FORM 10-K405

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

               Annual Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

For the fiscal year ended December 31, 1997

Commission File Number 0-10442

                        DYCO OIL AND GAS PROGRAM 1981-1
                            (A LIMITED PARTNERSHIP)
            (Exact name of registrant as specified in its charter)

           Minnesota                               41-1411953
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)               Identification Number)

         Samson Plaza
   Two West Second Street
        Tulsa, Oklahoma                      74103
     (Address of principal                 (Zip Code)
      executive offices)

Registrant's telephone number, including area code: (918) 583-1791

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:
      Units of limited partnership interest

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such  reports),  and (2) has been subject to the
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item  405  of  Regulation  S-K  is  not  contained  herein,  and  will  not be
contained,  to the best of  registrant's  knowledge,  in  definitive  proxy or
information  statements  incorporated  by  reference  in Part III of this Form
10-K405 or any amendment to this Form 10-K405.  [X]

      The units of  limited  partnership  are not  publicly  traded,  therefore,
registrant cannot compute the aggregate market value of the voting units held by
non-affiliates of the registrant.

      DOCUMENTS INCORPORATED BY REFERENCE:  None.



                                       1
<PAGE>




                                 FORM 10-K405

                        DYCO OIL AND GAS PROGRAM 1981-1
                       (a Minnesota limited partnership)

                               TABLE OF CONTENTS


PART I.......................................................................3

      ITEM 1.     BUSINESS...................................................3
      ITEM 2.     PROPERTIES.................................................7
      ITEM 3.     LEGAL PROCEEDINGS.........................................10
      ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS.......11

PART II.....................................................................11

      ITEM 5.     MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP UNITS
                  AND RELATED LIMITED PARTNER MATTERS.......................11
      ITEM 6.     SELECTED FINANCIAL DATA...................................13
      ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.......................14
      ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............19
      ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.......................31

PART III....................................................................31

      ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........31
      ITEM 11.    EXECUTIVE COMPENSATION....................................32
      ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT................................................36
      ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............36

PART IV.....................................................................38

      ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                  ON FORM 8-K...............................................38
SIGNATURES..................................................................40




                                       2
<PAGE>




PART I

ITEM 1.  BUSINESS

      General

      The Dyco Oil and Gas Program 1981-1 Limited Partnership (the "Program") is
a Minnesota  limited  partnership  engaged in the production of oil and gas. The
Program  commenced  operations  on February  7, 1981 with the primary  financial
objective of investing its limited  partners'  subscriptions  in the drilling of
oil  and gas  prospects  and  then  distributing  to its  limited  partners  all
available  cash flow from the Program's  on-going  production  operations.  Dyco
Petroleum Corporation ("Dyco") serves as the General Partner of the Program. See
"Item 2. Properties" for a description of the Program's reserves and properties.

      The  limited   partnership   agreement   for  the  Program  (the  "Program
Agreement")  provides  that limited  partners are  allocated  99% of all Program
costs and revenues and Dyco, as General Partner,  is allocated 1% of all Program
costs and  revenues.  Included in such costs is the Program's  reimbursement  to
Dyco of the Program's proportionate share of Dyco's geological, engineering, and
general and administrative expenses.

      Dyco  currently  serves as General  Partner  of 32  limited  partnerships,
including the Program.  Dyco is a wholly-owned  subsidiary of Samson  Investment
Company.  Samson  Investment  Company  and its various  corporate  subsidiaries,
including Dyco, (collectively,  the "Samson Companies") are primarily engaged in
the production and  development of and  exploration for oil and gas reserves and
the acquisition and operation of producing properties. At December 31, 1997, the
Samson  Companies  owned  interests  in  approximately  13,000 oil and gas wells
located  in 19  states  of the  United  States  and  the  countries  of  Canada,
Venezuela,  and Russia.  At December 31,  1997,  the Samson  Companies  operated
approximately  2,500 oil and gas wells located in 15 states of the United States
as well as Canada, Venezuela, and Russia.

      As a limited  partnership,  the Program  has no  officers,  directors,  or
employees.  It relies  instead  on the  personnel  of Dyco and the other  Samson
Companies.  As of March 1, 1998, the Samson Companies employed approximately 820
persons.  No employees  are covered by  collective  bargaining  agreements,  and
management believes that the Samson Companies provide a sound employee relations
environment. For information regarding the executive officers of Dyco, see "Item
10. Directors and Executive Officers of the Registrant."

      Dyco's  and the  Program's  principal  place of  business  is located at
Samson Plaza, Two West Second Street, Tulsa, Oklahoma


                                       3
<PAGE>



74103, and their telephone number is (918) 583-1791 or (800) 283-1791.


      Funding

      Although the Program  Agreement  permits the Program to incur  borrowings,
the Program's  operations and expenses are currently funded out of the Program's
revenues from oil and gas sales. Dyco may, but is not required to, advance funds
to  the  Program  for  the  same  purposes  for  which  Program  borrowings  are
authorized.


      Principal Products Produced and Services Rendered

      The Program's sole business is the  development  and production of oil and
gas with a  concentration  on gas.  The  Program  does  not  hold  any  patents,
trademarks,  licenses,  or  concessions  and is not a  party  to any  government
contracts.  The  Program  has no backlog of orders and does not  participate  in
research and development  activities.  The Program is not presently encountering
shortages of oilfield tubular goods, compressors,  production material, or other
equipment.


      Oil, Gas, and Environmental Control Regulations

      Regulation  of Production  Operations -- The  production of oil and gas is
subject to  extensive  federal and state laws and  regulations  governing a wide
variety of matters, including the drilling and spacing of wells, allowable rates
of  production,  prevention  of  waste  and  pollution,  and  protection  of the
environment.  In  addition  to the direct  costs  borne in  complying  with such
regulations,  operations and revenues may be impacted to the extent that certain
regulations limit oil and gas production to below economic levels.

      Regulation  of Sales and  Transportation  of Oil and Gas -- Sales of crude
oil and  condensate are made by the Program at market prices and are not subject
to price controls. The sale of gas may be subject to both federal and state laws
and  regulations.  The provisions of these laws and  regulations are complex and
affect all who  produce,  resell,  transport,  or purchase  gas,  including  the
Program.  Although  virtually all of the Program's gas production is not subject
to  price  regulation,   other  regulations   affect  the  availability  of  gas
transportation services and the ability of gas consumers to continue to purchase
or use gas at current levels. Accordingly,  such regulations may have a material
effect  on the  Program's  operations  and  projections  of  future  oil and gas
production and revenues.

      Future  Legislation --  Legislation  affecting the oil and gas industry is
under constant review for amendment or expansion.


                                       4
<PAGE>



Because  such laws and  regulations  are  frequently  amended or  reinterpreted,
management  is unable to  predict  what  additional  energy  legislation  may be
proposed or enacted or the future cost and impact of complying  with existing or
future regulations.

      Regulation of the  Environment -- The Program's  operations are subject to
numerous laws and  regulations  governing  the  discharge of materials  into the
environment or otherwise relating to environmental  protection.  Compliance with
such  laws  and  regulations,   together  with  any  penalties   resulting  from
noncompliance,  may increase the cost of the Program's  operations or may affect
the  Program's  ability  to  timely  complete  existing  or  future  activities.
Management  anticipates  that various local,  state,  and federal  environmental
control agencies will have an increasing impact on oil and gas operations.


      Significant Customers

      Purchases of gas by El Paso Energy Marketing Company ("El Paso") accounted
for approximately 91.3% of the Program's oil and gas sales during the year ended
December 31, 1997. In the event of interruption of purchases by this significant
customer or the  cessation or material  change in  availability  of  open-access
transportation by the Program's pipeline transporters, the Program may encounter
difficulty  in  marketing  its gas and in  maintaining  historic  sales  levels.
Alternative purchasers or transporters may not be readily available.

      The Program's  principal  customers for crude oil  production are refiners
and other companies which have pipeline facilities near the producing properties
of the Program. In the event pipeline facilities are not conveniently  available
to  production  areas,  crude oil is usually  trucked by  purchasers  to storage
facilities.


      Competition and Marketing

      The  domestic  oil and gas  industry is highly  competitive,  with a large
number of companies and  individuals  engaged in the exploration and development
of oil and gas properties.  The ability of the Program to produce and market oil
and gas profitably depends on a number of factors that are beyond the control of
the Program.  These factors include worldwide political instability  (especially
in oil-producing regions), United Nations export embargoes, the supply and price
of foreign  imports of oil and gas, the level of consumer  product demand (which
can be heavily  influenced  by weather  patterns),  government  regulations  and
taxes,  the price and  availability of alternative  fuels,  the overall economic
environment,  and the availability and capacity of transportation and processing
facilities. The effect of these


                                       5
<PAGE>



factors on future oil and gas industry  trends cannot be accurately  predicted
or anticipated.

