Interest Tax Exempt Bonds (‘‘RITES’’)

The Funds invest in RIBS and RITES whose interest rates bear an inverse relationship to the interest rate on another security or the value of an index. RIBS and RITES are created by dividing the income stream provided by the underlying bonds to create two securities, one short-term and one long-term. The interest rate on the short-term component is reset by an index or auction process normally every seven to 35 days. After income is paid on the short-term securities at current rates, the residual income from the underlying bond(s) goes to the long-term securities. Therefore, rising short-term interest rates result in lower income for the longer-term portion, and vice versa. The longer-term bonds may be more volatile and less liquid than other municipal bonds of comparable maturity. Investments in RIBS and RITES typically will involve greater risk than an investment in a fixed-rate bond The Funds may also invest in RIBS and RITES for the purpose of increasing their leverage.

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 29




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


1. Organization and Significant Accounting Policies (continued)

(h) When-Issued/Delayed-Delivery Transactions

The Funds may purchase or sell securities on a when-issued or delayed-delivery basis. The transactions involve a commitment to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery purchases are outstanding, the Funds will set aside and maintain until the settlement date in a designated account, liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed-delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. The Funds may dispose of or renegotiate a delayed-delivery transaction after it is entered into, and may sell when-issued securities before they are delivered, which may result in a realized gain or loss. When a security on a delayed-delivery basis is sold, the Fund does not participate in future gains and losses with respect to the security.

(i) Custody Credits Earned on Cash Balances

The Funds benefit from an expense offset arrangement with their custodian bank whereby uninvested cash balances earn credits which reduce monthly custodian and accounting agent expenses. Had these cash balances been invested in income producing securities, they would have generated income for the Funds.

2. Investment Manager /Sub-Adviser

Each Fund has entered into an Investment Management Agreement (the ‘‘Agreements’’) with the Investment Manager. Subject to the supervision by each Fund's Board of Trustees, the Investment Manager is responsible for managing, either directly or through others selected by it, each Fund's investment activities, business affairs and administrative matters. Pursuant to the Agreements, the Investment Manager receives an annual fee, payable monthly, at the annual rate of 0.65% of each Fund’s average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding. In order to reduce each Fund’s expenses, the Investment Manager has contractually agreed to waive a portion of its investment management fee for each Fund at the annual rate of 0.15% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding, from the commencement of operations through October 31, 2007, and for a declining amount thereafter through October 31, 2009.

The Investment Manager has retained its affiliate, Pacific Investment Management Company LLC (the ‘‘Sub-Adviser’’) to manage each Fund’s investments. Subject to the supervision of the Investment Manager, the Sub-Adviser makes all investment decisions for the Funds. The Investment Manager, not the Funds, pays a portion of the fees it receives to the Sub-Adviser in return for its services, at the maximum annual rate of 0.50% of each Funds average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding. The Sub-Adviser has contractually agreed to waive a portion of the fees it is entitled to receive from the Investment Manager, such that the Sub-Adviser will receive 0.26% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding, from the commencement of the Funds’ operations through October 31, 2007, and will receive an increasing amount not to exceed 0.50% of each Fund’s average daily net assets, including net assets attributable to any preferred shares that may be outstanding thereafter through October 31, 2009.

3. Investments in Securities

For the six months ended March 31, 2006, purchases and sales of investments, other than short-term securities, were:


  Municipal III California
Municipal III
New York
Municipal III
Purchases $121,933,305 $55,118,476 $8,551,780
Sales   147,279,900   39,981,469   9,106,801

30 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


3. Investments in Securities (continued)

a) Futures contracts outstanding at March 31, 2006:


