<PAGE>


                  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
      September 30, 1997                      0-10478


                    DYCO OIL AND GAS PROGRAM 1981-2
                        (A LIMITED PARTNERSHIP)
        (Exact Name of Registrant as specified in its charter)



            Minnesota                       41-1411952  
   (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      
                              ----     ----
<PAGE>
<PAGE>
                    PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

          DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                            BALANCE SHEETS
                              (Unaudited)

                                ASSETS
                                       September 30,  December 31,
                                           1997          1996
                                       -------------  ------------

CURRENT ASSETS: 
  Cash and cash equivalents               $ 60,865       $272,066
  Accrued oil and gas sales                 69,027        116,046
                                          --------       --------
     Total current assets                 $129,892       $388,112

NET OIL AND GAS PROPERTIES, utilizing
  the full cost method                     120,485        155,188

DEFERRED CHARGE                             43,273         43,273
                                          --------       --------
                                          $293,650       $586,573
                                          ========       ========

                   LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable                        $ 10,223       $  9,896
                                          --------       --------
     Total current liabilities            $ 10,223       $  9,896

ACCRUED LIABILITY                          123,973        123,973

PARTNERS' CAPITAL:
  General Partner, issued and
   outstanding, 74 units                     1,595          4,527
  Limited Partners, issued and
   outstanding, 6,000 units                157,859        448,177
                                          --------       --------
     Total Partners' capital              $159,454       $452,704
                                          --------       --------
                                          $293,650       $586,573
                                          ========       ========

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

                                  -2-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                       STATEMENTS OF OPERATIONS
        FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                              (Unaudited)


                                           1997         1996
                                         --------     --------

REVENUES:
  Oil and gas sales                       $90,081     $107,314
  Interest                                  2,185        3,506
                                          -------     --------
                                          $92,266     $110,820

COST AND EXPENSES:
  Oil and gas production                  $46,970     $ 31,652
  Depreciation, depletion, and
   amortization of oil and gas
   properties                               5,672       12,045
  General and administrative (Note 2)      15,207       14,344
                                          -------     --------
                                          $67,849     $ 58,041
                                          -------     --------

NET INCOME                                $24,417     $ 52,779 
                                          =======     ========
GENERAL PARTNER (1%) - net        
  income                                  $   244     $    528 
                                          =======     ========
LIMITED PARTNERS (99%) - net
  income                                  $24,173     $ 52,251 
                                          =======     ========
NET INCOME PER UNIT                       $ 12.14     $   8.69
                                          =======     ========
UNITS OUTSTANDING                           6,074        6,074
                                          =======     ========

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

                                  -3-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                       STATEMENTS OF OPERATIONS
         FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                              (Unaudited)


                                           1997         1996
                                         --------     --------

REVENUES:
  Oil and gas sales                      $363,090     $270,897
  Interest                                  6,378        9,219
                                         --------     --------
                                         $369,468     $280,116

COST AND EXPENSES:
  Oil and gas production                 $117,263     $ 83,454 
  Depreciation, depletion, and
   amortization of oil and gas
   properties                              34,221       29,676
  General and administrative (Note 2)      55,684       52,064
                                         --------     --------
                                         $207,168     $165,194
                                         --------     --------

NET INCOME                               $162,300     $114,922 
                                         ========     ========
GENERAL PARTNER (1%) - net        
  income                                 $  1,623     $  1,149 
                                         ========     ========
LIMITED PARTNERS (99%) - net
  income                                 $160,677     $113,773 
                                         ========     ========
NET INCOME PER UNIT                      $  26.72     $  18.92 
                                         ========     ========
UNITS OUTSTANDING                           6,074        6,074
                                         ========     ========

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

                                  -4-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                       STATEMENTS OF CASH FLOWS
         FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                              (Unaudited)

