<PAGE> 1
		   SECURITIES AND EXCHANGE COMMISSION
			Washington, D.C. 20549
			 ____________________

x            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
		     THE SECURITIES EXCHANGE ACT OF 1934

	       For the fiscal year ended December 31, 1996

				   OR

	    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
		    THE SECURITIES EXCHANGE ACT OF 1934

		     For the transition period from     to
			Commission File Number 33-14843

				_________________

	  RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2        
      (Exact name of registrant as specified in its charter)

				   NEW YORK
	(State or other jurisdiction of incorporation or organization)

				  36-6878768
		 (I.R.S. Employer Identification Number)

	       2201 Cooperative Way, Herndon, VA 20171-3025
		 (Address of principal executive offices)
    (Registrant's telephone number, including area code, is 703-709-6700)

			      ___________________

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

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
					      
The Registrant has no common or voting stock.

<PAGE> 2
		  DOCUMENTS INCORPORATED BY REFERENCE:

1.      Form of Trust Agreement
2.      Loan Agreement
3.      Loan Guarantee and Servicing Agreement

Exhibit Index located on page 13.



<PAGE> 3
Part I


Item 3.  Legal Proceedings

	    None.


Item 4.  Submission of Matters to a Vote of Security Holders

	    None.


<PAGE> 4

Part II

Item 5.  Market for the Registrant's Common Equity and Related 
	 Stockholder Matters

     a)     There is no established trading market for the certificates
	    representing ownership of the beneficial interest in the Trust.

     b)     As of March 28, 1997 there was one holder of certificates
	    representing ownership of the beneficial interest in the Trust.


Item 8.  Financial Statements and Supplementary Data

	    See attached audited financial statements.


Item 9.  Disagreements on Accounting and Financial Disclosure

	    None.



Part III

Item 13.    Certain Relationships and Related Transactions

	    None.

<PAGE> 5

Part IV

Item 14.    Exhibits, Financial Statement Schedules and Reports
	    on Form 8-K

      a)    The following documents are filed as part of this report:

	    1.      Financial Statements
		    Report of Independent Public Accountants
		    Statement of Assets and Liabilities as of
			December 31, 1996 and 1995
		    Statement of Income and Expenses, for the Years Ended
			December 31, 1996, 1995 and 1994
		    Statement of Cash Flows, for the Years Ended
			December 31, 1996, 1995 and 1994
		    Notes to Financial Statements

	    2.      Financial Statement Schedules are omitted because they
		    are inapplicable.

	    3.      Exhibits
<TABLE>
		    <S>              <C>
		    Exhibit
		    Number           Description of Exhibit

		     4.1             Form of Trust Agreement, including the form of Rural Electric Cooperative
				     Grantor Trust Certificate (incorporated by reference to Exhibit 4.1 to
				     Registration Statement on Form S-1 [No. 33-14843]).

		    10.1             Loan Agreement (incorporated by reference to Exhibit 10.1 to Registration
				     Statement on Form S-1 [No. 33-14843]).

		    10.2             Loan Guarantee and Servicing Agreement (incorporated by reference to Exhibit
				     10.2 to Registration Statement on Form S-1 [No. 33-14843]).
</TABLE>

      b)    Form 8-K dated December 17, 1996.
	    Semi-annual Report to Certificateholders dated December 15, 1996.

<PAGE> 6

Supplemental information to be furnished with reports filed pursuant to
Section 15(d) of the Act by Registrants which have not registered securities
pursuant to Section 12 of the Act.

      No annual report, proxy statement, form of proxy or other proxy
      soliciting material has been sent to Certificateholders, and the
      Registrant does not presently contemplate sending any such material
      subsequent to the filing of this report.



<PAGE> 7
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of
Fairfax, Commonwealth of Virginia on the 28th day of March, 1997.


