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, 2001                                 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
                            ------                    ------




                                      -1-
<PAGE>




                        PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

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

                                     ASSETS

                                                 June 30,      December 31,
                                                   2001            2000
                                                -----------    ------------

CURRENT ASSETS:
   Cash and cash equivalents                      $ 18,275        $128,567
   Accrued oil and gas sales                       125,569         184,787
                                                  --------        --------
      Total current assets                        $143,844        $313,354

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                            272,411         256,599

DEFERRED CHARGE                                     31,375          31,375
                                                  --------        --------
                                                  $447,630        $601,328
                                                  ========        ========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                               $  4,946        $  5,428
                                                  --------        --------
      Total current liabilities                   $  4,946        $  5,428

ACCRUED LIABILITY                                 $ 31,597        $ 31,597

PARTNERS' CAPITAL:
   General Partner, 74 general
      partner units                               $  4,112        $  5,644
   Limited Partners, issued and
      outstanding, 6,000 Units                     406,975         558,659
                                                  --------        --------
      Total Partners' capital                     $411,087        $564,303
                                                  --------        --------
                                                  $447,630        $601,328
                                                  ========        ========







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



                                      -2-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (Unaudited)

                                                   2001             2000
                                                 --------         --------

REVENUES:
   Oil and gas sales                             $201,674         $256,961
   Interest                                         2,274                4
                                                 --------         --------
                                                 $203,948         $256,965

COSTS AND EXPENSES:
   Oil and gas production                        $ 29,225         $ 38,469
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   31,023            9,547
   General and administrative
      (Note 2)                                     12,620           12,472
                                                 --------         --------
                                                 $ 72,868         $ 60,488
                                                 --------         --------

NET INCOME                                       $131,080         $196,477
                                                 ========         ========
GENERAL PARTNER (1%) - net income                $  1,311         $  1,965
                                                 ========         ========
LIMITED PARTNERS (99%) - net income              $129,769         $194,512
                                                 ========         ========
NET INCOME PER UNIT                              $  21.59         $  32.35
                                                 ========         ========
UNITS OUTSTANDING                                   6,074            6,074
                                                 ========         ========




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



                                      -3-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (Unaudited)

                                                   2001             2000
                                                 --------         --------

REVENUES:
   Oil and gas sales                             $569,750         $348,185
   Interest                                         4,711               13
                                                 --------         --------
                                                 $574,461         $348,198

COSTS AND EXPENSES:
   Oil and gas production                        $ 68,551         $ 68,046
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   47,634           19,967
   General and administrative
      (Note 2)                                     34,462           32,397
                                                 --------         --------
                                                 $150,647         $120,410
                                                 --------         --------

NET INCOME                                       $423,814         $227,788
                                                 ========         ========
GENERAL PARTNER (1%) - net income                $  4,238         $  2,278
                                                 ========         ========
LIMITED PARTNERS (99%) - net income              $419,576         $225,510
                                                 ========         ========
NET INCOME PER UNIT                              $  69.78         $  37.50
                                                 ========         ========
UNITS OUTSTANDING                                   6,074            6,074
                                                 ========         ========



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



                                      -4-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (Unaudited)


                                                  2001               2000
                                                --------          ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                   $423,814           $227,788
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                47,634             19,967
      (Increase) decrease in accrued oil
        and gas sales                             59,218          ( 102,551)
      Increase (decrease) in accounts
        payable                                (     482)             2,706
      Decrease in payable to General
        Partner                                        -          (  92,000)
                                                --------           --------
   Net cash provided by operating
      activities                                $530,184           $ 55,910
                                                --------           --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
      and gas properties                        $      -           $  5,074
   Additions to oil and gas
      properties                               (  63,446)         (  59,943)
                                                --------           --------
   Net cash used by investing
      activities                               ($ 63,446)         ($ 54,869)
                                                --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                          ($577,030)          $      -
                                                --------           --------
   Net cash used by financing
      activities                               ($577,030)          $      -
                                                --------           --------

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                            ($110,292)          $  1,041

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                           128,567              4,991
                                                --------           --------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                $ 18,275           $  6,032
                                                ========           ========

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


                                      -5-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-2 LIMITED PARTNERSHIP
                   CONDENSED NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2001
                                   (Unaudited)


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

      The balance sheet as of June 30, 2001,  statements  of operations  for the
      three and six months ended June 30, 2001 and 2000,  and statements of cash
      flows for the six months  ended June 30, 2001 and 2000 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 June 30,  2001,  results of  operations  for the three and six
      months ended June 30, 2001 and 2000, and changes in cash flows for the six
      months ended June 30, 2001 and 2000 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, 2000. The results of operations for the period
      ended June 30, 2001 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.  During the six months ended June 30, 2001,  the Program paid
      recompletion  costs of  approximately  $63,000 on the Jarvis No. 1-10 well
      located in Beckham County,  Oklahoma in which the Program owns an interest
      of 36.82%.  In addition,  during the six months  ended June 30, 2000,  the
      Program  paid  recompletion  costs of $59,943  on the Brown No.  1-14 well
      located in Beckham County,  Oklahoma and the Cisco Federal #3 well located
      in Grand  County,  Utah in which the Program owns  interests of 22.76% and
      22.00%,   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



                                      -6-
<PAGE>



      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.