                                           1997         1996
                                         ---------    ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                             $162,300     $114,922 
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation, depletion, and 
     amortization of oil and gas
     properties                            34,221       29,676
   Decrease in accrued oil and
     gas sales                             47,019       11,293 
   Increase (decrease) in accounts 
     payable                                  327    (   1,947)
                                         --------     -------- 
   Net cash provided by operating        
     activities                          $243,867     $153,944 
                                         --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to oil and gas properties   ($  1,736)   ($ 19,818)
  Proceeds from sale of oil and gas
   properties                               2,218        1,390
                                         --------     --------
   Net cash provided (used) by 
     investing activities                $    482    ($ 18,428)
                                         --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                   ($455,550)    $    -
                                         --------     --------
   Net cash used by financing
     activities                         ($455,550)    $    -
                                         --------     --------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                      ($211,201)    $135,516

CASH AND CASH EQUIVALENTS AT 
  BEGINNING OF PERIOD                     272,066      245,084
                                         --------     --------
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                          $ 60,865     $380,600
                                         ========     ========

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

                                  -5-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                CONDENSED NOTES TO FINANCIAL STATEMENTS
                          SEPTEMBER 30, 1997
                              (Unaudited)


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

     The  balance  sheet  as  of  September 30,  1997,  statements  of
     operations for the three and nine months ended September 30, 1997
     and 1996, and statements of cash flows for the nine  months ended
     September  30, 1997 and 1996 have been prepared by Dyco Petroleum
     Corporation ("Dyco"), the general partner of the Dyco Oil and Gas
     Program  1981-2  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 September 30,  1997, results of
     operations for the three and nine months ended September 30, 1997
     and 1996  and changes  in cash  flows for  the nine months  ended
     September 30, 1997 and 1996 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, 1996.   The  results  of operations  for the
     period ended September 30, 1997 are not necessarily indicative of
     the results to be expected for the full year.  

     The limited partners' net income  or loss per unit is based  upon
     each $5,000 initial capital contribution.

     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  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.

                                  -6-
<PAGE>
<PAGE>
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 September 30,  1997 and 1996 such  expenses totaled $15,207
     and $14,344, respectively, of which $11,988  was paid each period
     to  Dyco  and  its affiliates.    During  the  nine months  ended
     September 30,  1997 and  1996 such expenses  totaled $55,684  and
     $52,064,  respectively, of which $35,964  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.

                                  -7-
<PAGE>
<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, or 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.

     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  bank debt  commitments.   Cash  for  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  variable affecting the Program's  revenues is the

                                  -8-
<PAGE>
<PAGE>
     prices received  for the sale of oil  and gas.  Predicting future
     prices is very difficult.  Substantially all of the Program's gas
     reserves are being sold in 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.   Management is
     unable  to predict  whether future  oil and  gas prices  will (i)
     stabilize, (ii) increase, or (iii) decrease.

     THREE  MONTHS ENDED SEPTEMBER 30,  1997 AS COMPARED  TO THE THREE
     MONTHS ENDED SEPTEMBER 30, 1996.

                                   Three Months Ended September 30,
                                   --------------------------------
                                          1997             1996
                                         -------         --------
      Oil and gas sales                  $90,081         $107,314
      Oil and gas production expenses    $46,970         $ 31,652
      Barrels produced                       289               85
      Mcf produced                        41,965           54,157
      Average price/Bbl                  $ 17.82         $  18.16
      Average price/Mcf                  $  2.02         $   1.95
 
