UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21242

Nuveen Quality Preferred Income Fund 3

(Exact name of registrant as specified in charter)

     333 West Wacker Drive, Chicago, Illinois 60606     
(Address of principal executive offices) (Zip code)

Kevin J. McCarthy—Vice President and Secretary
     333 West Wacker Drive, Chicago, Illinois 60606     
(Name and address of agent for service)

Registrant’s telephone number, including area code:      312-917-7700     

Date of fiscal year end:        12/31      

Date of reporting period:    9/30/2008   

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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. § 3507.

TABLE OF CONTENTS

	Item 1. Schedule of Investments
	Item 2. Controls and Procedures
	Item 3. Exhibits
SIGNATURES
EX-99.CERT

Item 1. Schedule of Investments

Portfolio of Investments (Unaudited)

Nuveen Quality Preferred Income Fund 3 (JHP)
September 30, 2008

Shares		Description (1)	Coupon	Ratings (2)	Value
		$25 Par (or similar) Preferred Securities – 101.2% (62.4% of Total Investments)
		Capital Markets – 9.7%
	725	BNY Capital Trust V, Series F	5.950%	A	$	13,180
	541,100	Deutsche Bank Capital Funding Trust II	6.550%	A		7,845,950
	11,900	Goldman Sachs Group Inc., Series GSC-3 (PPLUS)	6.000%	A1		165,410
	12,000	Goldman Sachs Group Inc., Series GSC-4 Class A (PPLUS)	6.000%	A1		172,200
	42,087	JP Morgan Chase & Company	8.625%	A		1,051,754
	61,894	Merrill Lynch Preferred Capital Trust III	7.000%	A3		897,463
	21,200	Merrill Lynch Preferred Capital Trust IV	7.120%	A3		307,188
	88,000	Merrill Lynch Preferred Capital Trust V	7.280%	A3		1,293,600
	147,223	Morgan Stanley Capital Trust III	6.250%	A2		1,690,120
	2,462	Morgan Stanley Capital Trust V	5.750%	A2		26,565
	23,400	Morgan Stanley Capital Trust VI	6.600%	A2		276,120
	14,218	Morgan Stanley Capital Trust VII	6.600%	A2		168,483
		Total Capital Markets				13,908,033
		Commercial Banks – 16.5%
	34,700	ASBC Capital I	7.625%	A3		624,253
	25,400	BAC Capital Trust V	6.000%	A		457,200
	191,994	Banco Santander Finance	6.800%	Aa3		3,263,898
	17,612	Banco Santander Finance	6.500%	A+		291,126
	246,100	Banesto Holdings, Series A, 144A	10.500%	A1		6,367,838
	29,728	Barclays Bank PLC	8.125%	Aa3		508,349
	44,500	Cobank Agricultural Credit Bank	7.000%	N/R		2,121,137
	16,000	Cobank Agricultural Credit Bank	0.000%	A		805,989
	142,409	Fifth Third Capital Trust VI	7.250%	A-		1,303,042
	12,216	Fleet Capital Trust VIII	7.200%	Aa3		218,666
	119,502	HSBC Finance Corporation	6.875%	AA-		2,393,625
	37,399	National Bank of Greece SA	9.000%	AAA-		747,980
	180,268	National City Capital Trust II	6.625%	Baa1		1,063,581
	30,000	PNC Capital Trust	6.125%	A2		553,500