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, 2001 and 2000,  the
      Program incurred such expenses totaling $12,620 and $12,472, respectively,
      of which $11,016 was paid each period to Dyco and its  affiliates.  During
      the six months  ended June 30, 2001 and 2000,  the Program  incurred  such
      expenses totaling $34,462 and $32,397,  respectively, of which $22,032 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>



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.  The General Partner does not anticipate any
      further material capital  resource  commitments in the future.  During the
      six months ended June 30, 2001,  the Program  paid  recompletion  costs of
      approximately  $63,000  on the  Jarvis  No.  1-10 well  located in Beckham
      County,  Oklahoma  in which the Program  owns an  interest of 36.82%.  The
      recompletion was unsuccessful;  however,  the well is still producing.  In
      addition,  during the six months  ended June 30,  2000,  the Program  paid
      costs of $59,943 for a successful  recompletion of the Brown No. 1-14 well
      located in  Beckham  County,  Oklahoma  and an  unsuccessful  recompletion
      attempt of the Cisco  Federal #3 well  located  in Grand  County,  Utah in
      which the  Program  owns  interests  of 22.76% and  22.00%,  respectively.
      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.   Gas  prices  in  late  2000  and  early  2001  were
      significantly  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. In the last few months spot gas prices have  generally  declined
      month to month.  It is not possible to accurately  predict  future pricing
      direction.



                                      -9-
<PAGE>




      THREE MONTHS  ENDED JUNE 30, 2001  COMPARED TO THE THREE MONTHS ENDED JUNE
      30, 2000.

                                                 Three Months Ended June 30,
                                                 --------------------------
                                                    2001            2000
                                                  --------        --------
      Oil and gas sales                           $201,674        $256,961
      Oil and gas production expenses             $ 29,225        $ 38,469
      Barrels produced                                 220           1,498
      Mcf produced                                  44,055          60,569
      Average price/Bbl                           $  27.23        $  26.85
      Average price/Mcf                           $   4.44        $   3.58

      As shown in the table  above,  total oil and gas sales  decreased  $55,287
      (21.5%) for the three  months ended June 30, 2001 as compared to the three
      months ended June 30, 2000. Of this  decrease,  approximately  $34,000 and
      $59,000, respectively, were related to decreases in volumes of oil and gas
      sold.   These   decreases  were   partially   offset  by  an  increase  of
      approximately  $38,000  related to an increase in the average price of gas
      sold.  Volumes of oil and gas sold decreased 1,278 barrels and 16,514 Mcf,
      respectively,  for the three months ended June 30, 2001 as compared to the
      three months ended June 30, 2000.  The decreases in volumes of oil and gas
      sold were primarily due to a decline in production on one significant well
      following  the  successful  recompletion  of that  well  during  the first
      quarter of 2000. Average oil and gas prices increased to $27.23 per barrel
      and $4.44 per Mcf, respectively,  for the three months ended June 30, 2001
      from  $26.85  per barrel  and $3.58 per Mcf,  respectively,  for the three
      months ended June 30, 2000.

      Oil and gas production  expenses  (including lease operating  expenses and
      production taxes) decreased $9,244 (24.0%) for the three months ended June
      30,  2001 as  compared  to the three  months  ended  June 30,  2000.  This
      decrease was  primarily due to (i) a decrease in  compression  expenses on
      one well  during the three  months  ended June 30, 2001 as compared to the
      three  months  ended June 30, 2000,  (ii) a decrease in  production  taxes
      associated  with the decrease in oil and gas sales,  and (iii) the sale of
      two  wells  during  2000.  As a  percentage  of oil and gas  sales,  these
      expenses  decreased to 14.5% for the three months ended June 30, 2001 from
      15.0% for the three months ended June 30, 2000.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      increased  $21,476  (225.0%)  for the three  months ended June 30, 2001 as
      compared  to the three  months  ended June 30,  2000.  This  increase  was
      primarily  due to (i) a decrease in the gas price used in the valuation of
      reserves  at June  30,  2001 as  compared  to June  30,  2000  and (ii) an
      increase in the depletable oil and gas properties at June



                                      -10-
<PAGE>



      30, 2001 as compared to June 30, 2000 due to  recompletion  costs incurred
      on one well during the three months  ended June 30, 2001.  As a percentage
      of oil and gas sales, this expense increased to 15.4% for the three months
      ended June 30, 2001 from 3.7% for the three  months  ended June 30,  2000.
      This  percentage  increase  was  primarily  due to the dollar  increase in
      depreciation, depletion, and amortization.