	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988 D-2

	    By:  NATIONAL RURAL UTILITIES COOPERATIVE
		 FINANCE CORPORATION as Servicer

		 By: /s/ Sheldon C. Petersen                                              
		     Sheldon C. Petersen, Governor and
			Chief Executive Officer







<PAGE> 8

		   RURAL ELECTRIC COOPERATIVE GRANTOR
			TRUST (DESERET) 1988-D2


	   FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995,
	  AND FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
		     TOGETHER WITH AUDITORS' REPORT



 





















<PAGE> 9


		Report of Independent Public Accountants



To the Trustee of
Rural Electric Cooperative Grantor Trust
	(Deseret) 1988-D2 and

To the Board of Directors of 
National Rural Utilities Cooperative
	Finance Corporation


We have audited the accompanying statements of assets and liabilities of
Rural Electric Cooperative Grantor Trust (Deseret) 1988-D2 as of December 31,
1996 and 1995, and the related statements of income and expenses and cash
flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rural Electric Cooperative
Grantor Trust (Deseret) 1988-D2 as of December 31, 1996 and 1995, and its
operations and its cash flows for the years ended December 31, 1996, 1995 
and 1994, in conformity with generally accepted accounting principles.




March 24, 1997
Washington, D. C.


<PAGE> 10
<TABLE>
<CAPTION>
       RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2

		  STATEMENTS OF ASSETS AND LIABILITIES

		     AS OF DECEMBER 31, 1996 AND 1995

    _____________________________________________________________________



					1996                     1995

<S>                                <C>                       <C>
ASSETS

Interest Receivable                  $1,191,767                $1,191,767

Note Receivable                     152,895,000               152,895,000

     Total Assets                  $154,086,767              $154,086,767





LIABILITIES

Interest Payable-
Grantor Trust Certificates         $  1,159,326              $  1,159,326

Servicer Fees Payable                    32,441                    32,441

Rural Electric Cooperative
  Grantor Trust Certificates        152,895,000               152,895,000

     Total Liabilities             $154,086,767              $154,086,767











</TABLE>
	      The accompanying notes are an integral part
		      of these financial statements


       

<PAGE> 11       
<TABLE>
<CAPTION>
	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2

		   STATEMENTS OF INCOME AND EXPENSES

	   FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

    _____________________________________________________________________



				     1996             1995             1994
<S>                               <C>              <C>              <C>
INCOME:
  Interest on note receivable     $15,890,224      $15,890,224      $15,890,224


EXPENSES:
  Interest on 
  grantor trust certificates       15,457,684       15,457,684       15,457,684
  Servicer fees                       432,540          432,540          432,540

      Total Expenses               15,890,224       15,890,224       15,890,224

      Net Income                  $         -      $         -      $         -





















</TABLE>
		       The accompanying notes are an integral part
			       of these financial statements


<PAGE> 12
<TABLE>
<CAPTION>

	 RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2

			   STATEMENTS OF CASH FLOWS

	   FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

   _____________________________________________________________________

					      1996              1995               1994
<S>                                       <C>                <C>               <C>
CASH FLOWS FROM 
  OPERATING ACTIVITIES:
  Interest received on note receivable    $15,890,224        $15,890,224       $15,890,224
  Interest paid to Certificateholders     (15,457,684)       (15,457,684)      (15,457,684)
  Fees paid to Servicer                   (   432,540)       (   432,540)      (   432,540)

     Net cash provided by 
       operating activities                         -                  -                 -


CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from principal payment on note           -                  -                 -

    Net cash provided from 
     investing activities                           -                  -                 -


CASH FLOWS FROM FINANCING ACTIVITES:
  Principal payment to Certificateholders           -                  -                 -

    Net cash used in financing activities           -                  -                 -

NET CHANGE IN CASH                                  -                  -                 -

CASH, beginning of year                             -                  -                 -

CASH, end of year                         $         -        $         -       $         -

ACCRUAL TO CASH BASIS RECONCILIATION:
  Accrual basis income                    $         -        $         -       $         -
  Change in accrual accounts:
   Decrease in interest receivable                  -                  -                 -    
   Decrease in interest payable                     -                  -                 -
   Decrease in servicer fees payable                -                  -                 - 

     Total change in accrual accounts               -                  -                 -

Net cash provided by 
  operating activities                    $         -        $         -       $         -

