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
  March 31, 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

                                          March 31,   December 31,
                                            2000          1999
                                         ----------   ------------

CURRENT ASSETS:
   Cash and cash equivalents               $107,937      $ 88,532
   Accrued oil and gas sales                 26,970        27,008
                                           --------      --------
     Total current assets                  $134,907      $115,540

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                      33,443        35,194
                                           --------      --------
                                           $168,350      $150,734
                                           ========      ========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                        $  2,523      $  2,535
   Payable to General Partner (Note 2)        2,000             -
   Gas imbalance payable                     17,787        17,787
                                           --------      --------
     Total current liabilities             $ 22,310      $ 20,322

ACCRUED LIABILITY                          $ 56,362      $ 56,362

PARTNERS' CAPITAL:
   General Partner, 70 general
     partner units                         $    895      $    739
   Limited Partners, issued and
     outstanding, 7,000 Units                88,783        73,311
                                           --------      --------
     Total Partners' capital               $ 89,678      $ 74,050
                                           --------      --------
                                           $168,350      $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 MARCH 31, 2000 AND 1999
                                   (Unaudited)

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

REVENUES:
   Oil and gas sales                       $42,015        $26,821
   Interest                                  1,232            309
                                           -------        -------
                                           $43,247        $27,130

COSTS AND EXPENSES:
   Oil and gas production                  $10,242        $20,397
   Depreciation, depletion, and
     amortization of oil and gas
     properties                              1,747          2,634
   General and administrative
     (Note 2)                               15,630         25,588
                                           -------        -------
                                           $27,619        $48,619
                                           -------        -------

NET INCOME (LOSS)                          $15,628       ($21,489)
                                           =======        =======
GENERAL PARTNER (1%) - net
   income (loss)                           $   156       ($   215)
                                           =======        =======
LIMITED PARTNERS (99%) - net
   income (loss)                           $15,472       ($21,274)
                                           =======        =======
NET INCOME (LOSS) PER UNIT                 $  2.21       ($  3.04)
                                           =======        =======
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 CASH FLOWS
              FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                                   (Unaudited)


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

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                     $ 15,628        ($21,489)
   Adjustments to reconcile net income
     (loss) to net cash provided (used)
     by operating activities:
     Depreciation, depletion, and
       amortization of oil and gas
       properties                           1,747           2,634
     Decrease in accrued oil and gas
       sales                                   38          10,236
     Increase (decrease) in accounts
       payable                          (      12)            118
     Increase in payable to General
       Partner                              2,000               -
                                         --------         -------
   Net cash provided (used) by
     operating activities                $ 19,401        ($ 8,501)
                                         --------         -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil and
     gas properties                      $      4         $     -
   Additions to oil and gas
     properties                                 -        (  2,876)
                                         --------         -------
   Net cash provided (used) by
     investing activities                $      4        ($ 2,876)
                                         --------         -------

CASH FLOWS FROM FINANCING ACTIVITIES:

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

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                      $ 19,405        ($11,377)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                     88,532          31,207
                                         --------         -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                         $107,937         $19,830
                                         ========         =======


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




                                      -4-
<PAGE>



              DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                    CONDENSED NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (Unaudited)


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

      The balance sheet as of March 31, 2000,  statements of operations  for the
      three months ended March 31, 2000 and 1999,  and  statements of cash flows
      for the three months  ended March 31, 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 March 31, 2000,  results of operations for the three months ended March
      31, 2000 and 1999,  and changes in cash flows for the three  months  ended
      March 31, 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 March 31, 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




                                      -5-
<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 March 31, 2000 and 1999 the
      Program incurred such expenses totaling $15,630 and $25,588, respectively,
      of which  $6,441 and $12,513,  respectively,  was 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.

      The  payable to General  Partner at March 31, 2000  represents  audit fees
      paid by the  General  Partner on behalf of the  Program.  This  amount was
      reimbursed to the General Partner in April 2000.






                                      -6-
<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.




                                      -7-
<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 low
      prices in 1998.

      THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE MONTHS ENDED MARCH
      31, 1999.

