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                      0-10442


                    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      
                             ----      ----
<PAGE>
<PAGE>
                    PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

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

CURRENT ASSETS:
  Cash and cash equivalents               $106,610      $197,842
  Accrued oil and gas sales                 23,142        55,764
                                          --------      --------
     Total current assets                 $129,752      $253,606

NET OIL AND GAS PROPERTIES, utilizing
  the full cost method                      75,210       116,932

DEFERRED CHARGE                             68,024        68,024
                                          --------      --------
                                          $272,986      $438,562
                                          ========      ========

                   LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable                        $  4,254      $ 11,961
  Gas imbalance payable                     26,912        26,912
                                          --------      --------
     Total current liabilities            $ 31,166      $ 38,873

ACCRUED LIABILITY                          127,351       127,351

PARTNERS' CAPITAL:
  General Partner, issued and
   outstanding, 70 units                     1,144         2,722
  Limited Partners, issued and
   outstanding, 7,000 units                113,325       269,616
                                          --------      --------
     Total Partners' capital              $114,469      $272,338
                                          --------      --------
                                          $272,986      $438,562
                                          ========      ========

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

                                  -2-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                       STATEMENTS OF OPERATIONS
        FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                              (Unaudited)


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

REVENUES:
  Oil and gas sales                      $29,425       $54,005
  Interest                                 1,058         2,094
                                         -------       -------
                                         $30,483       $56,099

COST AND EXPENSES:
  Oil and gas production                 $ 9,749       $24,805
  Depreciation, depletion, and
   amortization of oil and gas
   properties                              2,430         8,392
  General and administrative (Note 2)     16,248        15,236 
                                         -------       -------
                                         $28,427       $48,433 
                                         -------       -------

NET INCOME                               $ 2,056       $ 7,666 
                                         =======       =======
GENERAL PARTNER (1%) - net 
  income                                 $    21       $    77 
                                         =======       =======
LIMITED PARTNERS (99%) - net 
  income                                 $ 2,035       $ 7,589 
                                         =======       =======
NET INCOME PER UNIT                      $   .29       $  1.08 
                                         =======       =======
UNITS OUTSTANDING                          7,070         7,070
                                         =======       =======

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

                                  -3-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                       STATEMENTS OF OPERATIONS
         FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                              (Unaudited)


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

REVENUES:
  Oil and gas sales                     $146,949      $205,576
  Interest                                 3,500         4,532
                                        --------      --------
                                        $150,449      $210,108

COST AND EXPENSES:
  Oil and gas production                $ 54,400      $ 61,736
  Depreciation, depletion, and
   amortization of oil and gas
   properties                             16,717        29,522
  General and administrative (Note 2)     60,451        56,145 
                                        --------      --------
                                        $131,568      $147,403 
                                        --------      --------

NET INCOME                              $ 18,881      $ 62,705 
                                        ========      ========
GENERAL PARTNER (1%) - net 
  income                                $    189      $    627 
                                        ========      ========
LIMITED PARTNERS (99%) - net 
  income                                $ 18,692      $ 62,078 
                                        ========      ========
NET INCOME PER UNIT                     $   2.67      $   8.87 
                                        ========      ========
UNITS OUTSTANDING                          7,070         7,070
                                        ========      ========

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

                                  -4-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-1 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                             $ 18,881     $ 62,705 
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation, depletion, and 
     amortization of oil and gas
     properties                            16,717       29,522
   Decrease in accrued oil and 
     gas sales                             32,622          321 
   Decrease in accounts payable         (   7,707)   (     354)
                                         --------     -------- 
   Net cash provided by operating
     activities                          $ 60,513     $ 92,194
                                         --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale of oil and
   gas properties                        $ 26,506     $ 63,330 
  Additions to oil and gas properties   (   1,501)   (  22,123)
                                         --------      -------
   Net cash provided by investing 
     activities                          $ 25,005     $ 41,207 
                                         --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash distributions                    ($176,750)    $    -
                                         --------     --------
   Net cash used by financing
     activities                         ($176,750)    $    -
                                         --------     --------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                      ($ 91,232)    $133,401

CASH AND CASH EQUIVALENTS AT 
  BEGINNING OF PERIOD                     197,842       86,202 
                                         --------     --------
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                          $106,610     $219,603
                                         ========     ========

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

                                  -5-
<PAGE>
<PAGE>
          DYCO OIL AND GAS PROGRAM 1981-1 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  1981-1  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 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 $16,248
     and $15,236, respectively, of which $12,513  was paid each period
     to  Dyco  and  its affiliates.    During  the  nine months  ended
     September 30,  1997 and  1996 such expenses  totaled $60,451  and
     $56,145,  respectively, of which $37,539  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

                                  -8-
<PAGE>
<PAGE>
     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
     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                 $29,425          $54,005
      Oil and gas production expenses   $ 9,749          $24,805
      Barrels produced                       55               26
      Mcf produced                       19,082           27,712
      Average price/Bbl                 $ 19.31          $ 21.31
      Average price/Mcf                 $  1.49          $  1.93