</TABLE> 
				 
			 The accompanying notes are an integral part
				of these financial statements


<PAGE> 13

	   RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2

			 NOTES TO FINANCIAL STATEMENTS

		      AS OF DECEMBER 31, 1996, 1995 AND 1994


1.      ORGANIZATION AND OPERATIONS

	Rural Electric Cooperative Grantor Trust (Deseret) 1988-D2 (the 
	"Trust") was formed under a Trust Agreement dated February 15, 1988 
	among National Rural Utilities Cooperative Finance Corporation 
	("CFC"), Deseret Generation & Transmission Co-operative, Inc. 
	(the "Cooperative") and The First National Bank of Chicago 
	(the "Trustee").   On that date, CFC made a loan to the Cooperative 
	which issued a note (the "Note"), evidencing the borrowing to the 
	Trust.  The Trust issued to CFC Rural Electric Cooperative Grantor 
	Trust (Deseret) 10.11% Certificates Due 2017 (the "Certificates") 
	in the amount of $152,895,000.  The Certificates are solely the 
	obligations of the Trust and are not insured or guaranteed by CFC, 
	the Cooperative, the Trustee, the Rural Utilities Service ("RUS") 
	of the United States Department of Agriculture ("USDA") nor any 
	other governmental agency.  Each Certificate represents an undivided 
	fractional interest in the Trust.  CFC is the depositor of the Trust 
	and acts as Servicer of the Note.   CFC filed, on behalf of the 
	Trust, a Registration Statement on Form S-1 (Registration 
	No. 33-14843) which became effective on May 4, 1988, and CFC 
	resold the Certificates thereunder.

	The assets of the Trust consist primarily of the Note, bearing 
	interest at 10.393% and maturing 2017,  which is guaranteed 
	(the "Guarantee") as to timely payment of principal and interest 
	by the United States of America, acting through the Administrator 
	of RUS.  The amounts of principal and interest payments on the Note 
	held by the Trust are sufficient to cover the scheduled principal 
	and interest payments on the Certificates issued by the Trust and 
	the scheduled amounts of servicer fees.  The General Counsel of the 
	USDA has issued an opinion that the Guarantee is supported by the 
	full faith and credit of the United States of America.

	Debt service and servicer fee payments on the Note are made to the 
	Trustee semi-annually (June 4 and December 4) by the Cooperative or 
	RUS guarantor of the Note.  The Trustee deposits all such receipts 
	in the Trust account.  The Trustee is authorized by the Trust 
	Agreement to invest all funds in the Trust account at the direction 
	of CFC in certain eligible investments that mature no later than 
	the business day next preceding the day (June 15 and December 15) 
	such amounts are to be distributed to the Certificateholders 
	and the Servicer.  The interest earned on the investments is 
	distributed to the Cooperative.  Any funds that are not so 
	invested must be held by the Trustee in the Trust account.  
	The Trustee may not reinvest any returns of principal or investment 
	earnings on eligible investments and the Trustee may not sell any 
	eligible investment prior to its maturity except, at the direction 
	of CFC, to preserve the value of the corpus of the Trust.

	On or before five business days after each date on which payments 
	are made on the Certificates, the Trustee is obligated to supply 
	the holders of such Certificates a report provided by the Servicer, 
	which includes certain pertinent information as to how the payment 
	is to be allocated to principal, interest, servicer fees and 
	premium, if any, as well as the principal balance outstanding 
	after such payment.

	The fiscal year of the Trust is the calendar year.  Within the 
	prescribed period of time for tax reporting purposes, after 
	the end of each calendar year during the term of the Trust 
	Agreement, the Trustee is obligated to prepare and mail to 
	each Certificateholder of record for the Trust, at any time 
	during such year, a report setting forth the information as is 
	reasonably necessary for the preparation of such 
	Certificateholder's Federal income tax return.


<PAGE> 14        
	Payments of principal on the Certificates are scheduled to be 
	repaid over a period of fifteen years, beginning in 2003.  
	The principal payment in 2003 is scheduled to be $5,200,000.  
	The Certificates are not subject to redemption prior to December 15, 
	1997.  Thereafter, such Certificates are subject to optional 
	redemption, in whole and with premium until 2006, upon redemption 
	or purchase of the related Note.  The Trust Agreement will 
	terminate after payment in full has been made on the Certificates 
	issued thereunder.  