      The most important variable affecting the Program's revenues is the prices
received  for  the  sale  of oil  and  gas.  Predicting  future  prices  is very
difficult.  Concerning  past trends,  average yearly  wellhead gas prices in the
United States have been volatile for a number of years.  For the past ten years,
such  average  prices have  generally  been in the $1.40 to $2.40 per Mcf range,
significantly  below prices  received in the early 1980s.  Average gas prices in
the latter part of 1996 and parts of 1997,  however,  were somewhat  higher than
those yearly  averages.  Gas prices are  currently in the middle  portion of the
10-year average price range described above.

      Substantially  all of the  Program's  gas  reserves  are being sold on the
"spot  market."  Prices on the spot  market  are  subject to wide  seasonal  and
regional pricing  fluctuations due to the highly  competitive nature of the spot
market. In addition,  such spot market sales are generally  short-term in nature
and are dependent  upon the  obtaining of  transportation  services  provided by
pipelines.  Spot prices for the Program's gas decreased from approximately $3.57
per Mcf at December  31,  1996 to  approximately  $2.32 per Mcf at December  31,
1997.  Such prices  were on an MMBTU  basis and differ from the prices  actually
received  by  the  Program  due  to  transportation  and  marketing  costs,  BTU
adjustments, and regional price and quality differences.

      For the past ten years,  average  oil prices  have  generally  been in the
$16.00 to $24.00 per barrel range.  Due to global  consumption and supply trends
over the last several  months,  as well as expectations of at least a short-term
slowdown in Asian energy  demand,  oil prices have  recently  been in the mid to
lower  portions of this  pricing  range,  and in early 1998 dropped to as low as
$12.00 per barrel. It is not known whether this trend will continue.  Prices for
the Program's oil decreased from approximately $23.75 per barrel at December 31,
1996 to approximately $16.25 per barrel at December 31, 1997.

      Future prices for both oil and gas will likely be different  from (and may
be lower  than) the prices in effect on  December  31,  1997.  Primarily  due to
heating  season  demand,  year-end  prices in many past years have  tended to be
higher, and in some cases  significantly  higher,  than the yearly average price
actually received by the Program for at least the following year.  Management is
unable to predict  whether  future oil and gas prices will (i)  stabilize,  (ii)
increase, or (iii) decrease.


      Insurance Coverage

      The Program is subject to all of the risks  inherent in the  exploration
for and production of oil and gas, including blowouts,


                                       6
<PAGE>



pollution, fires, and other casualties. The Program maintains insurance coverage
as is customary for entities of a similar size engaged in operations  similar to
that of the Program,  but losses can occur from uninsurable  risks or in amounts
in excess of existing insurance  coverage.  The occurrence of an event not fully
covered  by  insurance  could have a material  adverse  effect on the  Program's
financial position and results of operations.


ITEM 2.  PROPERTIES

      Well Statistics

      The  following  table sets forth the  numbers of gross and net  productive
wells of the Program as of December 31, 1997.

                              Well Statistics(1)
                            As of December 31, 1997

                 Gross productive wells(2):
                    Oil                                    -
                    Gas                                   14
                                                          --
                      Total                               14

                 Net productive wells(3):
                    Oil                                    -
                    Gas                                  .81
                                                        ----
                      Total                              .81

----------
(1)   The designation of a well as an oil well or gas well is made by Dyco based
      on the relative amount of oil and gas reserves for the well. Regardless of
      a well's oil or gas designation,  it may produce oil, gas, or both oil and
      gas.
(2)   As used throughout this Annual Report on Form 10-K405  ("Annual  Report"),
      "Gross  Well" refers to a well in which a working  interest is owned.  The
      number  of gross  wells is the  total  number  of wells in which a working
      interest is owned.
(3)   As used throughout this Annual Report, "Net Well" refers to the sum of the
      fractional  working  interests  owned in gross wells.  For example,  a 15%
      working interest in a well represents one Gross Well, but 0.15 Net Well.


      Drilling Activities

      The  Program  participated  in no drilling  activities  for the year ended
December 31, 1997.





                                       7
<PAGE>



      Oil and Gas Production, Revenue, and Price History

      The following table sets forth certain historical  information  concerning
the oil  (including  condensates)  and  gas  production,  net of all  royalties,
overriding royalties, and other third party interests, of the Program,  revenues
attributable to such production, and certain price and cost information.

                              Net Production Data

                                                 Year Ended December 31,
                                             --------------------------------
                                               1997        1996        1995
                                             --------    --------    --------

Production:
   Oil (Bbls)(1)                                  169         225         651
   Gas (Mcf)(2)                                64,261     113,975     173,930

Oil and gas sales:
   Oil                                       $  3,367    $  4,306    $ 10,124
   Gas                                        163,297     244,901     230,127
                                              -------     -------     -------
     Total                                   $166,664    $249,207    $240,251
                                              =======     =======     =======
Total direct operating expenses(3)           $ 86,425    $121,755    $118,744
                                              =======     =======     =======
Direct operating expenses as a
   percentage of oil and gas sales              51.9%       48.9%       49.4%

Average sales price:
   Per barrel of oil                           $19.92      $19.14      $15.55
   Per Mcf of gas                                2.54        2.15        1.32

Direct operating expenses per
   equivalent Mcf of gas(4)                    $ 1.32      $ 1.06      $  .67

----------

(1)   As used throughout this Annual Report, "Bbls" refers to barrels of 42 U.S.
      gallons and  represents  the basic unit for  measuring  the  production of
      crude oil and condensate oil.
(2)   As used  throughout  this Annual  Report,  "Mcf" refers to volume of 1,000
      cubic feet under  prescribed  conditions of pressure and  temperature  and
      represents the basic unit for measuring the production of gas.
(3)   Includes lease operating  expenses and production  taxes. 
(4)   Oil production  is  converted to  gas  equivalents  at the rate of six Mcf
      per barrel,  representing the estimated relative energy content of gas and
      oil, which rate is not necessarily  indicative of the  relationship of oil
      and gas  prices.  The  respective  prices of oil and gas are  affected  by
      market and other factors in addition to relative energy content.



                                       8
<PAGE>





      Proved Reserves and Net Present Value

      The following table sets forth the Program's  estimated proved oil and gas
reserves and net present value  therefrom as of December 31, 1997.  The schedule
of  quantities of proved oil and gas reserves was prepared by Dyco in accordance
with the rules prescribed by the Securities and Exchange Commission (the "SEC").
As used  throughout  this  Annual  Report,  "proved  reserves"  refers  to those
estimated  quantities of crude oil, gas, and gas liquids  which  geological  and
engineering  data  demonstrate  with  reasonable  certainty to be recoverable in
future  years from known oil and gas  reservoirs  under  existing  economic  and
operating conditions.

      Net present  value  represents  estimated  future gross cash flow from the
production and sale of proved reserves,  net of estimated oil and gas production
costs (including  production  taxes, ad valorem taxes, and operating  expenses),
and estimated future development costs, discounted at 10% per annum. Net present
value  attributable to the Program's proved reserves was calculated on the basis
of current costs and prices at December 31, 1997. Such prices were not escalated
except in  certain  circumstances  where  escalations  were  fixed  and  readily
determinable in accordance with applicable contract provisions.  The prices used
by Dyco in  calculating  the net present  value  attributable  to the  Program's
proved  reserves  do not  necessarily  reflect  market  prices  for  oil and gas
production  subsequent to December 31, 1997. Year-end prices have generally been
higher than prices during the rest of the year.  There can be no assurance  that
the prices used in  calculating  the net present value of the  Program's  proved
reserves at December 31, 1997 will actually be realized for such production.

      The process of  estimating  oil and gas  reserves  is  complex,  requiring
significant  subjective  decisions in the  evaluation  of available  geological,
engineering,  and  economic  data  for  each  reservoir.  The  data  for a given
reservoir may change substantially over time as a result of, among other things,
additional development activity, production history, and viability of production
under varying economic conditions;  consequently, it is reasonably possible that
material  revisions to existing reserve  estimates may occur in the near future.
Although  every  reasonable  effort has been made to ensure  that these  reserve
estimates represent the most accurate assessment  possible,  the significance of
the  subjective  decisions  required and variances in available data for various
reservoirs  make these  estimates  generally  less precise than other  estimates
presented in connection with financial statement disclosures.






                                       9
<PAGE>



                              Proved Reserves and
                               Net Present Value
                             From Proved Reserves
                            As of December 31, 1997

Estimated proved reserves:
   Gas (Mcf)                                                          289,130
   Oil and liquids (Bbls)                                               3,369

Net present value (discounted at 10% per annum)                      $259,973

      No estimates  of the proved  reserves of the Program  comparable  to those
included  herein have been included in reports to any federal  agency other than
the SEC.  Additional  information  relating to the Program's  proved reserves is
contained in Note 4 to the Program's financial statements, included in Item 8 of
this Annual Report.