	75,465	Royal Bank of Scotland Group PLC, Series N	6.350%	A1		728,237
	37,944	Wells Fargo Capital Trust VII	5.850%	AA-		688,684
	77,100	Zions Capital Trust B	8.000%	Baa1		1,522,725
		Total Commercial Banks				23,659,830
		Diversified Financial Services – 8.6%
	300,215	BAC Capital Trust XII	6.875%	A		5,764,128
	4,600	Citigroup Capital Trust VIII	6.950%	A1		77,004
	6,588	Citigroup Capital X	6.100%	A1		88,609
	4,829	Citigroup Capital XV	6.500%	A1		67,606
	29,100	Citigroup Capital XX	7.875%	A1		531,075
	146,300	Citigroup Inc., Series M	8.125%	A		2,413,950
	78,000	General Electric Capital Corporation	6.050%	AAA		1,622,400
	125,700	ING Groep N.V.	7.050%	A		1,654,212
	10,100	ING Groep N.V.	6.125%	A		121,200
		Total Diversified Financial Services				12,340,184
		Diversified Telecommunication Services – 3.2%
	166,088	AT&T Inc.	6.375%	A		3,853,242
	3,300	BellSouth Capital Funding (CORTS)	7.120%	A		77,756
	4,600	BellSouth Corporation (CORTS)	7.000%	A		102,350
	26,600	Verizon Communications (CORTS)	7.625%	A		585,200
		Total Diversified Telecommunication Services				4,618,548
		Electric Utilities – 8.0%
	53,800	Entergy Louisiana LLC	7.600%	A-		1,223,412
	201,047	Entergy Mississippi Inc.	7.250%	A-		4,784,919
	21,800	FPL Group Capital Inc.	7.450%	BBB+		536,498
	22,300	FPL Group Capital Inc.	6.600%	BBB+		466,962
	2,000	National Rural Utilities Cooperative Finance Corporation	6.100%	A3		34,220
	33,018	National Rural Utilities Cooperative Finance Corporation	5.950%	A3		607,861
	33,400	PPL Energy Supply LLC	7.000%	BBB		768,200
	131,500	Xcel Energy Inc.	7.600%	BBB-		3,077,100
		Total Electric Utilities				11,499,172
		Food Products – 0.4%
	11,000	Dairy Farmers of America Inc., 144A	7.875%	BBB-		585,750
		Insurance – 17.6%
	500	Aegon N.V.	6.875%	A-		4,395
	385,838	Aegon N.V.	6.375%	A-		3,291,198
	5,100	AIG Capital Securities, Series 2002-11 (SATURNS)	6.000%	A3		21,522
	30,792	AMBAC Financial Group Inc.	5.950%	A		153,960
	193,549	Arch Capital Group Limited	8.000%	BBB-		3,929,045
	53,300	Berkley WR Corporation, Capital Trust II	6.750%	BBB-		916,760
	139,100	Delphi Financial Group, Inc.	8.000%	BBB+		2,221,427
	92,100	Delphi Financial Group, Inc.	7.376%	BBB-		1,326,240
	110,367	EverestRe Capital Trust II	6.200%	Baa1		1,572,730
	145,575	Financial Security Assurance Holdings	6.250%	AA-		759,902
	174,900	PartnerRe Limited, Series C	6.750%	BBB+		2,842,125
	2,100	PartnerRe Limited, Series D	6.500%	BBB+		35,448
	67,300	PLC Capital Trust III	7.500%	BBB+		881,630
	72,300	PLC Capital Trust IV	7.250%	BBB+		983,280
	4,900	PLC Capital Trust V	6.125%	BBB+		58,800
	296,300	Protective Life Corporation	7.250%	BBB		4,118,570
	78,644	Prudential PLC	6.750%	A-		829,694
	73,466	RenaissanceRe Holdings Limited, Series B	7.300%	BBB		1,120,357
