SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549



                                    FORM 10-Q


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


For the quarter ended                     Commission File Number
   June 30, 2000                                  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    (I.R.S. Employer Identification
   of incorporation or                         Number)
     organization)



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



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


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 such  filing
requirements for the past 90 days.

                        Yes   X               No
                            ------                 ------




                                      -1-
<PAGE>




                        PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                                 BALANCE SHEETS
                                   (Unaudited)

                                     ASSETS

                                                June 30,       December 31,
                                                  2000             1999
                                               ----------      ------------

CURRENT ASSETS:
   Cash and cash equivalents                     $133,098         $ 88,532
   Accrued oil and gas sales                       34,149           27,008
                                                 --------         --------
      Total current assets                       $167,247         $115,540

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                            32,875           35,194
                                                 --------         --------
                                                 $200,122         $150,734
                                                 ========         ========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                              $  2,427         $  2,535
   Gas imbalance payable                           17,787           17,787
                                                 --------         --------
      Total current liabilities                  $ 20,214         $ 20,322

ACCRUED LIABILITY                                $ 56,362         $ 56,362

PARTNERS' CAPITAL:
   General Partner, 70 general
      partner units                              $  1,234         $    739
   Limited Partners, issued and
      outstanding, 7,000 Units                    122,312           73,311
                                                 --------         --------
      Total Partners' capital                    $123,546         $ 74,050
                                                 --------         --------
                                                 $200,122         $150,734
                                                 ========         ========


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



                                      -2-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)

                                                  2000              1999
                                                --------          --------

REVENUES:
   Oil and gas sales                             $47,780           $62,414
   Interest                                        1,607               295
                                                 -------           -------
                                                 $49,387           $62,709

COSTS AND EXPENSES:
   Oil and gas production                        $ 6,970           $10,284
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                     528             2,557
   General and administrative
      (Note 2)                                     8,021            13,437
                                                 -------           -------
                                                 $15,519           $26,278
                                                 -------           -------

NET INCOME                                       $33,868           $36,431
                                                 =======           =======
GENERAL PARTNER (1%) - net income                $   339           $   364
                                                 =======           =======
LIMITED PARTNERS (99%) - net income              $33,529           $36,067
                                                 =======           =======
NET INCOME PER UNIT                              $  4.79           $  5.15
                                                 =======           =======
UNITS OUTSTANDING                                  7,070             7,070
                                                 =======           =======



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



                                      -3-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)

                                                  2000              1999
                                                --------          --------

REVENUES:
   Oil and gas sales                             $89,795           $89,235
   Interest                                        2,839               604
                                                 -------           -------
                                                 $92,634           $89,839

COSTS AND EXPENSES:
   Oil and gas production                        $17,212           $30,681
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   2,275             5,191
   General and administrative
      (Note 2)                                    23,651            39,025
                                                 -------           -------
                                                 $43,138           $74,897
                                                 -------           -------

NET INCOME                                       $49,496           $14,942
                                                 =======           =======
GENERAL PARTNER (1%) - net income                $   495           $   149
                                                 =======           =======
LIMITED PARTNERS (99%) - net income              $49,001           $14,793
                                                 =======           =======
NET INCOME PER UNIT                              $  7.00           $  2.11
                                                 =======           =======
UNITS OUTSTANDING                                  7,070             7,070
                                                 =======           =======



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



                                      -4-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)


                                                    2000            1999
                                                  --------        --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                     $ 49,496         $14,942
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                   2,275           5,191
      (Increase) decrease in accrued oil
        and gas sales                            (   7,141)            806
      Increase (decrease) in accounts
        payable                                  (     108)            240
                                                  --------         -------
   Net cash provided by operating
      activities                                  $ 44,522         $21,179
                                                  --------         -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil and
      gas properties                              $     44         $10,270
                                                  --------         -------
   Net cash provided by investing
      activities                                  $     44         $10,270
                                                  --------         -------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Net cash used by financing
      activities                                  $      -         $     -
                                                  --------         -------

NET INCREASE IN CASH AND CASH
   EQUIVALENTS                                    $ 44,566         $31,449

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                              88,532          31,207
                                                  --------         -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                  $133,098         $62,656
                                                  ========         =======


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


                                      -5-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                   CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (Unaudited)