      Significant Properties

      As of December  31, 1997 the  Program's  properties  consisted of 14 gross
(.81 net) productive wells. The Program also owned a non-working  interest in an
additional  16 wells.  Affiliates  of the Program  operate 10 (33%) of its total
wells.  As of December 31, 1997, the Program had estimated total proved reserves
of 289,130 Mcf of gas and 3,369 barrels of oil, with a present value (discounted
at 10% per  annum) of  estimated  future net cash flow of  $259,973.  All of the
Program's reserves are located in the Anadarko Basin of western Oklahoma and the
Texas panhandle, which is an established oil and gas producing basin.


      Title to Oil and Gas Properties

      Management believes that the Program has satisfactory title to its oil and
gas properties. Record title to substantially all of the Program's properties is
held by Dyco as nominee.

      Title  to the  Program's  properties  is  subject  to  customary  royalty,
overriding  royalty,   carried,   working,   and  other  similar  interests  and
contractual  arrangements  customary in the oil and gas  industry,  to liens for
current taxes not yet due, and to other  encumbrances.  Management believes that
such burdens do not materially detract from the value of such properties or from
the Program's  interest  therein or materially  interfere  with their use in the
operation of the Program's business.


ITEM 3.  LEGAL PROCEEDINGS

      To the  knowledge of the  management  of Dyco and the  Program,  neither
Dyco, the Program, nor the Program's properties are


                                       10
<PAGE>



subject to any litigation,  the results of which would have a material effect on
the Program's or Dyco's financial condition or operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS

      There were no matters  submitted to a vote of the limited  partners during
1997.


PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED  
         LIMITED PARTNER MATTERS

      The Program does not have an  established  trading market for its units of
limited  partnership  interest  ("Units").  Pursuant to the terms of the Program
Agreement, Dyco, as general partner, is obligated to annually issue a repurchase
offer which is based on the  estimated  future net revenues  from the  Program's
reserves and is calculated pursuant to the terms of the Program Agreement.  Such
repurchase offer is recalculated  monthly in order to reflect cash distributions
made to the limited partners and extraordinary  events. The following table sets
forth,  for the  periods  indicated,  Dyco's  repurchase  offer per Unit and the
amount of the Program's  cash  distributions  per Unit for the same period.  For
purposes of this Annual Report,  a Unit  represents an initial  subscription  of
$5,000 to the Program.

                                    Repurchase         Cash
                                       Price       Distributions
            1996:                   ----------     -------------
               First Quarter           $44              $ -
               Second Quarter           44                -
               Third Quarter            47                -
               Fourth Quarter           47                -

            1997:
               First Quarter           $22              $25(1)
               Second Quarter           22                -
               Third Quarter            50                -
               Fourth Quarter           50                -

            1998:
               First Quarter           $50              $ -

------------
(1)   Cash  distribution  includes  proceeds  from  the  sale  of  oil  and  gas
      properties.





                                       11
<PAGE>



      The Program has 7,070 units  outstanding and  approximately  2,279 limited
partners of record.



                                       12
<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

                             Selected Financial Data

     The following table presents selected financial data for the Program.  This
data should be read in conjunction with the financial statements of the Program,
and the respective notes thereto,  included elsewhere in this Annual Report. See
"Item 8. Financial Statements and Supplementary Data."

<TABLE>
<CAPTION>

                                                                      December 31,
                                             --------------------------------------------------------------
                                               1997            1996        1995          1994        1993
                                             ----------     ---------   ---------     ---------    --------
<S>                                          <C>            <C>         <C>           <C>          <C>     
Summary of Operations:
   Oil and gas sales                          $166,664      $249,207    $240,251      $314,712     $474,446
   Total revenues                              171,476       256,349     245,137       317,965      477,174

   Lease operating expenses                     75,972       101,809     101,650       102,115       66,473
   Production taxes                             10,453        19,946      17,094        23,163       37,398
   General and administrative
     expenses                                   74,456        69,892      70,951        63,320       64,161
   Depreciation, depletion, and
     amortization of oil and gas
     properties                                 20,411        21,854      43,661        53,459       69,525

   Net income (loss)                         (   9,816)       42,848      11,781        75,908      239,617
     per Unit                                (    1.39)         6.06        1.67         10.74        33.89
   Cash distributions                          176,750          -           -          176,750      353,500
     per Unit                                       25          -           -               25           50

Summary Balance Sheet Data:
   Total assets                                221,590       438,562     334,860       323,809      346,121
   Partners' capital                            85,772       272,338     229,490       217,709      318,551
</TABLE>



                                       13
<PAGE>



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

      Use of Forward-Looking Statements and Estimates

      This Annual Report contains certain forward-looking  statements. The words
"anticipate,"  "believe,"  "expect,"  "plan," "intend,"  "estimate,"  "project,"
"could," "may," and similar expressions are intended to identify forward-looking
statements.  Such statements reflect  management's current views with respect to
future  events and  financial  performance.  This Annual  Report  also  includes
certain information which is, or is based upon, estimates and assumptions.  Such
estimates and assumptions  are  management's  efforts to accurately  reflect the
condition and operation of the Program.

      Use of  forward-looking  statements and estimates and assumptions  involve
risks and uncertainties which include, but are not limited to, the volatility of
oil and gas prices, the uncertainty of reserve  information,  the operating risk
associated with oil and gas properties  (including the risk of personal  injury,
death, property damage, damage to the well or producing reservoir, environmental
contamination,  and other  operating  risks),  the  prospect of changing tax and
regulatory laws, the availability and capacity of processing and  transportation
facilities,  the  general  economic  climate,  the  supply  and price of foreign
imports of oil and gas, the level of consumer product demand,  and the price and
availability  of  alternative  fuels.  Should  one or more  of  these  risks  or
uncertainties  occur  or  should  estimates  or  underlying   assumptions  prove
incorrect,  actual  conditions or results may vary materially and adversely from
those stated, anticipated, believed, estimated, or otherwise indicated.


      General Discussion

      The following  general  discussion  should be read in conjunction with the
analysis of results of operations  provided below.  The most important  variable
affecting the Program's  revenues is the prices received for the sale of oil and
gas. Predicting future prices is very difficult. Concerning past trends, average
yearly  wellhead gas prices in the United States have been volatile for a number
of years. For the past ten years, such average prices have generally been in the
$1.40 to $2.40 per Mcf range,  significantly  below prices received in the early
1980s.  Average gas prices in the latter part of 1996 and parts of 1997 however,
were somewhat higher than those yearly averages. Gas prices are currently in the
middle portion of the 10-year average price range described above.

      Substantially  all of the  Program's  gas  reserves  are being sold on the
"spot  market."  Prices on the spot  market  are  subject to wide  seasonal  and
regional pricing fluctuations due to the


                                       14
<PAGE>



highly  competitive  nature of the spot market.  In  addition,  such spot market
sales are generally short-term in nature and are dependent upon the obtaining of
transportation services provided by pipelines. Spot prices for the Program's gas
decreased from approximately $3.57 per Mcf at December 31, 1996 to approximately
$2.32 per Mcf at  December  31,  1997.  Such  prices  were on an MMBTU basis and
differ from the prices  actually  received by the Program due to  transportation
and  marketing  costs,   BTU   adjustments,   and  regional  price  and  quality
differences.

      For the past ten years,  average  oil prices  have  generally  been in the
$16.00 to $24.00 per barrel range.  Due to global  consumption and supply trends
over the last several  months as well as  expectations  of at least a short-term
slowdown in Asian energy  demand,  oil prices have  recently  been in the mid to
lower  portions of this  pricing  range,  and in early 1998 dropped to as low as
$12.00 per barrel. It is not known whether this trend will continue.  Prices for
the Program's oil decreased from approximately $23.75 per barrel at December 31,
1996 to approximately $16.25 per barrel at December 31, 1997.

      Future prices for both oil and gas will likely be different  from (and may
be lower  than) the prices in effect on  December  31,  1997.  Primarily  due to
heating  season  demand,  year-end  prices in many past years have  tended to be
higher, and in some cases  significantly  higher,  than the yearly average price
actually received by the Program for at least the following year.  Management is
unable to predict  whether  future oil and gas prices will (i)  stabilize,  (ii)
increase, or (iii) decrease.


      Results of Operations

                   Year Ended December 31, 1997 Compared to
                         Year Ended December 31, 1996
                   ----------------------------------------

      Total oil and gas sales  decreased  $82,543 (33.1%) in 1997 as compared to
1996. Of this decrease,  approximately $1,000 and $107,000,  respectively,  were
related  to  decreases  in  volumes  of oil and gas  sold,  which  amounts  were
partially offset by an increase of approximately  $25,000 related to an increase
in the  average  price of gas sold.  Volumes  of oil and gas sold  decreased  56
barrels and 49,714 Mcf, respectively,  in 1997 as compared to 1996. The decrease
in volumes of gas sold  resulted  primarily  from (i) a negative  gas  balancing
adjustment on one well in 1997, (ii) normal declines in production,  and (iii) a
negative prior period volume adjustment on one well in 1997. Such decreases were
partially  offset by a  positive  prior  period  volume  adjustment  made by the
purchaser  on one well in 1997.  Average oil and gas prices  increased to $19.92
per barrel and $2.54 per Mcf,  respectively,  in 1997 from $19.14 per barrel and
$2.15 per Mcf, respectively, in 1996.