     As shown  in the table above,  total oil and gas  sales decreased
     $17,233  (16.1%) for the three months ended September 30, 1997 as
     compared  to the three months ended  September 30, 1996.  Of this
     decrease,  approximately $24,000  was  related to  a decrease  in
     volumes   of  gas  sold,  partially  offset  by  an  increase  of
     approximately $4,000  related to  an increase  in volumes of  oil
     sold  and approximately  $3,000  related to  an  increase in  the
     average  price of gas  sold.  Volumes  of oil  sold increased 204
     barrels, while volumes of  gas sold decreased 12,192 Mcf  for the
     three  months ended September 30,  1997 as compared  to the three
     months ended September  30, 1996.  The decrease in volumes of gas
     sold resulted primarily from normal declines in production due to
     diminished  gas  reserves  on  one  well.    Average  oil  prices
     decreased to  $17.82  per  barrel  for  the  three  months  ended
     September  30, 1997 from $18.16  per barrel for  the three months
     ended  September 30, 1996.  Average gas prices increased to $2.02
     per Mcf for the  three months ended September 30, 1997 from $1.95
     per Mcf for the three months ended September 30, 1996.

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and production taxes)  increased $15,318 (48.4%) for the
     three  months ended September 30,  1997 as compared  to the three
     months  ended  September  30,   1996.    This  increase  resulted
     primarily from  an increase  in compression expenses  and general
     repairs and maintenance on one well during the three months ended
     September  30,  1997  as  compared  to  the  three  months  ended
     September 30, 1996.  As a percentage of oil and  gas sales, these
     expenses increased  to 52.1% for the three months ended September
     30,  1997 from  29.5% for  the three  months ended  September 30,
     1996.  This percentage  increase was primarily due to  the dollar
     increase in  general repairs  and maintenance  expenses discussed
     above.

     Depreciation,  depletion,  and   amortization  of  oil   and  gas
     properties decreased  $6,373 (52.9%)  for the three  months ended
     September  30,  1997  as  compared  to  the  three  months  ended

                                  -9-
<PAGE>
<PAGE>
     September 30, 1996. This decrease resulted  primarily from (i) an
     increase  in the gas price  used in the  valuation of reserves at
     September 30,  1997 and  (ii) a decrease  in volumes of  gas sold
     during the three months  ended September 30, 1997 as  compared to
     the three months ended September 30, 1996. As a percentage of oil
     and  gas  sales, this  expense decreased  to  6.3% for  the three
     months ended September 30,  1997 from 11.2% for the  three months
     ended September 30, 1996.  This percentage decrease was primarily
     due to the increase in  the average price of gas sold  during the
     three  months ended September 30,  1997 as compared  to the three
     months ended September 30, 1996. 

     General and administrative expenses increased $863 (6.0%) for the
     three  months ended September 30,  1997 as compared  to the three
     months  ended  September  30,   1996.    This  increase  resulted
     primarily from an increase in computer consulting fees during the
     three  months ended September 30,  1997 as compared  to the three
     months ended  September 30, 1996.  As a percentage of oil and gas
     sales, these expenses  increased to  16.9% for  the three  months
     ended  September 30, 1997 from  13.4% for the  three months ended
     September 30, 1996.   This percentage increase was  primarily due
     to the decrease in gas sales discussed above.


     NINE  MONTHS ENDED  SEPTEMBER 30,  1997 AS  COMPARED TO  THE NINE
     MONTHS ENDED SEPTEMBER 30, 1996.

                                    Nine Months Ended September 30,
                                    -------------------------------
                                          1997             1996
                                        --------         --------
      Oil and gas sales                 $363,090         $270,897
      Oil and gas production expenses   $117,263         $ 83,454
      Barrels produced                       945              707
      Mcf produced                       159,534          138,784
      Average price/Bbl                 $  18.57         $  19.62
      Average price/Mcf                 $   2.17         $   1.85