      General and  administrative  expenses  increased $148 (1.2%) for the three
      months  ended June 30, 2001 as compared to the three months ended June 30,
      2000. As a percentage of oil and gas sales,  these  expenses  increased to
      6.3% for the  three  months  ended  June 30,  2001 from 4.9% for the three
      months ended June 30, 2000. This percentage  increase was primarily due to
      the decrease in oil and gas sales.

      SIX MONTHS  ENDED JUNE 30, 2001  COMPARED TO THE SIX MONTHS ENDED JUNE 30,
      2000.

                                                  Six Months Ended June 30,
                                                  -------------------------
                                                    2001            2000
                                                  --------        --------
      Oil and gas sales                           $569,750        $348,185
      Oil and gas production expenses             $ 68,551        $ 68,046
      Barrels produced                                 648           1,648
      Mcf produced                                  92,473          97,691
      Average price/Bbl                           $  27.49        $  26.70
      Average price/Mcf                           $   5.97        $   3.11

      As shown in the table above,  total oil and gas sales  increased  $221,565
      (63.6%)  for the six months  ended June 30,  2001 as  compared  to the six
      months ended June 30, 2000. Of this increase,  approximately  $264,000 was
      related to an increase in the average price of gas sold. This increase was
      partially  offset by a  decrease  of  approximately  $27,000  related to a
      decrease  in  volumes of oil sold.  Volumes of oil and gas sold  decreased
      1,000 barrels and 5,218 Mcf,  respectively,  for the six months ended June
      30, 2001 as compared to the six months ended June 30,  2000.  The decrease
      in volumes of oil sold was primarily due to a decline in production on one
      significant well following the successful recompletion of that well during
      the first quarter of 2000.  Average oil and gas prices increased to $27.49
      per barrel and $5.97 per Mcf, respectively,  for the six months ended June
      30, 2001 from $26.70 per barrel and $3.11 per Mcf,  respectively,  for the
      six months ended June 30, 2000.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes) remained  relatively  constant for the six months ended
      June 30,  2001 as  compared  to the six  months  ended June 30,  2000.  An
      increase in production  taxes  associated with the increase in oil and gas
      sales was



                                      -11-
<PAGE>



      substantially  offset by (i) the sale of two wells  during 2000 and (ii) a
      decrease in  compression  expenses on one well during the six months ended
      June 30,  2001 as  compared to the six months  ended June 30,  2000.  As a
      percentage of oil and gas sales, these expenses decreased to 12.0% for the
      six months  ended June 30,  2001 from 19.5% for the six months  ended June
      30, 2000. 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
      increased  $27,667  (138.6%)  for the six months  ended  June 30,  2001 as
      compared  to the six  months  ended  June  30,  2000.  This  increase  was
      primarily due to (i) the increase in oil and gas sales,  (ii) decreases in
      the oil and gas prices used in the  valuation of reserves at June 30, 2001
      as compared to June 30, 2000,  and (iii) an increase in the depletable oil
      and gas  properties  at June 30,  2001 as compared to June 30, 2000 due to
      recompletion  costs  incurred on one well during the six months ended June
      30, 2001. As a percentage of oil and gas sales,  this expense increased to
      8.4% for the six months  ended June 30,  2001 from 5.7% for the six months
      ended June 30, 2000.  This  percentage  increase was  primarily due to the
      dollar increase in depreciation, depletion, and amortization.

      General and  administrative  expenses  increased $2,065 (6.4%) for the six
      months  ended June 30, 2001 as  compared to the six months  ended June 30,
      2000. As a percentage of oil and gas sales,  these  expenses  decreased to
      6.0% for the six months  ended June 30,  2001 from 9.3% for the six months
      ended June 30, 2000.  This  percentage  decrease was  primarily due to the
      increase in oil and gas sales.







                                      -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

            None.

(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 1981-2 LIMITED
                                    PARTNERSHIP

                                    (Registrant)

                                    BY:   DYCO PETROLEUM CORPORATION

                                          General Partner


Date:  August 8, 2001              By:         /s/Dennis R. Neill
                                       -------------------------------
                                              (Signature)
                                              Dennis R. Neill
                                              President


Date:  August 8, 2001              By:         /s/Patrick M. Hall
                                       -------------------------------
                                              (Signature)
                                              Patrick M. Hall
                                              Chief Financial Officer



                                      -15-