                                       15
<PAGE>




      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  decreased  $35,330 (29.0%) in 1997 as compared to 1996. This
decrease resulted primarily from (i) the decrease in volumes of oil and gas sold
in 1997 and (ii)  workover  expenses  incurred  on two wells in 1996 in order to
improve the  recovery of reserves.  As a  percentage  of oil and gas sales these
expenses increased to 51.9% in 1997 from 48.9% in 1996. This percentage increase
was primarily due to the decrease in oil and gas sales discussed above.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $1,443  (6.6%) in 1997 as compared  to 1996.  This  decrease  was due
primarily to the decrease in volumes of oil and gas sold in 1997.  Such decrease
was partially offset by increases in depreciation,  depletion,  and amortization
caused by a downward  revision in  reserves  due to the sale of one well in 1997
and a  decrease  in oil and gas  prices  used to value  reserves  in 1997.  As a
percentage  of oil and gas sales,  this expense  increased to 12.2% in 1997 from
8.8% in 1996. This percentage  increase was primarily due to the decrease in oil
and gas sales discussed above.

      General and  administrative  expenses  increased  $4,564 (6.5%) in 1997 as
compared to 1996. As a percentage of oil and gas sales, these expenses increased
to 44.7% from 28.0% in 1997 as compared to 1996.  This  percentage  increase was
primarily due to the decrease in oil and gas sales discussed above.


                     Year Ended December 31, 1996 Compared
                        to Year Ended December 31, 1995
                     -------------------------------------

      Total oil and gas sales  increased  $8,956  (3.7%) for 1996 as compared to
1995. Of this increase,  approximately $2,000 and $144,000,  respectively,  were
related to increases in the average prices of oil and gas sold, partially offset
by decreases of  approximately  $8,000 and  $129,000,  respectively,  related to
decreases in volumes of oil and gas sold.  Volumes of oil and gas sold decreased
426  barrels  and 59,955 Mcf,  respectively,  for 1996 as compared to 1995.  The
decrease in volumes of oil sold resulted  primarily from  diminished  production
from one well which was shut-in during 1996 due to mechanical difficulties.  The
decrease in volumes of gas sold resulted  primarily from (i) the  curtailment of
gas sales from one well during 1996 due to the Program's  overproduced  position
in the well,  (ii) the shutting-in of two wells during 1996 in order to increase
production capabilities,  and (iii) the normal decline in production on one well
due to diminished gas reserves.  Average oil and gas prices  increased to $19.14
per barrel and $2.15 per Mcf, respectively,  for 1996 from $15.55 per barrel and
$1.32 per Mcf, respectively, for 1995.




                                       16
<PAGE>



      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  increased  $3,011 (2.5%) for 1996 as compared to 1995.  This
increase  resulted  primarily from workover expenses incurred on one well during
1996 in order to improve the recovery of reserves,  partially  offset by (i) the
reversal of a $20,000  accrual  during 1996 due to the  conclusion  of a certain
legal  contingency  in favor of the Program,  (ii) the  shutting-in  of one well
during 1996 due to mechanical difficulties, and (iii) workover expenses incurred
on one well  during  1995 in order to improve the  recovery  of  reserves.  As a
percentage of oil and gas sales, these expenses remained  relatively constant at
48.9% for 1996 as compared to 49.4% for 1995.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $21,807 (49.9%) for 1996 as compared to 1995. This decrease  resulted
primarily  from the  decreases  in  volumes of oil and gas sold  during  1996 as
compared to 1995. As a percentage of oil and gas sales,  this expense  decreased
to 8.8% for 1996 from 18.2% for 1995. This percentage decrease was primarily due
to the increases in the average prices of oil and gas sold during 1996.

      General and administrative  expenses remained relatively constant for 1996
as  compared  to 1995.  As a  percentage  of oil and gas sales,  these  expenses
decreased to 28.0% for 1996 from 29.5% for 1995.  This  percentage  decrease was
primarily due to the increases in the average  prices of oil and gas sold during
1996.


      Liquidity and Capital Resources

      Net  proceeds  from  operations  less  necessary   operating  capital  are
distributed to the limited  partners on a quarterly  basis.  See "Item 5. Market
for the  Registrant's  Limited  Partnership  Units and Related  Limited  Partner
Matters."  The net proceeds  from  production  are not  reinvested in productive
assets, except to the extent that producing wells are improved, or where methods
are employed to permit more efficient recovery of reserves, thereby resulting in
a positive economic impact.  Assuming  production levels for 1997, the Program's
proved  reserve  quantities at December 31, 1997 would have a remaining  life of
approximately 4.5 years for gas reserves. Assuming average production levels for
the three  years ended  December  31,  1997,  the  Program's  proved oil reserve
quantities at December 31, 1997 would have a remaining life of approximately 9.7
years.  However,  since the Program's reserve estimates are based on oil and gas
prices at December 31, 1997, it is possible  that a significant  decrease in oil
and gas prices from December 31, 1997 levels will reduce such reserves and their
corresponding life-span.

      The Program's  available capital from the limited partners'  subscriptions
has been spent on oil and gas drilling activities and there should be no further
material capital resource commitments in the future.  Occasional expenditures by
the


                                       17
<PAGE>



Program for well completions or workovers, however, may reduce or eliminate cash
available for a particular quarterly cash distribution.  The Program has no debt
commitments.  Cash for operational  purposes will be provided by current oil and
gas production.

      There can be no  assurance as to the amount of the  Program's  future cash
distributions.   The  Program's  ability  to  make  cash  distributions  depends
primarily  upon the level of  available  cash flow  generated  by the  Program's
operating  activities,  which will be affected (either positively or negatively)
by many factors  beyond the control of the Program,  including  the price of and
demand for oil and gas and other market and economic conditions.  Even if prices
and costs remain  stable,  the amount of cash available for  distributions  will
decline  over  time (as the  volume  of  production  from  producing  properties
declines) since the Program is not replacing  production through acquisitions of
producing properties and drilling.


      Inflation and Changing Prices

      Prices obtained for oil and gas production  depend upon numerous  factors,
including the extent of domestic and foreign production, foreign imports of oil,
market  demand,  domestic  and  foreign  economic  conditions  in  general,  and
governmental  regulations  and tax laws.  The general  level of inflation in the
economy did not have a material effect on the operations of the Program in 1997.
Oil and gas prices have  fluctuated  during recent years and generally  have not
followed the same pattern as  inflation.  See "Item 2.  Properties - Oil and Gas
Production, Revenue, and Price History."


      Year 2000 Computer Issues

      Dyco has reviewed its  computer  systems and hardware to locate  potential
operational  problems  associated  with the year 2000. Such review will continue
until all potential  problems are located and  resolved.  Dyco believes that all
year-2000  problems  in its  computer  system have been or will be resolved in a
timely  manner and have not caused and will not cause either (i)  disruption  of
the Program's  operations or (ii) a material  effect on the Program's  financial
condition or results of operations.  However,  it is possible that the Program's
cash flows could be disrupted by year-2000 problems  experienced by operators of
the Program's wells, buyers of the Program's oil and gas, financial institutions
or other persons.  Dyco is unable to quantify the effect, if any, on the Program
of year-2000 computer problems which may be experienced by these third parties.



                                       18
<PAGE>



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



                       REPORT OF INDEPENDENT ACCOUNTANTS



TO THE PARTNERS

DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP


      We have audited the  financial  statements of the Dyco Oil and Gas Program
1981-1 Limited  Partnership (a Minnesota limited  partnership) as listed in Item
14(a) of this Annual Report.  These financial  statements are the responsibility
of the  Program's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audits.

      We conducted our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Dyco Oil and Gas Program
1981-1 Limited Partnership at December 31, 1997 and 1996, and the results of its
operations  and cash  flows  for each of the  three  years in the  period  ended
December 31, 1997, in conformity with generally accepted accounting principles.




                                    /s/ Coopers & Lybrand L.L.P.

                                    COOPERS & LYBRAND L.L.P.