     As shown  in the table  above, total oil and  gas sales increased
     $92,193 (34.0%) for the  nine months ended September 30,  1997 as
     compared to  the nine months ended  September 30, 1996.   Of this
     increase,  approximately $51,000 and  $45,000, respectively, were
     related  to increases  in the  average price  and volumes  of gas
     sold.   Volumes of  oil and  gas sold  increased 238  barrels and
     20,750 Mcf, respectively, for the nine months ended September 30,
     1997 as compared  to the  nine months ended  September 30,  1996.
     The increase in  volumes of  gas sold resulted  primarily from  a
     negative gas  balancing adjustment  made by the  operator on  one
     well  during the nine months  ended September 30,  1996.  Average
     oil prices decreased  to $18.57  per barrel for  the nine  months
     ended  September 30,  1997 from  $19.62 per  barrel for  the nine
     months ended September 30, 1996.  Average gas prices increased to
     $2.17  per Mcf for the nine months  ended September 30, 1997 from
     $1.85 per Mcf for the nine months ended September 30, 1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and production taxes)  increased $33,809 (40.5%) for the
     nine  months ended  September 30,  1997 as  compared to  the nine
     months  ended  September  30,   1996.    This  increase  resulted
     primarily from (i)  an increase in  volumes of  oil and gas  sold
     during  the nine months ended  September 30, 1997  as compared to

                                 -10-
<PAGE>
<PAGE>
     the nine months ended September 30, 1996 and (ii) an  increase in
     general  repairs and maintenance on one well.  As a percentage of
     oil and gas sales, these expenses remained relatively constant at
     32.3% for the nine months ended September 30, 1997 as compared to
     30.8% for the nine months ended September 30, 1996.
 
     Depreciation,  depletion,   and  amortization  of  oil   and  gas
     properties  decreased $1,330  (4.5%)  for the  nine months  ended
     September 30, 1997 as compared to the nine months ended September
     30, 1996.  This  decrease resulted primarily from an  increase in
     the gas price used in the valuation of  reserves at September 30,
     1997, partially offset by the increase in volumes of oil  and gas
     sold  during the nine months ended September 30, 1997 as compared
     to the nine months ended September  30, 1996.  As a percentage of
     oil and gas sales, these expenses  decreased to 7.8% for the nine
     months  ended September 30, 1997  from 11.0% for  the nine months
     ended September 30, 1996.  This percentage decrease was primarily
     due  to  the  dollar  decrease in  depreciation,  depletion,  and
     amortization discussed above.

     General and  administrative expenses increased $3,620  (7.0%) for
     the nine months ended September 30, 1997 as  compared to the nine
     months  ended  September  30,   1996.    This  increase  resulted
     primarily  from increases  in both  computer consulting  fees and
     computer  upgrades, which  increases were  partially offset  by a
     decrease  in  postage  expense   during  the  nine  months  ended
     September 30, 1997 as compared to the nine months ended September
     30,  1996.  As a percentage of  oil and gas sales, these expenses
     decreased to 15.3% for  the nine months ended September  30, 1997
     from 19.2%  for the nine months  ended September 30,  1996.  This
     percentage  decrease was primarily due to the increase in oil and
     gas sales discussed above.  

                                 -11-
<PAGE>
<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 Program's
                    financial  statements as of September 30, 1997 and
                    for  the  nine months  ended  September  30, 1997,
                    filed herewith.

                    All other exhibits are omitted as inapplicable.

     (b)  Reports on Form 8-K

          None.

                                 -12-
<PAGE>
<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 1981-2 LIMITED
                         PARTNERSHIP

                              (Registrant)


                              By:  DYCO PETROLEUM CORPORATION

                                   General Partner




Date:  November 3, 1997      By:        /s/Dennis R. Neill
                                 -----------------------------
                                        (Signature)
                                        Dennis R. Neill
                                        President



Date:  November 3, 1997      By:        /s/Patrick M. Hall
                                 -----------------------------
                                        (Signature)
                                        Patrick M. Hall
                                        Chief Financial Officer

                                 -13-
<PAGE>
<PAGE>
                           INDEX TO EXHIBITS


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

27.1      Financial   Data   Schedule  containing   summary  financial
          information  extracted from  the  Dyco Oil  and Gas  Program
          1981-2  Limited  Partnership's  financial  statements  as of
          September 30, 1997 and  for the nine months  ended September
          30, 1997, filed herewith.

          All other exhibits are omitted as inapplicable.
<PAGE>