Fund Type Notional
Value
(000)
Expiration
Date
Unrealized
Appreciation
(Depreciation)
Municipal III Long:    Financial Future Euro—90 day $     143 6/18/07 $(35,012)
          Financial Future Euro—90 day 143 9/17/07 (33,375)
          Financial Future Euro—90 day 143 12/17/07 (34,087)
          Financial Future Euro—90 day 143 3/17/08 (33,375)
          U.S. Treasury Notes 5 yr. Futures 992 6/30/06 (777,461)
  Short:   U.S. Treasury Bond Futures (2,122) 6/21/06 6,168,882
        $5,255,572
California Municipal III Long:    Financial Future Euro—90 day $     310 6/18/07 $(64,375)
          Financial Future Euro—90 day 310 9/17/07 (60,300)
          Financial Future Euro—90 day 310 12/17/07 (61,850)
          Financial Future Euro—90 day 310 3/17/08 (60,300)
          U.S. Treasury Notes 5 yr. Futures 354 6/30/06 (253,672)
  Short:   U.S. Treasury Bond Futures (1,304) 6/21/06 3,433,539
        $2,933,042
New York Municipal III Long:   U.S. Treasury Notes 5 yr. Futures $     147 6/30/06 $(106,273)
  Short:   U.S. Treasury Bond Futures (339) 6/21/06 1,067,148
        $960,875

(b) Transactions in options written for the six months ended March 31, 2006:


  Contracts Premiums
Municipal III:    
Options outstanding, September 30, 2005 2,494 $682,598
Options written 2,465 729,167
Options expired (3,503) (1,008,208)
Options terminated in closing purchase transactions (478) (156,767)
Options outstanding, March 31, 2006 978 $246,790
     
California Municipal III:    
Options outstanding, September 30, 2005 2,125 $578,422
Options written 2,306 682,392
Options expired (2,937) (847,530)
Options terminated in closing purchase transactions (472) (155,246)
Options outstanding, March 31, 2006 1,022 $258,038
     
New York Municipal III:    
Options outstanding, September 30, 2005 446 $121,472
Options written 355 111,534
Options expired (615) (177,965)
Options terminated in closing purchase transactions (93) (30,640)
Options outstanding, March 31, 2006 93 $24,401

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 31




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


4. Income Tax Information

The cost of investments for federal income tax purposes and gross unrealized appreciation and gross unrealized depreciation of investments at March 31, 2006 were:


  Cost of
Investments
Gross Unrealized
Appreciation
Gross Unrealized
Depreciation
Net Unrealized
Appreciation
Municipal III $673,708,035 $41,820,622 $1,722,769 $40,097,853
California Municipal III 461,223,585 30,018,981 838,588 29,180,393
New York Municipal III 117,890,673 8,263,262 210,302 8,052,960

5. Auction Preferred Shares

Municipal III has issued 2,160 shares of Preferred Shares Series A, 2,160 shares of Preferred Shares Series B, 2,160 shares of Preferred Shares Series C, 2,160 shares of Preferred Shares Series D and 2,160 shares of Preferred Shares Series E, each with a net asset and liquidation value of $25,000 per share plus accrued dividends.

California Municipal III has issued 3,700 shares of Preferred Shares Series A, 3,700 shares of Preferred Shares Series B each with a net asset and liquidation value of $25,000 per share plus accrued dividends.

New York Municipal III has issued 1,880 shares of Preferred Shares Series A with a net asset and liquidation value of $25,000 per share plus accrued dividends.

Dividends and distributions of net realized long-term capital gains, if any, are accumulated daily at an annual rate (typically re-set every seven days) through auction procedures.

For the six months ended March 31, 2006, the annualized dividend rates ranged from:


  High Low At March 31, 2006
Municipal III:      
Series A 4.35% 2.29% 2.75%
Series B 4.40% 2.40% 2.85%
Series C 4.45% 2.20% 2.80%
Series D 4.35% 2.25% 2.81%
Series E 4.35% 2.25% 2.90%
California Municipal III:      
Series A 4.40% 2.16% 2.90%
Series B 4.45% 2.04% 3.05%
New York Municipal III:      
Series A 4.35% 2.45% 2.90%

The Funds are subject to certain limitations and restrictions while Preferred Shares are outstanding. Failure to comply with these limitations and restrictions could preclude the Funds from declaring any dividends or distributions to common shareholders or repurchasing common shares and/or triggering the mandatory redemption of Preferred Shares at their liquidation value.