Tulsa, Oklahoma
March 11, 1998



                                       19
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1981-1 LIMITED PARTNERSHIP
                                Balance Sheets
                          December 31, 1997 and 1996

                                    ASSETS
                                    ------
                                                           1997        1996
                                                         --------    --------
CURRENT ASSETS:
   Cash and cash equivalents                             $118,975    $197,842
   Accrued oil and gas sales                               27,837      55,764
                                                          -------     -------
     Total current assets                                $146,812    $253,606

NET OIL AND GAS PROPERTIES, utilizing the
   full cost method                                        71,444     116,932

DEFERRED CHARGE                                             3,334      68,024
                                                          -------     -------

                                                         $221,590    $438,562
                                                          =======     =======

                       LIABILITIES AND PARTNERS' CAPITAL
                      ----------------------------------
CURRENT LIABILITIES:
   Accounts payable                                      $  3,225    $ 11,961
   Gas imbalance payable                                   47,188      26,912
                                                          -------     -------
     Total current liabilities                           $ 50,413    $ 38,873

ACCRUED LIABILITY                                          85,405     127,351

PARTNERS' CAPITAL:
   General Partner, issued and
     outstanding, 70 Units                                    857       2,722
   Limited Partners, issued and
     outstanding, 7,000 Units                              84,915     269,616
                                                          -------     -------
   Total Partners' capital                               $ 85,772    $272,338
                                                          -------     -------

                                                         $221,590    $438,562
                                                          =======     =======






                    The accompanying notes are an integral
                      part of these financial statements



                                       20
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1981-1 LIMITED PARTNERSHIP
                           Statements of Operations
             For the Years Ended December 31, 1997, 1996, and 1995


                                             1997          1996        1995
                                          ----------     --------    --------
REVENUES:
   Oil and gas sales, including
     $211,735 of sales to related
     parties in 1995 (Note 2)              $166,664      $249,207    $240,251
   Interest                                   4,812         7,142       4,886
                                            -------       -------     -------
                                           $171,476      $256,349    $245,137

COSTS AND EXPENSES:
   Lease operating                         $ 75,972      $101,809    $101,650
   Production taxes                          10,453        19,946      17,094
   Depreciation, depletion, and
     amortization of oil and
     gas properties                          20,411        21,854      43,661
   General and administrative                74,456        69,892      70,951
                                            -------       -------     -------
                                           $181,292      $213,501    $233,356
                                            -------       -------     -------
NET INCOME (LOSS)                         ($  9,816)     $ 42,848    $ 11,781
                                            =======       =======     =======
GENERAL PARTNER (1%) -
   NET INCOME (LOSS)                      ($     98)     $    428    $    118
                                            =======       =======     =======
LIMITED PARTNERS (99%) -
   NET INCOME (LOSS)                      ($  9,718)     $ 42,420    $ 11,663
                                            =======       =======     =======
NET INCOME (LOSS) per Unit                ($   1.39)     $   6.06    $   1.67
                                            =======       =======     =======
UNITS OUTSTANDING                             7,070         7,070       7,070
                                            =======       =======     =======













                    The accompanying notes are an integral
                      part of these financial statements



                                       21
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1981-1 LIMITED PARTNERSHIP
                        Statements of Partners' Capital
             For the Years Ended December 31, 1997, 1996, and 1995

                                         General      Limited
                                         Partner     Partners        Total
                                        --------    ----------    ----------

Balances at December 31, 1994            $2,176      $215,533      $217,709
   Net income                               118        11,663        11,781
                                          -----       -------       -------

Balances at December 31, 1995            $2,294      $227,196      $229,490
   Net income                               428        42,420        42,848
                                          -----       -------       -------

Balances at December 31, 1996            $2,722      $269,616      $272,338
   Cash distributions                   ( 1,767)    ( 174,983)    ( 176,750)
   Net loss                             (    98)    (   9,718)    (   9,816)
                                          -----       -------       -------

Balances at December 31, 1997            $  857      $ 84,915      $ 85,772
                                          =====       =======       =======



























              The accompanying notes are an integral part of these
                              financial statements.



                                       22
<PAGE>



                                 DYCO OIL AND GAS PROGRAM
                                1981-1 LIMITED PARTNERSHIP
                                 Statements of Cash Flows
                   For the Years Ended December 31, 1997, 1996, and 1995

                                               1997        1996        1995
                                            ----------  ----------  ----------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                        ($  9,816)   $ 42,848    $ 11,781
   Adjustments to reconcile net income
     (loss) to net cash provided
     by operating activities:
     Depreciation, depletion,
       and amortization of oil
       and gas properties                      20,411      21,854      43,661
     (Increase) decrease in accrued
       oil and gas sales                       27,927   (  17,954)  (   2,213)
     (Increase) decrease in
       deferred charge                         64,690   (  36,464)     12,282
     Decrease in accounts payable           (   8,736)  (  13,861)  (      61)
     Increase (decrease) in
       gas imbalance payable                   20,276      25,529   (  14,051)
     Increase (decrease) in
      accrued liability                     (  41,946)     49,186      13,382
                                              -------     -------     -------
   Net cash provided by operating
     activities                              $ 72,806    $ 71,138    $ 64,781
                                              -------     -------     -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
     and gas properties                      $ 26,596    $ 42,307    $   -
   Additions to oil and gas
     properties                             (   1,519)  (   1,805)  (  69,838)
                                              -------     -------     -------
   Net cash provided (used) by
     investing activities                    $ 25,077    $ 40,502   ($ 69,838)
                                              -------     -------     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                       ($176,750)   $   -       $   -
                                              -------     -------     -------
   Net cash used by financing
     activities                             ($176,750)   $   -       $   -
                                              -------     -------     -------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                     ($ 78,867)   $111,640   ($  5,057)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                        197,842      86,202      91,259
                                              -------     -------     -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                             $118,975    $197,842    $ 86,202
                                              =======     =======     =======

              The accompanying notes are an integral part of these
                              financial statements.



                                       23
<PAGE>



              DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                         Notes to Financial Statements
             For the Years Ended December 31, 1997, 1996, and 1995


1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Organization and Nature of Operations

            The  Dyco  Oil and  Gas  Program  1981-1  Limited  Partnership  (the
      "Program"),  a Minnesota  limited  partnership,  commenced  operations  on
      February  7, 1981.  Dyco  Petroleum  Corporation  ("Dyco")  is the General
      Partner of the  Program.  Affiliates  of Dyco owned  2,997  (42.4%) of the
      Program's Units at December 31, 1997.

            The Program's sole business is the development and production of oil
      and gas with a concentration  on gas.  Substantially  all of the Program's
      gas reserves are being sold  regionally  in the "spot  market." Due to the
      highly  competitive  nature of the spot market,  prices on the spot market
      are  subject  to wide  seasonal  and  regional  pricing  fluctuations.  In
      addition,  such spot market sales are  generally  short-term in nature and
      are dependent upon the obtaining of  transportation  services  provided by
      pipelines.


            Cash and Cash Equivalents

            The Program considers all highly liquid  investments with a maturity
      of three  months  or less  when  purchased  to be cash  equivalents.  Cash
      equivalents  are not  insured,  which  cause the  Program to be subject to
      risk.


            Credit Risk

            Accrued  oil and gas sales  which are due from a variety  of oil and
      gas purchasers subject the Program to a concentration of credit risk. Some
      of these purchasers are discussed in Note 3 - Major Customers.  Subsequent
      to  year-end,  all oil and gas sales  accrued as of December 31, 1997 have
      been collected.


            Oil and Gas Properties

            Oil and gas  operations are accounted for using the full cost method
      of accounting. All productive and non-productive costs associated with the
      acquisition,  exploration,  and  development  of oil and gas  reserves are
      capitalized.  Capitalized  costs are depleted on the gross revenue  method
      using estimates of proved reserves. The full cost amortization


                                       24
<PAGE>



      rates  per  equivalent  Mcf  of  gas  produced   during  the  years  ended
      December  31,  1997,  1996,  and  1995  were  $0.31,   $0.19,  and  $0.25,
      respectively.  The Program's calculation of depreciation,  depletion,  and
      amortization  includes  estimated  future  expenditures  to be incurred in
      developing  proved  reserves and estimated  dismantlement  and abandonment
      costs, net of estimated  salvage values. In the event the unamortized cost
      of oil and gas properties  being  amortized  exceeds the full cost ceiling
      (as defined by the Securities and Exchange  Commission ("SEC")) the excess
      is charged to expense in the year  during  which such  excess  occurs.  In
      addition, SEC rules provide that if prices decline subsequent to year end,
      any excess that results from these declines may also be charged to expense
      during  the  current  year.  Sales  and  abandonments  of  properties  are
      accounted for as  adjustments  of  capitalized  costs with no gain or loss
      recognized,   unless  such  adjustments  would   significantly  alter  the
      relationship between capitalized costs and proved oil and gas reserves.