	3,300	RenaissanceRe Holdings Limited	6.600%	BBB		47,916
		Total Insurance				25,114,999
		Media – 7.7%
	70,000	CBS Corporation	6.750%	BBB		1,119,300
	136,800	Comcast Corporation	7.000%	BBB+		2,660,760
	19,000	Comcast Corporation	7.000%	BBB+		364,610
	136,300	Comcast Corporation	6.625%	Baa2		2,412,510
	249,300	Viacom Inc.	6.850%	BBB		4,462,470
		Total Media				11,019,650
		Oil, Gas & Consumable Fuels – 2.8%
	195,200	Nexen Inc.	7.350%	Baa3		3,962,560
		Pharmaceuticals – 0.2%
	8,600	Bristol-Myers Squibb Company (CORTS)	6.250%	A+		187,050
	4,800	Bristol-Myers Squibb Company Trust (CORTS)	6.800%	A+		110,400
		Total Pharmaceuticals				297,450
		Real Estate/Mortgage – 24.5%
	29,400	BRE Properties, Series C	6.750%	BBB-		531,258
	8,229	BRE Properties, Series D	6.750%	BBB-		146,641
	171,200	Developers Diversified Realty Corporation, Series G	8.000%	BBB-		2,809,392
	32,000	Developers Diversified Realty Corporation, Series H	7.375%	BBB-		449,920
	112,900	Duke Realty Corporation, Series L	6.600%	BBB		1,743,176
	136,700	Duke Realty Corporation, Series N	7.250%	BBB-		2,020,426
	55,651	First Industrial Realty Trust, Inc., Series J	7.250%	BBB-		918,241
	144,229	HRPT Properties Trust, Series B	8.750%	BBB-		2,466,316
	131,111	HRPT Properties Trust, Series C	7.125%	BBB-		2,130,554
	180,908	Kimco Realty Corporation, Series G	7.750%	BBB+		3,692,332
	14,500	Prologis Trust, Series G	6.750%	BBB-		247,950
	115,800	PS Business Parks, Inc., Series L	7.600%	BBB-		2,200,200
	155,600	PS Business Parks, Inc.	7.000%	BB+		2,704,328
	16,500	Public Storage, Inc., Series F	6.450%	BBB		263,010
	14,000	Public Storage, Inc., Series H	6.950%	BBB+		246,260
	77,300	Public Storage, Inc., Series Y	6.850%	BBB+		1,693,357
	114,120	Public Storage, Inc.	6.750%	Baa1		1,971,994
	5,600	Realty Income Corporation	7.375%	BBB-		118,608
	53,800	Realty Income Corporation	6.750%	Baa2		1,008,750
	30,972	Regency Centers Corporation	7.450%	BBB		573,911
	72,909	Regency Centers Corporation	7.250%	BBB-		1,331,318
	7,000	Regency Centers Corporation	6.700%	BBB-		123,550
	59,800	United Dominion Realty Trust	6.750%	Baa3		1,100,320
	38,253	Vornado Realty Trust, Series G	6.625%	BBB-		631,174
	209,967	Wachovia Preferred Funding Corporation	7.250%	A2		1,950,593
	97,600	Weingarten Realty Investors Series F	6.500%	Baa2		1,756,800
	9,100	Weingarten Realty Trust, Series E	6.950%	A-		169,260
		Total Real Estate/Mortgage				34,999,639
		Thrifts & Mortgage Finance – 0.0%
	2,951	Harris Preferred Capital Corporation, Series A	7.375%	A1		49,459
		Wireless Telecommunication Services – 2.0%
	157,500	United States Cellular Corporation	8.750%	Baa2		2,819,250
		Total $25 Par (or similar) Preferred Securities (cost $218,119,119)				144,874,524

