SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                        

                                  SCHEDULE 13G
                                 (Rule 13d-102)

             INFORMATION TO BE INCLUDED IN STATEMENTS FILES PURSUANT
           TO RULES 13d-1(b),(c), AND (d) AND AMENDMENTS THERETO FILED
                            PURSUANT TO RULE 13d-2(b)
                              (Amendment No. 3)(1)

                        Alliance Data Systems Corporation
                        ---------------------------------
                                (Name of Issuer)

                          Common Stock, $.01 par value
                          ----------------------------
                         (Title of Class of Securities)

                                   018581 10 8
                                   -----------
                                 (CUSIP Number)

                                December 31, 2005
                                -----------------
              Date of Event Which Requires Filing of this Statement

Check the appropriate box to designate the rule pursuant to which this Schedule
is Filed:

         [ ] Rule 13d-1(b)
         [ ] Rule 13d-1(c)
         [X] Rule 13d-1(d)



--------
         (1)The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page. The information required on
the remainder of this cover page shall not be deemed to be "filed" for the
purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act.



CUSIP No. 018581 10 8                                        Page 2 of 4 Pages



-----------------------------------------------------------------------------
1)   Name of Reporting Person                      Welsh, Carson,
     I.R.S. Identification                         Anderson & Stowe
     No. of Above Person                           VIII,  L.P.
     (Entities Only)
-----------------------------------------------------------------------------
2)   Check the Appropriate Box                     (a) [ X ]
     if a Member of a Group                        (b) [   ]
-----------------------------------------------------------------------------
3)   SEC Use Only
-----------------------------------------------------------------------------
4)   Citizenship or Place                          Delaware
     of Organization
-----------------------------------------------------------------------------
Number of                      5) Sole Voting     12,160,349 shares
Shares Beneficially               Power           of Common Stock
Owned by Each
Reporting Person
With:                          ----------------------------------------------
                               6) Shared Voting
                                  Power                  -0-
                               ----------------------------------------------
                               7) Sole Disposi- 12,160,349 shares of
                                  tive Power    Common Stock

                               ----------------------------------------------
                               8) Shared Dis-
                                  positive Power         -0-
                               ----------------------------------------------
9)   Aggregate Amount Beneficially              12,160,349 shares of 
     Owned by Each Reporting Person             Common Stock
-----------------------------------------------------------------------------
10)  Check if the Aggregate
     Amount in Row (9)
     Excludes Certain Shares
-----------------------------------------------------------------------------
11)  Percent of Class
     Represented by                             14.4%
     Amount in Row (9)
-----------------------------------------------------------------------------
12)  Type of Reporting
     Person                                     PN





CUSIP No. 018581 10 8                                        Page 3 of 4 Pages


                         Amendment No. 3 to Schedule 13G
                         -------------------------------

     Reference is hereby made to the statement on Schedule 13G filed with the
Securities and Exchange Commission on January 22, 2003, Amendment No. 1 thereto
filed on January 21, 2004 and Amendment No. 2 thereto filed on January 13, 2005
(as so amended, the "Schedule 13G"). Terms defined in the Schedule 13G are used
herein as so defined.

     The following Items of the Schedule 13G are hereby amended and restated to
read in their entirety as follows:

Item 4 -          Ownership.

                  (a) Amount Beneficially Owned:

                  WCAS VIII: 12,160,349 shares of Common Stock

                  (b) Percent of Class:

                  WCAS VIII: 14.4%

                  (c) Number of shares as to which such person has:

                  (i) sole power to vote or to direct the vote:

                  WCAS VIII: 12,160,349 shares of Common Stock

                  (ii) shared power to vote or to direct the vote: -0-

                  (iii) sole power to dispose or to direct the disposition of: 

                  WCAS VIII: 12,160,349 shares of Common Stock

                  (iv) shared power to dispose or to direct the 
                  disposition of: -0-

     In addition, WCAS Management Corporation, a Delaware corporation controlled
by certain of the same individuals who control WCAS VIII, owns 349 shares of
Common Stock, or less than 0.1% of the Common Stock outstanding.






CUSIP No. 018581 10 8                                        Page 4 of 4 Pages

Signature:

     After reasonable inquiry and to the best of their knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.


                        WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
                        By:  WCAS VIII Associates, L.L.C., General Partner

                        By /s/ Jonathan M. Rather
                           ----------------------
                             Managing Member


Date: January 18, 2006