6. Subsequent Common Dividend Declarations

On April 3, 2006, the following dividends were declared to common shareholders payable May 1, 2006 to shareholders of record on April 13, 2006:


Municipal III $0.07 per common share
California Municipal III $0.08 per common share
New York Municipal III $0.07 per common share

32 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06




Table of Contents

PIMCO Municipal Income Funds III 
Notes to Financial Statements

March 31, 2006 (unaudited)


6. Subsequent Common Dividend Declarations (continued)

On May 1, 2006 the following dividends were declared to common shareholders payable June 1, 2006 to shareholders of record on May 11, 2006:


Municipal III $0.07 per common share
California Municipal III $0.08 per common share
New York Municipal III $0.07 per common share

7. Legal Proceedings

In June and September 2004, the Investment Manager, certain of its affiliates (Allianz Global Investors Distributors LLC and PEA Capital LLC) and Allianz Global, agreed to settle, without admitting or denying the allegations, claims brought by the Securities and Exchange Commission (the ‘‘Commission’’), the New Jersey Attorney General and the California Attorney General alleging violations of federal and state securities laws with respect to certain open-end funds for which the Investment Manager serves as investment adviser. Two settlements (with the Commission and New Jersey) related to an alleged ‘‘market timing’’ arrangement in certain open-end funds sub-advised by PEA Capital. Two settlements (with the Commission and California) related to the alleged use of cash and fund portfolio commissions to finance ‘‘shelf-space’’ arrangements with broker-dealers for open-end funds. The Investment Manager and its affiliates agreed to pay a total of $68 million to settle the claims related to market timing and $20.6 million to settle the claims related to shelf space. The settling parties also agreed to make certain corporate governance changes. None of the settlements allege that any inappropriate activity took place with respect to the Funds.

Since February 2004, the Investment Manager and certain of its affiliates and their employees have been named as defendants in a number of pending lawsuits concerning ‘‘market timing,’’ and ‘‘revenue sharing/shelf space/directed brokerage,’’ which allege the same or similar conduct underlying the regulatory settlements discussed above. The market timing lawsuits have been consolidated in a Multi-District Litigation in the United States District Court for the District of Maryland, and the revenue sharing/shelf space/directed brokerage lawsuits have been consolidated in the United States District Court for the District of Connecticut. Any potential resolution of these matters may include, but not be limited to, judgments or settlements for damages against the Investment Manager or its affiliates or related injunctions. The Investment Manager believes that other similar lawsuits may be filed in federal or state courts in the future.

Under Section 9(a) of the 1940 Act, if any of the various regulatory proceedings or lawsuits were to result in a court injunction against the Investment Manager, Allianz Global and/or their affiliates, they and their affiliates would, in the absence of exemptive relief granted by the Commission, be barred from serving as an investment adviser/sub-adviser or principal underwriter for any registered investment company, including the Fund. In connection with an inquiry from the Commission concerning the status of the New Jersey settlement referenced above with regard to any implications under Section 9(a), the Investment Manager and certain of its affiliates, including the Investment Adviser, (together, the ‘‘Applicants’’) have sought exemptive relief from the Commission under Section 9(c) of the 1940 Act. The Commission has granted the Applicants a temporary exemption from the provisions of Section 9(a) with respect to the New Jersey settlement until the earlier of (i) September 13, 2006 and (ii) the date on which the Commission takes final action on their application for a permanent exemptive order. There is no assurance that the Commission will issue a permanent order. If a court injunction were to be issued against the Investment Manager or the Affiliates with respect to any of the other matters referenced above, the Investment Manager or the affiliates would, in turn, seek similar exemptive relief under Section 9(c) with respect to that matter, although there is no assurance that such exemptive relief would be granted.

The Investment Manager and the Sub-Adviser believe that these matters are not likely to have a material adverse effect on the Funds or on their ability to perform their respective investment advisory activities relating to the Funds.

The foregoing speaks only as of the date hereof.

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 33




Table of Contents

PIMCO Municipal Income Fund III 
Financial Highlights

For a share of common stock outstanding throughout each period:



  Six Months
ended
March 31, 2006
(unaudited)
    