Principal
Amount (000)/
Shares			Description (1)	Coupon	Maturity	Ratings (2)	Value
			Capital Preferred Securities – 55.1% (34.0% of Total Investments)
			Capital Markets – 7.7%
	4,300		Dresdner Funding Trust I, 144A	8.151%	6/30/31	A2		$  3,310,549
	8,485		First Union Capital Trust II, Series A	7.950%	11/15/29	A2		5,305,798
	2,340		JPM Chase Capital XXV	6.800%	10/01/37	Aa3		1,798,501
	700		MUFG Capital Finance	4.850%	7/25/56	BBB+		648,374
			Total Capital Markets					11,063,222
			Commercial Banks – 21.8%
	1,500		AB Svensk Exportkredit, 144A	6.375%	10/27/49	AA-		1,498,268
	1,800		Abbey National Capital Trust I	8.963%	6/30/50	A+		1,931,576
	1,900		AgFirst Farm Credit Bank	7.300%	12/15/53	A		1,547,685
	500		Barclays Bank PLC	7.434%	12/15/57	Aa3		407,790
	700		BBVA International Unipersonal	5.919%	4/18/58	Aa3		528,443
	4,250		Credit Agricole SA	6.637%	5/29/49	Aa3		2,869,868
	1,000		First Empire Capital Trust I	8.234%	2/01/27	A3		933,922
	500		First Midwest Bancorp Inc.	6.950%	12/01/33	Baa1		398,747
	3,400		HBOS PLC, Series 144A	6.413%	4/01/49	A1		1,921,932
	1,000		HBOS PLC, Series 144A	6.657%	11/21/57	A1		566,794
	1,000		HT1 Funding, GmbH	6.352%	6/30/57	A-		840,299
	2,500		KBC Bank Fund Trust III, 144A	9.860%	5/02/50	A1		2,499,050
	1,000		Lloyds TSB Bank PLC, Subordinated Note	6.900%	11/22/49	Aa2		673,279
	2,000		Mizuho Financial Group	8.375%	4/27/49	Aa3		1,720,030
	2,000		Northgroup Preferred Capital Corporation, 144A	6.378%	10/15/57	A1		1,215,650
	3,000		PNC Preferred Funding Trust III	8.700%	3/15/58	A-		2,679,288
	1,000		Popular North American Capital Trust I	6.564%	9/15/34	Baa1		545,318
	3,300		Shinsei Finance II Cayman Limited, Perpetual Maturity, 144A	7.160%	7/25/49	Baa2		1,693,312
	1,500		Standard Chartered PLC, 144A	7.014%	1/30/58	BBB+		1,265,070
	2,660		Swedbank ForeningsSparbanken AB, 144A	9.000%	9/17/50	A1		2,608,715
	–	(3)	Union Planters Preferred Fund, 144A	7.750%	7/15/53	A3		2,817,500
			Total Commercial Banks					31,162,536
			Diversified Financial Services – 1.2%
	1,300		Fulton Capital Trust I	6.290%	2/01/36	A3		629,700
	1,800		Old Mutual Capital Funding, Notes	8.000%	6/22/53	Baa2		1,098,000
			Total Diversified Financial Services					1,727,700
			Diversified Telecommunication Services – 3.7%
	5		Centaur Funding Corporation, Series B, 144A	9.080%	4/21/20	BBB		5,276,438
			Insurance – 18.5%
	3,450		Ace Capital Trust II	9.700%	4/01/30	Baa1		3,209,897
	2,300		AXA SA, 144A	6.463%	12/14/49	BBB+		1,315,621
	1,850		Great West Life and Annuity Insurance Company	7.153%	5/16/46	A-		1,490,443
	2,000		Hartford Financial Services Group Inc.	8.125%	6/15/68	AAA		1,706,134
	1,000		Liberty Mutual Group	7.800%	3/15/37	Baa3		605,161
	1,000		MetLife Capital Trust IV	7.875%	12/15/67	BBB+		686,804
	2,000		MetLife Capital Trust X	9.250%	4/08/68	BBB+		1,903,000
	400		Nationwide Financial Services Capital Trust	7.899%	3/01/37	Baa1		251,822
	600		Nationwide Financial Services Inc.	6.750%	5/15/67	Baa1		325,144
	2,400		Oil Insurance Limited, 144A	7.558%	12/30/49	Baa1		1,828,618
	4,500		Progressive Corporation	6.700%	6/15/67	A2		3,672,108
	1,500		Prudential Financial Inc.	8.875%	6/15/68	A-		1,414,006
	500		Prudential PLC	6.500%	6/29/49	A-		215,357
	6,000		QBE Capital Funding Trust II, 144A	6.797%	6/01/49	BBB		4,797,528
	3,000		XL Capital, Limited	6.500%	10/15/57	BBB		1,772,478
	2,000		ZFS Finance USA Trust V	6.500%	5/09/67	BBB+		1,341,962
			Total Insurance					26,536,083
			Real Estate – 0.6%
	3,000		CBG Florida REIT Corporation	7.114%	11/15/49	BB+		816,480
			Road & Rail – 1.6%
	2,785		Burlington Northern Santa Fe Funding Trust I	6.613%	12/15/55	BBB		2,285,995
			Thrifts & Mortgage Finance – 0.0%
	3,257		Washington Mutual Preferred Funding Cayman, Series A-1, 144A	7.250%	3/15/49	C		20,356
	1,516		Washington Mutual Preferred Funding Trust II	6.665%	3/15/57	C		9,475
			Total Thrifts & Mortgage Finance					29,831
			Total Capital Preferred Securities (cost $115,907,774)					78,898,285

