 Instead of licensing another design, Pfalz instead licensed the previously patented Roland firm's "Wickelrumpf" (wrapped-fuselage) plywood strip-covered semi-monocoque fuselage design and combined it with the new 160 hp Mercedes D.III engine to create the Pfalz D.III.The D.III entered service in August 1917, but was not considered a match for contemporary designs like the Albatros D.V, and instead found a niche role in attacking observation balloons where its high diving speed was a major advantage.About 600 D.IIIs and slightly modified D.IIIas were built between its introduction in August and its replacement a year later.