1.    ACCOUNTING POLICIES
      -------------------

      The balance sheet as of June 30, 2000,  statements  of operations  for the
      three and six months ended June 30, 2000 and 1999,  and statements of cash
      flows for the six months  ended June 30, 2000 and 1999 have been  prepared
      by Dyco Petroleum  Corporation  ("Dyco"),  the General Partner of the Dyco
      Oil and Gas Program 1981-1 Limited  Partnership (the  "Program"),  without
      audit.  In the opinion of management all  adjustments  (which include only
      normal  recurring  adjustments)  necessary to present fairly the financial
      position at June 30,  2000,  results of  operations  for the three and six
      months ended June 30, 2000 and 1999, and changes in cash flows for the six
      months ended June 30, 2000 and 1999 have been made.

      Information  and  footnote  disclosures  normally  included  in  financial
      statements  prepared in  accordance  with  generally  accepted  accounting
      principles  have been  condensed or omitted.  It is  suggested  that these
      financial  statements be read in conjunction with the financial statements
      and notes thereto included in the Program's Annual Report on Form 10-K for
      the year ended December 31, 1999. The results of operations for the period
      ended June 30, 2000 are not  necessarily  indicative  of the results to be
      expected for the full year.


      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.  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),  the excess is
      charged to expense in the period  during which such excess  occurs.  Sales
      and abandonments of




                                      -6-
<PAGE>



      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.

      The provision for depreciation, depletion, and amortization of oil and gas
      properties is calculated by dividing the oil and gas sales dollars  during
      the  period by the  estimated  future  gross  income  from the oil and gas
      properties and applying the resulting  rate to the net remaining  costs of
      oil and gas properties that have been  capitalized,  plus estimated future
      development costs.


2.    TRANSACTIONS WITH RELATED PARTIES
      ---------------------------------

      Under the terms of the Program's partnership  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 three  months  ended June 30,  2000 and 1999 the
      Program incurred such expenses totaling $8,021 and $13,437,  respectively,
      of which $6,441 and $12,513,  respectively,  were paid each period to Dyco
      and its affiliates. During the six months ended June 30, 2000 and 1999 the
      Program incurred such expenses totaling $23,651 and $39,025, respectively,
      of which $12,882 and $25,026, respectively,  were paid each period 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.





                                      -7-
<PAGE>



ITEM 2.     MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
            RESULTS OF OPERATIONS


USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
-----------------------------------------------

      This Quarterly 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
      Quarterly 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, and otherwise indicated.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

      Net  proceeds  from the  Program's  operations  less  necessary  operating
      capital  are  distributed  to  investors  on a  quarterly  basis.  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 the Program's reserves which
      would result in a positive economic impact.





                                      -8-
<PAGE>




      The Program's  available capital from  subscriptions has been spent on oil
      and gas  drilling  activities.  There  should not be any further  material
      capital  resource  commitments  in the  future.  The  Program  has no debt
      commitments.  Management  believes  that  cash  for  ordinary  operational
      purposes will be provided by current oil and gas production.


RESULTS OF OPERATIONS
---------------------

      GENERAL DISCUSSION

      The following  general  discussion  should be read in conjunction with the
      analysis  of results of  operations  provided  below.  The most  important
      variables affecting the Program's revenues are the prices received for the
      sale of oil and gas and the volumes of oil and gas produced. The Program's
      production is mainly natural gas, so such pricing and volumes are the most
      significant factors.

      Due to the volatility of oil and gas prices,  forecasting future prices is
      subject to great  uncertainty  and  inaccuracy.  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.  Such spot market
      sales are  generally  short-term  in  nature  and are  dependent  upon the
      obtaining of transportation services provided by pipelines. It is likewise
      difficult  to  predict  production  volumes.  However,  oil  and  gas  are
      depleting  assets,  so it can be  expected  that  production  levels  will
      decline over time.  Recent gas prices have been higher than the  Program's
      historical  average.  This is  attributable to the higher prices for crude
      oil, a substitute  fuel in some  markets,  and reduced  production  due to
      lower capital investments in 1998 and 1999.

      THREE MONTHS  ENDED JUNE 30, 2000  COMPARED TO THE THREE MONTHS ENDED JUNE
      30, 1999.