Shares		Description (1)	Value
		Investment Companies – 4.8% (2.9% of Total Investments)
	69,176	Blackrock Preferred and Corporate Income Strategies Fund		$     576,928
	184,447	Blackrock Preferred Income Strategies Fund		1,538,288
	35,368	Blackrock Preferred Opportunity Trust		337,764
	230,759	Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc.		1,756,076
	126,534	Flaherty and Crumrine/Claymore Total Return Fund Inc.		975,577
	161,954	John Hancock Preferred Income Fund III		1,655,170
		Total Investment Companies (cost $16,325,948)		6,839,803

Principal
Amount (000)		Description (1)	Coupon	Maturity	Ratings (2)	Value
		U.S. Government and Agency Obligations – 1.0% (0.7% of Total Investments)
$	500	U.S. Treasury Notes	3.625	10/31/09	AAA	$	509,493
	1,000	U.S. Treasury Notes (4)	3.125	11/30/09	AAA		1,014,688
$	1,500	Total U.S. Government and Agency Obligations (cost $1,517,048)					1,524,181
		Total Investments (cost $351,869,889) – 162.1%					232,136,793
		Borrowings Payable – (11.6)% (5)(6)					(16,650,000	)
		Other Assets Less Liabilities – 3.3%					4,683,457
		FundPreferred Shares, at Liquidation Value – (53.8)%(5)					(77,000,000	)
		Net Assets Applicable to Common Shares – 100%					$143,170,250

Interest Rate Swaps outstanding at September 30, 2008:

Fund

Fixed Rate

Unrealized

Notional

Pay/Receive

Floating Rate

Fixed Rate

Payment

Termination

Appreciation

Counterparty

Amount

Floating Rate

Index

(Annualized)

Frequency

Date

(Depreciation)

Citigroup Inc.

$

42,000,000

Receive

1-Month USD-LIBOR

3.815%

Monthly

2/06/10

$

(318,377

)

USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)

(1)	All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted.
(2)	Ratings: Using the higher of Standard & Poor’s Group (“Standard & Poor’s”) or Moody’s Investor Service, Inc. (“Moody’s”) rating. Ratings below BBB by Standard & Poor’s or Baa by Moody’s are considered to be below investment grade.
(3)	Principal Amount (000)/Shares rounds to less than $1,000.
(4)	Portion of Investment has been pledged to collateralize the net payment obligations under interest rate swap contracts.
(5)	Borrowings and FundPreferred Shares, at Liquidation Value as a percentage of Total Investments are 7.2% and 32.2%, respectively.
(6)	The Fund may pledge up to 100% of its eligible securities in the Portfolio of Investments as collateral for Borrowings.
N/R	Not rated.
144A	Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
CORTS	Corporate Backed Trust Securities.
PPLUS	PreferredPlus Trust.
SATURNS	Structured Asset Trust Unit Repackaging.

Fair Value Measurements

During the current fiscal period, the Fund adopted the provisions of Statement of Financial Accounting Standards No. 157 (SFAS No. 157) “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. In determining the value of the Fund’s investments various inputs are used. These inputs are summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3 – Significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

The following is a summary of the Fund’s fair value measurements as of September 30, 2008:

	Level 1		Level 2			Level 3		Total
Investments	$	141,484,332	$	90,652,461		$	—	$	232,136,793
Derivatives*		—		(318,377	)		—		(318,377	)
Total	$	141,484,332	$	90,334,084		$	—	$	231,818,416

* Represents net unrealized appreciation (depreciation).

Income Tax Information

The following information is presented on an income tax basis based on the information currently available to the Fund. Differences between amounts for financial statement and federal income tax purposes are primarily due to recognition of premium amortization, recognition of income on REIT investments, timing differences in the recognition of income and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

At September 30, 2008, the cost of investments was $352,160,698.

Gross unrealized appreciation and gross unrealized depreciation of investments at September 30, 2008, were as follows:

Gross unrealized:
Appreciation	$	15,049
Depreciation		(120,038,954	)
Net unrealized appreciation (depreciation) of investments	$	(120,023,905	)

Item 2. Controls and Procedures.

a.

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

b.

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.

SIGNATURES

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.

(Registrant) Nuveen Quality Preferred Income Fund 3

By (Signature and Title)*	/s/ Kevin J. McCarthy
	Kevin J. McCarthy
	Vice President and Secretary

Date November 28, 2008

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 (Signature and Title)*	/s/ Gifford R. Zimmerman
	Gifford R. Zimmerman
	Chief Administrative Officer (principal executive officer)

Date November 28, 2008

By (Signature and Title)*	/s/ Stephen D. Foy
	Stephen D. Foy
	Vice President and Controller (principal financial officer)

Date November 28, 2008

* Print the name and title of each signing officer under his or her signature.