SEC Form 5
FORM 5 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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OMB Number: 3235-0362
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 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
  
 Form 3 Holdings Reported.
X
 Form 4 Transactions Reported.
1. Name and Address of Reporting Person*
GROSS WILLIAM H
(Last) (First) (Middle)
840 NEWPORT CENTER DRIVE
SUITE 100
(Street)
NEWPORT BEACH CA 92660
(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
PIMCO MUNICIPAL INCOME FUND III [ PMX ] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
Officer (give title below) X Other (specify below)
EXECUTIVE COMMITTEE MEMBER
3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
09/30/2008
4. If Amendment, Date of Original Filed (Month/Day/Year)
 6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Amount (A) or (D) Price
COMMON STOCK 05/09/2003 P4 11,666(1) A $14.4971 11,666 I BY CHILD'S TRUST #1
COMMON STOCK 05/09/2003 P4 11,667(1) A $14.4971 11,667 I BY CHILD'S TRUST #2
COMMON STOCK 05/09/2003 P4 11,667(1) A $14.4971 11,667 I BY CHILD'S TRUST #3
COMMON STOCK 05/22/2003 P4 666(1) A $14.63 666 I BY CHILD'S TRUST #1
COMMON STOCK 05/22/2003 P4 666(1) A $14.63 666 I BY CHILD'S TRUST #2
COMMON STOCK 05/22/2003 P4 668(1) A $14.63 668 I BY CHILD'S TRUST #3
COMMON STOCK 02/07/2005 P4 767 A $14.97 767 I BY CHILD'S TRUST #1
COMMON STOCK 02/07/2005 P4 766 A $14.97 766 I BY CHILD'S TRUST #2
COMMON STOCK 02/07/2005 P4 767 A $14.97 767 I BY CHILD'S TRUST #3
COMMON STOCK 02/08/2005 P4 833 A $14.97 833 I BY CHILD'S TRUST #1
COMMON STOCK 02/08/2005 P4 834 A $14.97 834 I BY CHILD'S TRUST #2
COMMON STOCK 02/08/2005 P4 833 A $14.97 833 I BY CHILD'S TRUST #3
COMMON STOCK 02/09/2005 P4 15,067 A $14.9597 15,067 I BY CHILD'S TRUST #1
COMMON STOCK 02/09/2005 P4 15,066 A $14.9597 15,066 I BY CHILD'S TRUST #2
COMMON STOCK 02/09/2005 P4 15,067 A $14.9597 15,067 I BY CHILD'S TRUST #3
COMMON STOCK 12/20/2006 G4 370,700 D $0 370,700 D
COMMON STOCK 12/05/2007 S4 1,600 D $14.53 1,600 D
COMMON STOCK 12/06/2007 S4 4,100 D $14.53 4,100 D
COMMON STOCK 12/10/2007 S4 25,811.066 D $14.22 40,000(2)(3) D
COMMON STOCK 28,999(2)(3) I BY CHILD'S TRUST #1
COMMON STOCK 28,999(2)(3) I BY CHILD'S TRUST #2
COMMON STOCK 29,002(2)(3) I BY CHILD'S TRUST #3
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Explanation of Responses:
1. The Form 5 filed on behalf of the Reporting Person on 04/15/04 under issuer PIMCO Municipal Income Fund II ("PML") reported the acquisition of an aggregate 37,000 shares (the "Shares") held in the name of the Reporting Person's childrens' trusts. It was subsequently determined that the Shares should have been filed as an acquisition under this issuer, PIMCO Municipal Income Fund III ("PMX").
2. The Form 5 filed on behalf of the Reporting Person on 04/15/04 under this issuer, PIMCO Municipal Income Fund III ("PMX"), reported the acquisition of 86,400 shares (the "Shares") held in the name of the Reporting Person's children. It was subsequently determined that the Shares should have been filed as an acquisition under a different fund, PIMCO Municipal Income Fund II ("PML"). Such Shares have been reported as an acquisition under issuer PML on Form 5 filed on the date hereof and the current holdings for this issuer, PMX, as reported on this Form 5 excludes such Shares. Additionally, the Reporting Person acquired an aggregate of 17,261.0660 shares (the "Reinvestment Shares") on various dates under a qualifying dividend reinvestment plan. The Reinvestment Shares were not previously reported in the Reporting Person's aggregate holdings and all such Shares have been sold in previously reported transactions.
3. Reflects the aggregate form and amount of securities beneficially owned as of the FYE reported in Box 3.
Remarks:
Pacific Investment Management Company LLC (PIMCO) is the investment adviser of the issuer. Mr. Gross is a member of PIMCO's Executive Committee.
/S/ STEVEN LUDWIG, ATTORNEY-IN-FACT FOR WILLIAM H. GRO 12/22/2008
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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