2.      TAX STATUS OF THE TRUST

	Milbank, Tweed, Hadley & McCloy, counsel to CFC, has advised CFC 
	with respect to the Trust that, in its opinion, (i) the Trust will 
	not be classified as an association taxable as a corporation, but 
	will be classified as a grantor trust and (ii) each Certificateholder 
	will be treated for Federal income tax purposes as the owner of an 
	undivided fractional interest in each of the assets held by the Trust.


	It is expected that the Trust will not have any liability for Federal 
	or State income taxes for the current or future years.


3.      INTEREST AND SERVICER FEE ACCOUNTING

	The Trust records interest income as it is earned and accrues 
	interest expense and servicer fees as they are incurred.  Servicer 
	fees represent ten basis points of the outstanding principal balance 
	of the Certificates and the Note and recognition of conversion fees 
	over the life of the loan.


4.      FAIR VALUE OF FINANCIAL INSTRUMENTS

	Use Of Estimates
	
	The preparation of financial statements in conformity with 
	generally accepted accounting principles requires management 
	to make estimates and assumptions that affect the reported amounts 
	of assets and liabilities at the date of the financial statements 
	and the reported amounts of expenses during the reported period.  
	The estimates involve judgments with respect to, among other 
	things, various future factors with are difficult to predict and 
	are beyond the control of the Company.  With regards to the fair 
	values below, actual amounts could differ from these estimates.

	The following disclosure of the estimated fair value of financial 
	instruments is made in accordance with FASB Statement No. 107, 
	"Disclosure about Fair Value of Financial Instruments."  Whenever 
	possible, the estimated fair value amounts have been determined 
	using quoted market information as of December 31, 1996 and 1995, 
	along with other valuation methodologies which are summarized below.  
	Below is a summary of significant methodologies used in estimating 
	fair value amounts and a schedule of fair values at December 31, 1996 
	and 1995.

	The carrying amounts reported for Interest Receivable, Interest 
	Payable - Grantor Trust Certificates, and Servicer Fees Payable 
	approximate fair values due to the short term maturity of these 
	instruments.            

<PAGE> 15
	Note Receivable

	Fair value is estimated by discounting the future cash flows 
	using the current rates at which similar loans would be made to 
	borrowers with similar credit ratings and for the same remaining 
	maturities.


	Rural Electric Cooperative Grantor Trust Certificates

	The fair value of the Certificate is estimated using quoted market 
	prices for similar notes over the same remaining maturities.

	The carrying and estimated fair values of the Trust's financial 
	instruments as of December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
					      1996                             1995
				  Carrying           Fair            Carrying          Fair    
				    Value            Value             Value           Value                               

<S>                              <C>              <C>
Assets:
Interest Receivable                1,191,767        1,191,767        1,191,767       1,191,767       
Note Receivable                  152,895,000      203,695,422      152,895,000     217,016,169     

Liabilities:
Interest Payable - 
  Grantor Trust Certificates       1,159,326        1,159,326        1,159,326       1,159,326
Servicer Fees Payable                 32,441           32,441           32,441          32,441
Rural Electric Cooperative
  Grantor Trust Certificates     152,895,000      204,856,226      152,895,000     218,567,765


</TABLE>
		








<PAGE> 16
<TABLE>
<CAPTION>
	  RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988 D-2



			      Exhibit Index

<S>             <C>
Exhibit
Number          Description of Exhibit

 4.1            Form of Trust Agreement, including the form of Rural Electric Cooperative
		Grantor Trust Certificate (incorporated by reference to Exhibit 4.1 to Registration
		Statement on Form S-1 [No. 33-14843]).

10.1            Loan Agreement (incorporated by reference to Exhibit 10.1 to Registration Statement on
		Form S-1 [No. 33-14843]).

10.2            Loan Guarantee and Servicing Agreement (incorporated by reference to Exhibit 10.2 to
		Registration Statement on Form S-1 [No. 33-14843]).

  
</TABLE>