This is the third paper of a series devoted to a systematic study of Q
CD correlation functions in the framework of an instanton model for th
e QCD vacuum. In this paper we concentrate on the quark-quark (diquark
) and three quark (baryon) channels. We have found that the quark-quar
k interaction resembles the one between quarks and antiquarks. Similar
to the pion and rho channels, the interaction in the scalar isospin I
= 0 and vector I = 1 diquark channels is completely different: the fo
rmer has a much stronger attractive interaction. As a consequence, the
SU(3) octet (nucleon) and decuplet (delta) correlators are also found
to be qualitatively different. Using a complete set of all available
correlation functions, we determine masses and coupling constants for
the nucleon and delta. Our results agree surprisingly well with the fi
rst lattice data on point to point correlators.