            Deferred Charge

            The Deferred Charge at December 31, 1997 and 1996  represents  costs
      deferred for lease  operating  expenses  incurred in  connection  with the
      Program's  underproduced  gas  imbalance  positions.   The  rate  used  in
      calculating  the deferred  charge is the average of the annual  production
      costs per Mcf. At December 31, 1997,  cumulative  total gas sales  volumes
      for  underproduced  wells were less than the Program's  pro-rata  share of
      total gas production  from these wells by 4,102 Mcf,  resulting in prepaid
      lease operating expenses of $3,334. At December 31, 1996, cumulative total
      gas sales  volumes for  underproduced  wells were less than the  Program's
      pro-rata  share of total gas  production  from these  wells by 71,907 Mcf,
      resulting in prepaid lease operating expenses of $68,024.


            Accrued Liability

            The  Accrued  Liability  at December  31,  1997 and 1996  represents
      charges accrued for lease operating  expenses  incurred in connection with
      the  Program's  overproduced  gas  imbalance  positions.  The rate used in
      calculating the accrued  liability is the average of the annual production
      costs per Mcf. At December 31, 1997,  cumulative  total gas sales  volumes
      for overproduced  wells exceeded the Program's pro-rata share of total gas
      production  from these wells by 105,075 Mcf,  resulting  in accrued  lease
      operating expenses of $85,405. At December 31, 1996,  cumulative total gas
      sales volumes for overproduced wells exceeded the Program's pro-rata share
      of total gas production from these wells by


                                       25
<PAGE>



      134,621 Mcf, resulting in accrued lease operating expenses of $127,351.


      Oil and Gas Sales and Gas Imbalance Payable

            The Program's oil and condensate  production is sold,  title passed,
      and revenue  recognized  at or near the Program's  wells under  short-term
      purchase  contracts at prevailing  prices in accordance with  arrangements
      which are  customary in the oil industry.  Sales of gas  applicable to the
      Program's  interest in producing oil and gas leases are recorded as income
      when the gas is metered  and title  transferred  pursuant to the gas sales
      contracts  covering the Program's  interest in gas  reserves.  During such
      times as the  Program's  sales of gas exceed its pro rata  ownership  in a
      well,  such sales are recorded as income  unless total sales from the well
      have  exceeded  the  Program's  share  of  estimated  total  gas  reserves
      underlying  the  property  at which  time  such  excess is  recorded  as a
      liability. The rates per Mcf used to calculate this liability are based on
      the  average  gas  prices  received  for  the  volumes  at  the  time  the
      overproduction  occurred.  At December 31, 1997,  total sales exceeded the
      Program's  share of estimated total gas reserves on three wells by $47,188
      (36,735  Mcf).  At December 31, 1996 total sales  exceeded  the  Program's
      share of estimated  total gas  reserves on three wells by $26,912  (17,941
      Mcf).  These amounts were  recorded as gas imbalance  payables at December
      31, 1997 and 1996 in accordance with the sales method.


            Use of Estimates in Financial Statements

            The preparation of financial statements in conformity with generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenues and expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.  Further,  the deferred charge, the gas imbalance payable,  and
      the accrued  liability all involve estimates which could materially differ
      from the actual amounts ultimately  realized or incurred in the near term.
      Oil and gas reserves (see Note 4) also involve significant estimates which
      could materially differ from the actual amounts ultimately realized.





                                       26
<PAGE>



            Income Taxes

            Income or loss for income tax purposes is  includable  in the income
      tax returns of the partners. Accordingly, no recognition has been given to
      income taxes in the accompanying financial statements.


2.    TRANSACTIONS WITH RELATED PARTIES

            Under  the  terms of the  Program  Agreement,  Dyco is  entitled  to
      receive  a   reimbursement   for  all  direct  expenses  and  general  and
      administrative,  geological,  and engineering expenses it incurs on behalf
      of the Program.  During the years ended December 31, 1997, 1996, and 1995,
      such expenses  totaled $74,456,  $69,892,  and $70,951,  respectively,  of
      which $50,052 was paid each year to Dyco and its affiliates.

            Affiliates  of  the  Program   operate   certain  of  the  Program's
      properties.  Their policy is to bill the Program for all customary charges
      and cost  reimbursements  associated with these activities,  together with
      any  compressor  rentals,  consulting,  or other services  provided.  Such
      charges are  comparable to third party charges in the area where the wells
      are located and are the same as charged to other working  interest  owners
      in the wells.

            During 1995 the Program sold gas at market  prices to El Paso Energy
      Marketing  Company,  formerly known as Premier Gas Company ("El Paso"). El
      Paso,  like other  similar gas  marketing  firms,  then resold such gas to
      third  parties at market  prices.  El Paso was an affiliate of the Program
      until December 6, 1995. During 1995, these sales totaled $211,735.


3.    MAJOR CUSTOMERS

                  The following purchaser individually accounted for 10% or more
      of the combined oil and gas sales (excluding the gas imbalance adjustment)
      of the Program for the years ended December 31, 1997, 1996, and 1995:


                Purchaser         1997    1996     1995
                ---------         -----   -----    -----

                El Paso           91.3%   97.9%    88.1%

            In the  event  of  interruption  of  purchases  by this  significant
      customer  or  the  cessation  or  material   change  in   availability  of
      open-access  transportation by the Program's  pipeline  transporters,  the
      Program may encounter  difficulty in marketing its gas and in  maintaining
      historic sales


                                       27
<PAGE>



levels.  Alternative purchasers or transporters may not be readily available.


4.    SUPPLEMENTAL OIL AND GAS INFORMATION

            The  following  supplemental  information  regarding the oil and gas
      activities  of  the  Program  is  presented  pursuant  to  the  disclosure
      requirements promulgated by the SEC.

            Capitalized Costs

            The  Program's  capitalized  costs  and  accumulated   depreciation,
      depletion,  amortization, and valuation allowance at December 31, 1997 and
      1996 were as follows:




                                                      December 31,
                                             -------------------------------
                                                 1997              1996
                                             -------------     -------------

     Proved properties                        $41,120,448       $41,145,525

     Unproved properties, not
        subject to depreciation,
       depletion, and amortization                   -                 -
                                               ----------        ----------

                                              $41,120,448       $41,145,525

     Less accumulated depreciation,
        depletion, amortization, and
        valuation allowance                  ( 41,049,004)     ( 41,028,593)
                                               ----------        ----------

     Net oil and gas properties               $    71,444       $   116,932
                                               ==========        ==========





                                       28
<PAGE>



      Cost Incurred

            The  Program  incurred  no  oil  and  gas  property  acquisition  or
      exploration  costs  during 1997,  1996,  and 1995.  Costs  incurred by the
      Program in connection with its oil and gas property development activities
      during 1997, 1996, and 1995 were as follows:


                                                  December 31,

                                          ----------------------------
                                           1997       1996      1995
                                          ------     ------    -------

     Development costs                    $1,519     $1,805    $69,838
                                           =====      =====     ======



                                       29
<PAGE>



      Quantities of Proved Oil and Gas Reserves - Unaudited

            Set forth below is a summary of the changes in the net quantities of
the Program's proved crude oil and gas reserves for the years ended December 31,
1997,  1996, and 1995.  Proved  reserves were  estimated by petroleum  engineers
employed by affiliates of Dyco. All of the Program's reserves are located in the
United  States.  The  following   information  includes  certain  gas  balancing
adjustments  which cause the gas volumes to differ from the reserve  information
prepared by Dyco.
<TABLE>
<CAPTION>

                                               1997                      1996                       1995
                                        ------------------        ------------------         ------------------
                                          Oil         Gas           Oil         Gas            Oil         Gas
                                        (Bbls)       (Mcf)        (Bbls)       (Mcf)         (Bbls)       (Mcf)
                                        -------    ---------      -------    ---------       -------    ---------

<S>                                     <C>        <C>            <C>        <C>             <C>        <C>    
Proved reserves,
   beginning of year                     6,894      393,628        3,245      583,341         3,302      593,253

Revisions of previous
   estimates                               252     ( 19,620)       3,874     ( 75,738)          594      164,018

Sales of reserves                       (3,608)    ( 24,297)        -            -             -            -

Extensions and discoveries                -           3,680         -            -             -            -

Production                              (  169)    ( 64,261)      (  225)    (113,975)       (  651)    (173,930)
                                         -----      -------        -----      -------         -----      -------
Proved reserves,
   end of year                           3,369      289,130        6,894      393,628         3,245      583,341
                                         =====      =======        =====      =======         =====      =======
Proved developed reserves:
   Beginning of year                     6,894      393,628        3,245      583,341         3,302      593,253
                                         -----      -------        -----      -------         -----      -------
   End of year                           3,369      289,130        6,894      393,628         3,245      583,341
                                         =====      =======        =====      =======         =====      =======
</TABLE>



                                       30
<PAGE>



      The process of  estimating  oil and gas  reserves  is  complex,  requiring
      significant   subjective   decisions  in  the   evaluation   of  available
      geological,  engineering,  and economic data for each reservoir.  The data
      for a given reservoir may change  substantially  over time as a result of,
      among other things,  additional development activity,  production history,
      and  viability  of   production   under   varying   economic   conditions;
      consequently,  it  is  reasonably  possible  that  material  revisions  to
      existing  reserve  estimates may occur in the near future.  Although every
      reasonable  effort  has been made to  ensure  that the  reserve  estimates
      reported  herein  represent the most  accurate  assessment  possible,  the
      significance  of  the  subjective  decisions  required  and  variances  in
      available data for various reservoirs make these estimates  generally less
      precise  than other  estimates  presented  in  connection  with  financial
      statement disclosures.  The Program's reserves were determined at December
      31,  1997 using oil and gas prices of $16.25 per barrel and $2.32 per Mcf,
      respectively.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

      None.

PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The Program is a limited  partnership  and has no  directors  or executive
officers.  The following  individuals  are  directors and executive  officers of
Dyco, the general partner.  The business address of such directors and executive
officers is Two West Second Street, Tulsa, Oklahoma 74103.


            NAME             AGE           POSITION WITH DYCO
      ----------------       ---    --------------------------------
      Dennis R. Neill         46    President and Director

      Patrick M. Hall         39    Chief Financial Officer

      Judy K. Fox             47    Secretary


      The  director   will  hold  office  until  the  next  annual   meeting  of
shareholders  of Dyco  and  until  his  successor  has  been  duly  elected  and
qualified.  All  executive  officers  serve at the  discretion  of the  Board of
Directors.

      Dennis R. Neill joined the Samson Companies in 1981, was named Senior Vice
President and Director of Dyco on June 18, 1991,


                                       31
<PAGE>



and was named  President of Dyco on June 30,  1996.  Prior to joining the Samson
Companies,  he was associated with a Tulsa law firm,  Conner and Winters,  where
his  principal  practice was in the  securities  area. He received a Bachelor of
Arts degree in political  science from  Oklahoma  State  University  and a Juris
Doctorate  degree from the University of Texas.  Mr. Neill also serves as Senior
Vice  President of Samson  Investment  Company and as President  and Director of
Samson Properties Incorporated,  Samson Hydrocarbons Company, Berry Gas Company,
Circle L Drilling Company,  Compression,  Inc., and Geodyne Resources,  Inc. and
its subsidiaries.

      Patrick  M. Hall  joined the Samson  Companies  in 1983,  was named a Vice
President of Dyco on June 18,  1991,  and was named Chief  Financial  Officer of
Dyco on June 30,  1996.  Prior to joining the Samson  Companies  he was a senior
accountant with Peat Marwick Main & Co. in Tulsa. He holds a Bachelor of Science
degree in accounting  from Oklahoma State  University and is a Certified  Public
Accountant. Mr. Hall also serves as Senior Vice President - Controller of Samson
Investment Company.

     Judy K. Fox joined the Samson  Companies in 1990 and was named Secretary of
Dyco on June 30, 1996. Prior to joining the Samson Companies,  she served as Gas
Contract Manager for Ely Energy Company.  Ms. Fox is also Secretary of Berry Gas
Company,  Circle L Drilling  Company,  Compression,  Inc.,  Samson  Hydrocarbons
Company,  Samson Properties  Incorporated,  and Geodyne Resources,  Inc. and its
subsidiaries.


      Section 16(a) Beneficial Ownership Reporting Compliance

      To the best  knowledge  of the Program and Dyco,  there were no  officers,
directors,  or ten  percent  owners who were  delinquent  filers  during 1997 of
reports required under Section 16(a) of the Securities and Exchange Act of 1934.


ITEM 11.  EXECUTIVE COMPENSATION

      The Program is a limited  partnership and,  therefore,  has no officers or
directors.  The following  table  summarizes  the amounts paid by the Program as
compensation and  reimbursements  to Dyco and its affiliates for the three years
ended December 31, 1997:





                                       32
<PAGE>



             Compensation/Reimbursement to Dyco and its affiliates
                      Three Years Ended December 31, 1997

Type of Compensation/Reimbursement(1)                     Expense
-------------------------------------           -----------------------------
                                                 1997       1996       1995
                                                -------    -------    -------
Compensation:
   Operations                                     (2)        (2)        (2)
   Gas Marketing                                  (3)        (3)        (3)

Reimbursements:
   General and Administrative,
     Geological, and Engineering
     Expenses and Direct Expenses(4)            $50,052    $50,052    $50,052
----------

(1)   The  authority  for  all of such  compensation  and  reimbursement  is the
      Program Agreement.  With respect to the Operations activities noted in the
      table, management believes that such compensation is equal to or less than
      that  charged by  unaffiliated  persons in the same  geographic  areas and
      under the same conditions.
(2)   Affiliates of the Program  serve as operator of a  significant  portion of
      the  Program's  wells.  Dyco,  as  general  partner,  contracts  with such
      affiliates  for  services  as  operator of the wells.  As  operator,  such
      affiliates are  compensated at rates provided in the operating  agreements
      in effect and charged to all parties to such agreement.  The dollar amount
      of such  compensation paid by the Program to such affiliates is impossible
      to quantify as of the date of this Annual Report.
(3)   During 1995 El Paso, an affiliate of the Program  until  December 6, 1995,
      purchased a portion of the  Program's gas at market prices and resold such
      gas  at  market  prices  directly  to  end-users  and  local  distribution
      companies. During 1995, the Program sold $211,735 of gas to El Paso. After
      December  6,  1995,  the  Program's  gas  was  marketed  by  Dyco  and its
      affiliates,  who  were  reimbursed  for such  activities  as  general  and
      administrative expenses.
(4)   The  Program  reimburses  Dyco  and  its  affiliates  for  reasonable  and
      necessary general and administrative, geological, and engineering expenses
      and direct  expenses  incurred in  connection  with their  management  and
      operation of the Program. The directors,  officers,  and employees of Dyco
      and its  affiliates  receive no direct  remuneration  from the Program for
      their services to the Program. See "Salary Reimbursement Table" below. The
      allocable general and administrative, geological, and engineering expenses
      are apportioned on a reasonable  basis between the Program's  business and
      all other oil and gas  activities  of Dyco and its  affiliates,  including
      Dyco's  management  and  operation  of  affiliated  oil  and  gas  limited
      partnerships. The allocation


                                       33
<PAGE>



      to the Program of these costs is made by Dyco as General Partner.

      As noted in the  Compensation/Reimbursement  Table above,  the  directors,
officers,  and  employees  of  Dyco  and  their  affiliates  receive  no  direct
remuneration  from the Program for their services.  However,  to the extent such
services  represent direct  involvement with the Program,  as opposed to general
corporate  functions,  such persons' salaries are allocated to and reimbursed by
the  Program.  Such  allocation  to the  Program's  general and  administrative,
geological, and engineering expenses of the salaries of directors, officers, and
employees of Dyco and its affiliates is based on internal records  maintained by
Dyco and its affiliates,  and represents investor relations,  legal, accounting,
data  processing,  management,  gas  marketing,  and  other  functions  directly
attributable  to the Program's  operations.  The following  table  indicates the
approximate   amount  of  general  and  administrative   expense   reimbursement
attributable to the salaries of the directors,  officers,  and employees of Dyco
and its affiliates for the three years ended December 31, 1997:



                                       34
<PAGE>

<TABLE>
<CAPTION>


                                                   Salary Reimbursement
                                            Three Years Ended December 31, 1997

                                                                       Long Term Compensation
                                                                ------------------------------------
                                 Annual Compensation                   Awards                Payouts
                              -------------------------         -------------------------    -------
                                                                                 Securi-
                                                     Other                        ties                     All
     Name                                            Annual     Restricted       Under-                   Other
      and                                           Compen-       Stock          lying        LTIP       Compen-
   Principal                  Salary       Bonus    sation       Award(s)       Options/     Payouts     sation
   Position           Year      ($)         ($)       ($)          ($)           SARs(#)       ($)         ($)
---------------       ----    -------     -------   -------     ----------      --------     -------     -------
<S>                   <C>     <C>          <C>       <C>         <C>             <C>          <C>         <C>
C. Philip
Tholen,
President,
Chief Executive
Officer(1)(2)         1995      -           -         -           -               -            -           -
                      1996      -           -         -           -               -            -           -
                      1997      -           -         -           -               -            -           -
Dennis R. Neill,
President(2)(3)       1997      -           -         -           -               -            -           -

All Executive
Officers,
Directors,
and Employees
as a group(4)         1995    $27,328       -         -           -               -            -           -
                      1996    $29,280       -         -           -               -            -           -
                      1997    $29,901       -         -           -               -            -           -
---------------
(1)   Mr. Tholen served as President and Chief  Executive  Officer of Dyco until
      June 30, 1996.
(2)   The  general  and   administrative   expenses  paid  by  the  Program  and
      attributable to salary  reimbursements  do not include any salary or other
      compensation attributable to Mr. Tholen or Mr. Neill.
(3)   Mr. Neill became President of Dyco on June 30, 1996.
(4)   No  officer  or  director  of Dyco or its  affiliates  provides  full-time
      services to the Program and no individual's  salary or other  compensation
      reimbursement from the Program equals or exceeds $100,000 per annum.
</TABLE>



                                       35
<PAGE>



      In addition to the  compensation/reimbursements  noted  above,  during the
three years ended December 31, 1997,  the Samson  Companies were in the business
of  supplying  field and  drilling  equipment  and  services to  affiliated  and
unaffiliated parties in the industry. Such companies may have provided equipment
and services for wells in which the Program has an interest. These equipment and
services were  provided at prices or rates equal to or less than those  normally
charged in the same or comparable  geographic  area by  unaffiliated  persons or
companies dealing at arm's length. The operators of these wells bill the Program
for a portion of such costs based upon the Program's interest in the well.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table provides information as to the beneficial ownership of
the  Program's  Units as of February 28, 1998 by each  beneficial  owner of more
than 5% of the issued and outstanding Units and by the directors,  officers, and
affiliates  of Dyco.  The address of each of such persons is Samson  Plaza,  Two
West Second Street, Tulsa, Oklahoma 74103.