                                                 Three Months Ended June 30,
                                                 ---------------------------
                                                   2000              1999
                                                  -------           -------
      Oil and gas sales                           $47,780           $62,414
      Oil and gas production expenses             $ 6,970           $10,284
      Barrels produced                                 16                31
      Mcf produced                                 14,171            28,677
      Average price/Bbl                           $ 24.25           $ 14.42
      Average price/Mcf                           $  3.34           $  2.16




                                      -9-
<PAGE>



      As shown in the table  above,  total oil and gas sales  decreased  $14,634
      (23.4%) for the three  months ended June 30, 2000 as compared to the three
      months ended June 30, 1999. Of this  decrease,  approximately  $31,000 was
      related to a decrease in volumes of gas sold,  which was partially  offset
      by an  increase  of  approximately  $18,000  related to an increase in the
      average  price  of gas  sold.  Volumes  of oil and gas sold  decreased  15
      barrels and 14,506 Mcf, respectively,  for the three months ended June 30,
      2000 as compared to the three months ended June 30, 1999.  The decrease in
      volumes  of gas sold was  primarily  due to (i) a  positive  prior  period
      volume  adjustment  made by the  purchaser  on one well  during  the three
      months ended June 30, 1999 and (ii) normal declines in production. Average
      oil and gas  prices  increased  to $24.25  per  barrel  and $3.34 per Mcf,
      respectively,  for the three  months  ended June 30,  2000 from $14.42 per
      barrel and $2.16 per Mcf,  respectively,  for the three  months ended June
      30, 1999.

      Oil and gas production  expenses  (including lease operating  expenses and
      production taxes) decreased $3,314 (32.2%) for the three months ended June
      30,  2000 as  compared  to the three  months  ended  June 30,  1999.  This
      decrease  was  primarily  due to a decrease  in lease  operating  expenses
      associated with the decrease in volumes of oil and gas sold. This decrease
      was partially  offset by an increase in production  taxes as a result of a
      refund  received  during  the  three  months  ended  June 30,  1999.  As a
      percentage of oil and gas sales, these expenses decreased to 14.6% for the
      three  months  ended June 30, 2000 from 16.5% for the three  months  ended
      June 30, 1999. This percentage decrease was primarily due to the increases
      in the average prices of oil and gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $2,029  (79.4%)  for the three  months  ended June 30,  2000 as
      compared  to the three  months  ended June 30,  1999.  This  decrease  was
      primarily due to (i) the decreases in volumes of oil and gas sold and (ii)
      an increase in the oil and gas prices used in the valuation of reserves at
      June 30, 2000 as compared to June 30, 1999. As a percentage of oil and gas
      sales,  this expense decreased to 1.1% for the three months ended June 30,
      2000 from 4.1% for the three months ended June 30, 1999.  This  percentage
      decrease  was  primarily  due  to the  dollar  decrease  in  depreciation,
      depletion, and amortization.

      General and administrative expenses decreased $5,416 (40.3%) for the three
      months  ended June 30, 2000 as compared to the three months ended June 30,
      1999. This decrease was primarily due to a change in allocation  among the
      Program  and  other   affiliated   programs   of   indirect   general  and
      administrative expenses reimbursed to the General Partner. As a percentage
      of oil and gas sales, these expenses



                                      -10-
<PAGE>



      decreased to 16.8% for the three months ended June 30, 2000 from 21.5% for
      the three  months  ended  June 30,  1999.  This  percentage  decrease  was
      primarily  due  to the  dollar  decrease  in  general  and  administrative
      expenses.

      SIX MONTHS  ENDED JUNE 30, 2000  COMPARED TO THE SIX MONTHS ENDED JUNE 30,
      1999.