                                      Three Months Ended March 31,
                                      ----------------------------
                                            2000            1999
                                           -------         -------
      Oil and gas sales                    $42,015         $26,821
      Oil and gas production expenses      $10,242         $20,397
      Barrels produced                          29              26
      Mcf produced                          16,886          17,043
      Average price/Bbl                    $ 33.93         $ 11.65
      Average price/Mcf                    $  2.43         $  1.56




                                      -8-
<PAGE>





      As shown in the table  above,  total oil and gas sales  increased  $15,194
      (56.6%) for the three months ended March 31, 2000 as compared to the three
      months ended March 31, 1999. Of this increase,  approximately  $15,000 was
      related to an increase in the  average  price of gas sold.  Volumes of oil
      sold increased 3 barrels,  while volumes of gas sold decreased 157 Mcf for
      the three  months  ended March 31,  2000 as  compared to the three  months
      ended March 31, 1999.  Average oil and gas prices  increased to $33.93 per
      barrel and $2.43 per Mcf,  respectively,  for the three months ended March
      31, 2000 from $11.65 per barrel and $1.56 per Mcf,  respectively,  for the
      three months ended March 31, 1999.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes)  decreased  $10,155  (49.8%) for the three months ended
      March 31, 2000 as compared to the three months ended March 31, 1999.  This
      decrease  was  primarily  due to  workover  expenses  incurred on one well
      during the three  months  ended  March 31,  1999 in order to  improve  the
      recovery of reserves. As a percentage of oil and gas sales, these expenses
      decreased  to 24.4% for the three  months  ended March 31, 2000 from 76.0%
      for the three months ended March 31, 1999.  This  percentage  decrease was
      primarily due to the dollar  decrease in oil and gas  production  expenses
      and the increases in the average prices of oil and gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $887  (33.7%)  for the three  months  ended  March 31,  2000 as
      compared to the three  months  ended March 31,  1999.  This  decrease  was
      primarily  due to an  increase in the gas price used in the  valuation  of
      reserves at March 31, 2000 as compared to March 31, 1999.  As a percentage
      of oil and gas sales,  this expense decreased to 4.2% for the three months
      ended March 31, 2000 from 9.8% for the three  months ended March 31, 1999.
      This percentage decrease was primarily due to the increases in the average
      prices  of oil and gas  sold  and the  dollar  decrease  in  depreciation,
      depletion, and amortization.

      General and administrative expenses decreased $9,958 (38.9%) for the three
      months  ended March 31, 2000 as compared to the three  months  ended March
      31, 1999.  This  decrease was primarily due to decreases in 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
      37.2% for the three  months  ended March 31, 2000 from 95.4% for the three
      months ended March 31, 1999. This percentage decrease was primarily due to
      the  dollar  decrease  in  general  and  administrative  expenses  and the
      increase in oil and gas sales.





                                      -9-
<PAGE>





YEAR 2000 COMPUTER ISSUES
-------------------------

      The year  2000  issue  refers  to the  inability  of  computer  and  other
      information   technology   systems  to  properly  process  date  and  time
      information,  stemming from the earlier programming  practice of using two
      digits  rather than four to represent the year in a date. To the knowledge
      of the  General  Partner,  the Program has not  experienced  any  material
      effects from the year 2000 issue.  Costs  incurred by the Program in order
      to ensure year 2000 compatibility were not material to the Program.






                                      -10-
<PAGE>




ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK.

           The Program does not hold any market risk sensitive instruments.





                                      -11-
<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
                     March 31,  2000 and for the three  months  ended  March 31,
                     2000, filed herewith.

                     All other exhibits are omitted as inapplicable.

(b)   Reports on Form 8-K.

           None.






                                      -12-
<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:  May 4, 2000             By:        /s/Dennis R. Neill
                                  -------------------------------
                                        (Signature)
                                        Dennis R. Neill
                                        President


Date:  May 4, 2000             By:        /s/Patrick M. Hall
                                  -------------------------------
                                        (Signature)
                                        Patrick M. Hall
                                        Chief Financial Officer




                                      -13-
<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 March 31, 2000 and for the
           three months ended March 31, 2000, filed herewith.

           All other exhibits are omitted as inapplicable.




                                      -14-