                                                           Number of Units
                                                            Beneficially
                                                           Owned (Percent
            Beneficial Owner                               of Outstanding)
-----------------------------------------                 -----------------

Samson Resources Company                                   2,998    (42.4%)

All directors, officers, and affiliates
   of Dyco as a group and Dyco (5 persons)                 2,998    (42.4%)



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Certain affiliates of Dyco engage in oil and gas activities  independently
of the Program  which  result in  conflicts  of interest  that cannot be totally
eliminated.  The allocation of acquisition  and drilling  opportunities  and the
nature of the compensation  arrangements between the Program and such affiliates
also create potential conflicts of interest.  An affiliate of the Program owns a
significant  amount of the Program's Units of limited  partnership  interest and
therefore has an identity of interest  with other limited  partners with respect
to the operations of the Program.

     In order to attempt to assure  limited  liability  for limited  partners as
well as an orderly  conduct of business,  management of the Program is exercised
solely by Dyco. The Program Agreement


                                       36
<PAGE>



grants  Dyco  broad  discretionary  authority  with  respect  to  the  Program's
participation  in  drilling  prospects  and  expenditure  and  control of funds,
including  borrowings.  These  provisions  are  similar  to those  contained  in
prospectuses   and   partnership   agreements  for  other  public  oil  and  gas
partnerships.  Broad discretion as to general management of the Program involves
circumstances  where Dyco has  conflicts of interest and where it must  allocate
costs and  expenses,  or  opportunities,  among the Program and other  competing
interests.

      Dyco does not devote all of its time, efforts,  and personnel  exclusively
to the  Program.  Furthermore,  the  Program  does not have any  employees,  but
instead  relies on the  personnel  of the Samson  Companies.  The  Program  thus
competes with the Samson Companies  (including other currently sponsored oil and
gas programs) for the time and resources of such personnel. The Samson Companies
devote such time and personnel to the management of the Program as are indicated
by the circumstances and as are consistent with Dyco's fiduciary duties.

      Affiliates  of the Program  are solely  responsible  for the  negotiation,
administration,  and  enforcement of oil and gas sales  agreements  covering the
Program's  leasehold  interests.  Because  affiliates of the Program who provide
services to the Program have  fiduciary or other duties to other  members of the
Samson Companies, contract amendments and negotiating positions taken by them in
their effort to enforce contracts with purchasers may not necessarily  represent
the  positions  that a  Program  would  take if it were  to  administer  its own
contracts without involvement with other members of the Samson Companies. On the
other hand,  management  believes  that the Program's  negotiating  strength and
contractual  positions have been enhanced by virtue of its affiliation  with the
Samson Companies.

     For  a  description   of  certain  other   relationships   of  and  related
transactions see "Item 11. Executive Compensation."



                                       37
<PAGE>



PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

          (a)  Financial   Statements,   Financial  Statement   Schedules,   and
               Exhibits.

               (1)  Financial Statements: The following financial statements for
                    the  Program as of  December  31,  1997 and 1996 and for the
                    years ended  December 31, 1997,  1996, and 1995 are filed as
                    part of this report:

                        Report of Independent Accountants
                        Balance Sheets
                        Statements of Operations
                        Statements of Partners' Capital
                        Statements of Cash Flows
                        Notes to Financial Statements

               (2)  Financial Statement Schedules:

                        None.

               (3)  Exhibits:

                    4.1  Drilling Agreement dated February 11, 1981 for Dyco Oil
                         and Gas Program  1981-1 by and between Dyco Oil and Gas
                         Program 1981-1, Dyco Petroleum Corporation, and Jaye F.
                         Dyer filed as Exhibit 4.1 to Annual Report on Form 10-K
                         for the year ended  December 31, 1991 on April 13, 1992
                         and is hereby incorporated herein.

                    4.2  Form of Program  Agreement for Dyco Oil and Gas Program
                         1981-1 by and between Dyco  Petroleum  Corporation  and
                         the Participants  filed as Exhibit 4.2 to Annual Report
                         on Form 10-K for the year ended  December  31,  1991 on
                         April 13, 1992 and is hereby incorporated herein.

                    4.3  Amendment  to  Program  Agreement  for Dyco Oil and Gas
                         Program  1981-1 dated February 9, 1989 filed as Exhibit
                         4.3 to Annual  Report  on Form 10-K for the year  ended
                         December  31,  1991 on April  13,  1992  and is  hereby
                         incorporated herein.

                    4.4  Certificate of Limited Partnership, as amended for Dyco
                         Oil and Gas Program 1981-1 Limited


                                       38
<PAGE>



                         Partnership filed as  Exhibit  4.4 to Annual  Report on
                         Form 10-K for the year ended December 31, 1991 on April
                         13, 1992 and is hereby incorporated herein.

                   *27.1 Financial Data Schedule  containing  summary  financial
                         information extracted from the Dyco Oil and Gas Program
                         1981-1 Limited Partnership's financial statements as of
                         December  31, 1997 and for the year ended  December 31,
                         1997.

                    All other Exhibits are omitted as inapplicable.


                  -------------------
                  *  Filed herewith.


      (b) Reports on Form 8-K filed during the fourth quarter of 1997:

                  None.



                                       39
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly organized.

                                    DYCO OIL AND GAS PROGRAM 1981-1
                                    LIMITED PARTNERSHIP

                                    By:   DYCO PETROLEUM CORPORATION
                                          General Partner

                                          March 27, 1998

                                    By:   /s/Dennis R. Neill
                                          ------------------------------
                                          Dennis R. Neill
                                          President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities on the dates indicated.

By:   /s/Dennis R. Neill        President and            March 27, 1998
      -------------------       Director (Principal
         Dennis R. Neill        Executive Officer)

      /s/Patrick M. Hall        Chief Financial          March 27, 1998
      -------------------       Officer (Principal
         Patrick M. Hall        Financial and
                                Accounting Officer)

      /s/Judy K. Fox            Secretary                March 27, 1998
      -------------------
         Judy K. Fox




                                       40
<PAGE>



                               INDEX TO EXHIBITS


Exhibit
Number      Description
-------     -----------

4.1         Drilling  Agreement  dated  February  11,  1981 for Dyco Oil and Gas
            Program 1981-1 by and between Dyco Oil and Gas Program 1981-1,  Dyco
            Petroleum  Corporation,  and Jaye F. Dyer  filed as  Exhibit  4.1 to
            Annual  Report on Form 10-K for the year ended  December 31, 1991 on
            April 13, 1992 and is hereby incorporated herein.

4.2         Form of Program Agreement for Dyco Oil and Gas Program 1981-1 by and
            between Dyco Petroleum  Corporation  and the  Participants  filed as
            Exhibit  4.2 to  Annual  Report  on Form  10-K  for the  year  ended
            December  31,  1991 on April  13,  1992 and is  hereby  incorporated
            herein.

4.3         Amendment to Program  Agreement for Dyco Oil and Gas Program  1981-1
            dated February 9, 1989 filed as Exhibit 4.3 to Annual Report on Form
            10-K for the year ended  December  31, 1991 on April 13, 1992 and is
            hereby incorporated herein.

4.4         Certificate of Limited Partnership,  as amended for Dyco Oil and Gas
            Program  1981-1 Limited  Partnership  filed as Exhibit 4.4 to Annual
            Report on Form 10-K for the year ended  December  31,  1991 on April
            13, 1992 and is hereby incorporated herein.

*27.1       Financial Data Schedule  containing  summary  financial  information
            extracted   from  the  Dyco  Oil  and  Gas  Program  1981-1  Limited
            Partnership's  financial  statements as of December 31, 1997 and for
            the year ended December 31, 1997.


-------------------
*  Filed herewith.


                                       41