Year Ended
For the period 
October 31, 2002* 
through 
September 30, 2003 
  September 30, 2005 September 30, 2004
Net asset value, beginning of period   $14.68     $14.36     $14.05     $14.33 ** 
Investment Operations:                        
Net investment income   0.56     1.14     1.18     0.78  
Net realized and change in unrealized gain (loss) on investments,
futures contracts and options written
  0.03     0.36     0.22     (0.08
Total from investment operations   0.59     1.50     1.40     0.70  
Dividends on Preferred Shares from
    Net Investment Income:
  (0.12   (0.18   (0.09   (0.06
Net increase in net assets applicable to common shareholders resulting from investment operations   0.47     1.32     1.31     0.64  
Dividends to Common Shareholders     from Net Investment Income:   (0.47   (1.00   (1.00   (0.79
Capital Share Transactions:                        
Common stock offering costs charged to paid-in capital in excess of par               (0.03
Preferred shares offering costs/
underwriting discounts charged to paid-in capital in excess of par
              (0.10
Total capital share transactions               (0.13
Net asset value, end of period   $14.68     $14.68     $14.36     $14.05  
Market price, end of period   $14.73     $15.49     $14.30     $14.20  
Total Investment Return (1)   (1.80 )%    15.95   8.10   0.05
RATIOS/SUPPLEMENTAL DATA:                        
Net assets applicable to common shareholders, end of period (000)   $458,765     $457,487     $445,679     $435,169  
Ratio of expenses to average net
assets (2)(3)(5)
  1.04 %(4)    1.03   1.05   0.99 %(4) 
Ratio of net investment income to average net assets (2)(5)   7.76 %(4)    7.74   8.25   6.05 %(4) 
Preferred shares asset coverage per share   $67,468     $67,352     $66,261     $65,284  
Portfolio turnover   17   9   20   62
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock at the current market price on the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.
(2) Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment manager waived a portion of its investment management fee. If such a waiver had not been in effect, the ratio of expenses to average net assets and the ratio of net investment income to average net assets would have been 1.28% (annualized) and 7.52% (annualized), respectively for the six months ended March 31, 2006, 1.27% and 7.50% respectively for the year ended September 30, 2005, 1.29% and 8.01%, respectively for the year ended September 30, 2004 and 1.22% (annualized) and 5.82% (annualized), respectively for the period October 31, 2002 (commencement of operations) through September 30, 2003.

34 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06| See accompanying Notes to Financial Statements




Table of Contents

PIMCO California Municipal Income Fund III 
Financial Highlights

For a share of common stock outstanding throughout each period:



  Six Months
ended
March 31, 2006
(unaudited)
Year Ended For the period   
October 31, 2002*
through
September 30,
2003
  September 30, 2005 September 30, 2004
Net asset value, beginning of period   $14.80     $14.12     $13.43     $14.33 ** 
Investment Operations:                  
Net investment income   0.55     1.14     1.23     0.71  
Net realized and change in unrealized gain (loss) on investments,
futures contracts and options written
  (0.08   0.65     0.51     (0.66
Total from investment operations   0.47     1.79     1.74     0.05  
Dividends on Preferred Shares from     Net Investment Income:   (0.11   (0.15   (0.09   (0.06
Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations   0.36     1.64     1.65     (0.01
Dividends to Common Shareholders     from Net Investment Income:   (0.48   (0.96   (0.96   (0.76
Capital Share Transactions:                  
Common stock offering costs charged to paid-in capital in excess of par               (0.03
Preferred shares offering costs/ underwriting discounts charged to paid-in capital in excess of par               (0.10
Total capital share transactions               (0.13
Net asset value, end of period   $14.68     $14.80     $14.12     $13.43  
Market price, end of period   $15.90     $15.11     $13.74     $13.62  
Total Investment Return (1)   8.69   17.48   8.22   (4.10 )% 
RATIOS/SUPPLEMENTAL DATA:                        
Net assets applicable to common shareholders, end of period (000)   $314,182     $315,963     $300,860     $285,279  
Ratio of expenses to average net
assets (2)(3)(5)
  1.05 %(4)    1.05   1.08   1.01 %(4) 
Ratio of net investment income to average net assets (2)(5)   7.65 %(4)    7.82   8.79   5.63 %(4) 
Preferred shares asset coverage per share   $67,450     $67,692     $65,650     $63,539  
Portfolio turnover   8   8   39   123
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock at the current market price on the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.
(2) Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment manager waived a portion of its investment management fee. If such a waiver had not been in effect, the ratio of expenses to average net assets and the ratio of net investment income to average net assets would have been 1.29% (annualized) and 7.41% (annualized), respectively for the six months ended March 31, 2006, 1.29% and 7.58% respectively for the year ended September 30, 2005, 1.32% and 8.55%, respectively for the year ended September 30, 2004 and 1.24% (annualized) and 5.40% (annualized), respectively for the period October 31, 2002 (commencement of operations) through September 30, 2003.