     As shown in the  table above, total  oil and gas sales  decreased
     $24,580  (45.5%) for the three months ended September 30, 1997 as
     compared  to the three months ended September  30, 1996.  Of this
     decrease, approximately $17,000 was related  to a decrease in the
     volumes of gas sold and  $8,000 was related to a decrease  in the
     average  price of gas sold.  Volumes  of oil sold increased by 29
     barrels,  while volumes of gas  sold decreased 8,630  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  (i) normal declines  in production
     due to  diminished gas reserves on two wells and (ii) the sale of
     two  other gas  producing  wells.   Average  oil and  gas  prices
     decreased to $19.31  per barrel and $1.49  per Mcf, respectively,
     for the three  months ended  September 30, 1997  from $21.31  per
     barrel and  $1.93 per  Mcf,  respectively, for  the three  months
     ended September 30, 1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and production taxes)  decreased $15,056 (60.7%) for the
     three  months ended September 30,  1997 as compared  to the three
     months  ended  September  30,   1996.    This  decrease  resulted
     primarily  from (i) 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, (ii) workover expenses incurred
     on two wells during  the three months ended September 30, 1996 in
     order to improve  the recovery of reserves and (iii)  the sale of
     two wells.  As a percentage of oil and gas  sales, these expenses
     decreased  to 33.1% for the three months ended September 30, 1997
     from 45.9% for the  three months ended September 30,  1996.  This
     percentage  decrease was primarily due  to the dollar decrease in
     production expenses discussed above.
 
     Depreciation,  depletion,  and  amortization   of  oil  and   gas

                                  -9-
<PAGE>
<PAGE>
     properties  decreased $5,962  (71%)  for the  three months  ended
     September  30,  1997  as  compared  to  the  three  months  ended
     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, (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, and (iii)  a decrease in
     the Program's reserve base due to the sale of two significant gas
     producing properties.  As a percentage of oil and gas sales, this
     expense decreased to  8.3% for the  three months ended  September
     30,  1997 from  15.5% for  the three  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 $1,012  (6.6%) for
     the  three months  ended September  30, 1997  as compared  to the
     three 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  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 55.2% for the three  months ended September
     30,  1997 from  28.2% for  the three  months ended  September 30,
     1996.  This percentage increase was primarily due to the decrease
     in oil and 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                 $146,949        $205,576
      Oil and gas production expenses   $ 54,400        $ 61,736
      Barrels produced                       158             164
      Mcf produced                        67,281         105,816
      Average price/Bbl                 $  19.81        $  18.73
      Average price/Mcf                 $   2.14        $   1.91
 
     As shown  in the table above,  total oil and gas  sales decreased
     $58,627 (28.5%) for the  nine months ended September 30,  1997 as
     compared to the  nine months ended  September 30, 1996.   Of this
     decrease, approximately $74,000 was related to  a decrease in the
     volumes  of  gas  sold,  partially  offset  by  an   increase  of
     approximately $16,000 related to an increase in the average price
     of gas  sold.  Volumes of  gas sold decreased 38,535  Mcf for the
     nine  months ended  September 30,  1997 as  compared to  the nine
     months ended September 30, 1996.  The decrease in the volumes  of
     gas sold resulted primarily from normal declines in production on
     two wells  due to  diminished gas  reserves and  the sale of  two
     other  gas producing wells.  Average oil and gas prices increased
     to $19.81 per  barrel and  $2.14 per Mcf,  respectively, for  the
     nine months ended September  30, 1997 from $18.73 per  barrel and
     $1.91  per Mcf, respectively, for the nine months ended September
     30, 1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and  production taxes) decreased $7,336  (11.9%) for the

                                 -10-
<PAGE>
<PAGE>
     nine  months ended  September 30,  1997 as  compared to  the nine
     months  ended  September  30,   1996.    This  decrease  resulted
     primarily from (i) a decrease in production taxes associated with
     the decrease  in gas sales discussed  above and (ii) the  sale of
     two  wells,  which  decrease  was partially  offset  by  workover
     expenses  on  one  well  incurred  to  improve  the  recovery  of
     reserves.   As a  percentage of oil  and gas sales,  this expense
     increased to 37%  for the  nine months ended  September 30,  1997
     from 30%  for the  nine months  ended September  30, 1996.   This
     increase  was primarily  due to  the workover  expenses discussed
     above.

     Depreciation,   depletion,  and  amortization   of  oil  and  gas
     properties decreased by $12,805 (43.4%) for the nine months ended
     September 30, 1997 as compared to the nine months ended September
     30,  1996.  This decrease  resulted primarily from  a decrease 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,  this expense
     decreased to 11.4% for  the nine months ended September  30, 1997
     from 14.4%  for the nine  months ended September 30,  1996.  This
     percentage decrease  was primarily due  to the  increases in  the
     average prices of oil and  gas sold during the nine  months ended
     September 30, 1997 as compared to the nine months ended September
     30, 1996.

     General  and administrative expenses  increased $4,306 (7.7%) 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
     increased to 41.1% for  the nine months ended September  30, 1997
     from 27.3%  for the nine months  ended September 30, 1996.   This
     percentage  increase was primarily due to the decrease 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 1981-1 LIMITED
                         PARTNERSHIP

                              (Registrant)


                              By:  DYCO PETROLEUM CORPORATION

                              General Partner




Date:  November 4, 1997      By:        /s/Dennis R. Neill
                                 --------------------------------
                                        (Signature)
                                        Dennis R. Neill
                                        President



Date:  November 4, 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
          1981-1  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>