                                                  Six Months Ended June 30,
                                                  -------------------------
                                                   2000              1999
                                                  -------           -------
      Oil and gas sales                           $89,795           $89,235
      Oil and gas production expenses             $17,212           $30,681
      Barrels produced                                 45                57
      Mcf produced                                 31,057            45,720
      Average price/Bbl                           $ 30.49           $ 13.16
      Average price/Mcf                           $  2.85           $  1.94

      As shown in the table above,  total oil and gas sales remained  relatively
      constant  for the six months  ended June 30,  2000 as  compared to the six
      months  ended  June  30,  1999.  An  increase  in oil  and  gas  sales  of
      approximately  $28,000  related to an increase in the average price of gas
      sold was  substantially  offset by a  decrease  of  approximately  $28,000
      related to a decrease in volumes of gas sold.  Volumes of oil and gas sold
      decreased  12 barrels  and 14,663  Mcf,  respectively,  for the six months
      ended June 30, 2000 as compared to the six months ended June 30, 1999. The
      decrease in volumes of gas sold was primarily due to (i) a positive  prior
      period  volume  adjustment  made by the  purchaser on two wells during the
      three months ended June 30, 1999 and (ii) normal  declines in  production.
      Average  oil and gas prices  increased  to $30.49 per barrel and $2.85 per
      Mcf, respectively,  for the six months ended June 30, 2000 from $13.16 per
      barrel and $1.94 per Mcf, respectively,  for the six months ended June 30,
      1999.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes) decreased $13,469 (43.9%) for the six months ended June
      30, 2000 as compared to the six months ended June 30, 1999.  This decrease
      was primarily due to (i) workover expenses incurred on one well during the
      six  months  ended  June 30,  1999 in order to  improve  the  recovery  of
      reserves and (ii) a decrease in lease operating  expenses  associated with
      the  decreases  in  volumes  of oil and gas  sold.  These  decreases  were
      partially offset by a production tax refund received during the six months
      ended June 30, 1999. As a percentage of oil and gas sales,  these expenses
      decreased  to 19.2% for the six months  ended June 30, 2000 from 34.4% for
      the six months ended June 30, 1999. This percentage decrease was primarily
      due to the  increases  in the  average  prices of oil and gas sold and the
      dollar decrease in oil and gas production expenses.



                                      -11-
<PAGE>




      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $2,916  (56.2%)  for the six  months  ended  June  30,  2000 as
      compared  to the six  months  ended  June  30,  1999.  This  decrease  was
      primarily due to (i) the decreases in volumes of oil and gas sold and (ii)
      an increase in the oil and gas prices used in the valuation of reserves at
      June 30, 2000 as compared to June 30, 1999. As a percentage of oil and gas
      sales,  this  expense  decreased to 2.5% for the six months ended June 30,
      2000 from 5.8% for the six months  ended June 30,  1999.  This  percentage
      decrease  was  primarily  due  to the  dollar  decrease  in  depreciation,
      depletion, and amortization.

      General and administrative  expenses decreased $15,374 (39.4%) for the six
      months  ended June 30, 2000 as  compared to the six months  ended June 30,
      1999. This decrease was primarily due to a change in allocation  among the
      Program and other  affiliated  programs of audit fees and indirect general
      and  administrative  expenses  reimbursed  to the  General  Partner.  As a
      percentage of oil and gas sales, these expenses decreased to 26.3% for the
      six months  ended June 30,  2000 from 43.7% for the six months  ended June
      30,  1999.  This  percentage  decrease  was  primarily  due to the  dollar
      decrease in general and administrative expenses.




                                      -12-
<PAGE>



ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
            RISK.

            The Program does not hold any market risk sensitive instruments.




                                      -13-
<PAGE>



                          PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

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
                        June 30,  2000  and for the six  months  ended  June 30,
                        2000, filed herewith.

                        All other exhibits are omitted as inapplicable.

(b)   Reports on Form 8-K.

            None.





                                      -14-
<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  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 authorized.


                              DYCO OIL AND GAS PROGRAM 1981-1 LIMITED
                              PARTNERSHIP

                                    (Registrant)

                                    BY:   DYCO PETROLEUM CORPORATION

                                          General Partner


Date:  August 3, 2000        By:         /s/Dennis R. Neill
                                       -------------------------------
                                              (Signature)
                                              Dennis R. Neill
                                              President


Date:  August 3, 2000        By:         /s/Patrick M. Hall
                                       -------------------------------
                                              (Signature)
                                              Patrick M. Hall
                                              Chief Financial Officer



                                      -15-
<PAGE>



                                INDEX TO EXHIBITS


NUMBER      DESCRIPTION
------      -----------

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 June 30, 2000 and for the
            six months ended June 30, 2000, filed herewith.

            All other exhibits are omitted as inapplicable.