See accompanying Notes to Financial Statements | 3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 35




Table of Contents

PIMCO New York Municipal Income Fund III 
Financial Highlights

For a share of common stock outstanding throughout each period:



  Six Months
ended
March 31, 2006
(unaudited)
    
Year Ended
For the period 
October 31, 2002* 
through 
September 30, 2003
  September 30, 2005 September 30, 2004
Net asset value, beginning of period   $15.03     $14.41     $14.14     $14.33 ** 
Investment Operations:                        
Net investment income   0.53     1.13     1.19     0.70  
Net realized and change in unrealized gain (loss) on investments,
futures contracts and options written
  (0.10   0.61     0.12     0.08  
Total from investment operations   0.43     1.74     1.31     0.78  
Dividends on Preferred Shares from
    Net Investment Income:
  (0.12   (0.16   (0.08   (0.06
Net increase in net assets applicable to common shareholders resulting from investment operations   0.31     1.58     1.23     0.72  
Dividends to Common Shareholders     from Net Investment Income:   (0.46   (0.96   (0.96   (0.76
Capital Share Transactions:                        
Common stock offering costs charged to paid-in capital in excess of par               (0.03
Preferred shares offering costs/
underwriting discounts charged to paid-in capital in excess of par
              (0.12
Total capital share transactions               (0.15
Net asset value, end of period   $14.88     $15.03     $14.41     $14.14  
Market price, end of period   $15.08     $16.04     $14.30     $13.68  
Total Investment Return (1)   (3.07 )%    19.65   11.93   (3.77 )% 
RATIOS/SUPPLEMENTAL DATA:                        
Net assets applicable to common shareholders, end of period (000)   $81,531     $82,043     $78,465     $76,975  
Ratio of expenses to average net
assets (2)(3)(5)
  1.24 %(4)    1.24   1.19   1.14 %(4) 
Ratio of net investment income to average net assets (2)(5)   7.23 %(4)    7.54   8.23   5.47 %(4) 
Preferred shares asset coverage
per share
  $68,354     $68,627     $66,732     $65,942  
Portfolio turnover   7   5   16   217
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting discount of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of a share of common stock at the current market price on the first day of each period and a sale of a share of common stock at the current market price on the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions or sales charges. Total investment return for a period of less than one year is not annualized.
(2) Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.
(3) Inclusive of expenses offset by custody credits earned on cash balances at the custodian bank. (See note 1(i) in Notes to Financial Statements).
(4) Annualized.
(5) During the periods indicated above, the Investment manager waived a portion of its investment management fee. If such a waiver had not been in effect, the ratio of expenses to average net assets and the ratio of net investment income to average net assets would have been 1.48% (annualized) and 6.99% (annualized), respectively for the six months ended March 31, 2006, 1.48% and 7.30% respectively for the year ended September 30, 2005, 1.43% and 7.99%, respectively for the year ended September 30, 2004 and 1.37% (annualized) and 5.24% (annualized), respectively for the period October 31, 2002 (commencement of operations) through September 30, 2003.

36 PIMCO Municipal Income Funds III Semi-Annual Report | 3.31.06| See accompanying Notes to Financial Statements




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PIMCO Municipal Income Funds III 
Annual Shareholder Meetings Results (unaudited)

The Funds held their annual meetings of shareholders on December 28, 2005. Common/Preferred shareholders of each fund voted to re-elect Paul Belica and David C. Flattum as Class III Trustees to serve until 2008.

The resulting vote count is indicated below:


  Affirmative Withheld
Authority
Municipal III    
Re-election of Paul Belica 27,731,732 344,878
Re-election of David C. Flattum 27,821,572 255,038
California Municipal III    
Re-election of Paul Belica 18,872,467 172,225
Re-election of David C. Flattum 18,909,604 135,088
New York Municipal III    
Re-election of Paul Belica 4,966,231 68,806
Re-election of David C. Flattum 4,978,452 56,585

Messrs. Robert E Connor, Jack J. Dalessandro*, Hans W. Kertess* and R. Peter Sullivan III continue to serve as Trustees of the Funds.

*    Preferred Shares Trustee

3.31.06 | PIMCO Municipal Income Funds III Semi-Annual Report 37




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Trustees and Principal Officers

Robert E. Connor
    Trustee, Chairman of the Board of Trustees
Paul Belica
    Trustee
John J. Dalessandro II
    Trustee
David C. Flattum
    Trustee
Hans W. Kertess
    Trustee
R. Peter Sullivan III
    Trustee
Brian S. Shlissel
    President & Chief Executive Officer
Lawrence G. Altadonna
    Treasurer, Principal Financial & Accounting Officer
Thomas J. Fuccillo
    Secretary & Chief Legal Officer
Youse Guia
    Chief Compliance Officer

Investment Manager

Allianz Global Investors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105

Sub-Adviser

Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660

Custodian & Accounting Agent

State Street Bank & Trust Co.
801 Pennsylvania
Kansas City, MO 64105-1307

Transfer Agent, Dividend Paying Agent and Registrar

PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017

Legal Counsel

Ropes & Gray LLP
One International Place
Boston, MA 02210-2624

This report, including the financial information herein, is transmitted to the shareholders of PIMCO Municipal Income Fund III, PIMCO California Municipal Income Fund III and PIMCO New York Municipal Income Fund III for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Funds or any securities mentioned in this report.

The financial information included herein is taken from the records of the Funds without examination by an independent registered public accounting firm, who did not express an opinion hereon.

Notice is hereby given in accordance with Section 23 (c) of the Investment Company Act of 1940, as amended, that from time to time each Fund may purchase shares of its common stock in the open market.

The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the "SEC") for the first and third quarters of their fiscal year on Form N-Q. The Funds’ Forms N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room located in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The information on Form N-Q is also available on the Funds’ website at www.allianzinvestors.com/closedendfunds.

A description of the policies and procedures that the Funds have adopted to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities held during the twelve months ended June 30, 2005 is available (i) without charge, upon request by calling the Funds’ shareholder agent at (800) 331-1710; (ii) on the Funds’ website at www.allianzinvestors.com/closedendfunds: and (iii) on the Securities and Exchange Commission’s website at www.sec.gov.

Information on the Funds is available at www.allianzinvestors.com/closedendfunds or by calling the Funds’ shareholder servicing agent at (800) 331-1710.




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ITEM 2.  CODE OF ETHICS

         Not required in this filing.

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT

         Not required in this filing.

ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Not required in this filing.

ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANT


ITEM 6.  SCHEDULE OF INVESTMENTS

         Schedule of Investments is included as part of the report to
         shareholders filed under Item 1 of this form.

ITEM 7.  DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
         MANAGEMENT INVESTMENT COMPANIES

         Not required in this filing.

ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

         Not required in this filing.

ITEM 9.  PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
         COMPANY AND AFFILIATED COMPANIES.



                                                            TOTAL NUMBER
                                                            OF SHARES PURCHASED       MAXIMUM NUMBER OF
                         TOTAL NUMBER       AVERAGE         AS PART OF PUBLICLY       SHARES THAT MAY YET BE
                         OF SHARES          PRICE PAID      ANNOUNCED PLANS OR        PURCHASED UNDER THE PLANS
        PERIOD           PURCHASED          PER SHARE       PROGRAMS                  OR PROGRAMS

October 2005               N/A                15.143          3,277                      N/A
November 2005              N/A                14.70           3,256                      N/A
December 2005              N/A                14.849          3,149                      N/A
December 2005              N/A                15.39           2,772                      N/A
February 2006              N/A                15.181          2,814                      N/A
March 2006                 N/A                15.05           2,392                      N/A


ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Trustees since the Fund last provided
disclosure in response to this item.

ITEM 11. CONTROLS AND PROCEDURES

(a) The registrant's President and Chief Executive Officer and Principal
Financial Officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940, as amended are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this document.




(b) There were no significant changes in the registrant's internal controls or
in factors that could affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

ITEM 12. EXHIBITS

(a)   (1) Exhibit 99.302 CERT - Certification pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002


(b)       Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002


Signature

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

PIMCO New York Municipal Income Fund III

By /s/ Brian S. Shlissel
------------------------
Brian S. Shlissel, President & Chief Executive Officer

Date: June 7, 2006

By /s/ Lawrence G. Altadonna
----------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: June 7, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/ Brian S. Shlissel
------------------------
Brian S. Shlissel, President & Chief Executive Officer

Date: June 7, 2006

By /s/ Lawrence G. Altadonna
----------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: June 7, 2006