<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
        June 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
                                         June 30,    December 31,
                                           1997         1996
                                        ----------   ------------

CURRENT ASSETS:
  Cash and cash equivalents               $ 94,890      $197,842
  Accrued oil and gas sales                 33,854        55,764
                                          --------      --------
     Total current assets                 $128,744      $253,606

NET OIL AND GAS PROPERTIES, utilizing
  the full cost method                      79,441       116,932

DEFERRED CHARGE                             68,024        68,024
                                          --------      --------
                                          $276,209      $438,562
                                          ========      ========

                   LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable                        $  9,533      $ 11,961
  Gas imbalance payable                     26,912        26,912
                                          --------      --------
     Total current liabilities            $ 36,445      $ 38,873

ACCRUED LIABILITY                          127,351       127,351

PARTNERS' CAPITAL:
  General Partner, issued and
   outstanding, 70 units                     1,123         2,722
  Limited Partners, issued and
   outstanding, 7,000 units                111,290       269,616
                                          --------      --------
     Total Partners' capital              $112,413      $272,338
                                          --------      --------
                                          $276,209      $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 JUNE 30, 1997 AND 1996
                              (Unaudited)


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

REVENUES:
  Oil and gas sales                      $37,249       $64,767
  Interest                                   578         1,576
                                         -------       -------
                                         $37,827       $66,343

COST AND EXPENSES:
  Oil and gas production                 $ 3,603       $18,555
  Depreciation, depletion, and
   amortization of oil and gas
   properties                                236         9,701
  General and administrative (Note 2)     16,220        18,576 
                                         -------       -------
                                         $20,059       $46,832 
                                         -------       -------

NET INCOME                               $17,768       $19,511 
                                         =======       =======
GENERAL PARTNER (1%) - net 
  income                                 $   178       $   195 
                                         =======       =======
LIMITED PARTNERS (99%) - net 
  income                                 $17,590       $19,316 
                                         =======       =======
NET INCOME PER UNIT                      $  2.51       $  2.76 
                                         =======       =======
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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                              (Unaudited)


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

REVENUES:
  Oil and gas sales                     $117,524      $151,571
  Interest                                 2,442         2,438
                                        --------      --------
                                        $119,966      $154,009

COST AND EXPENSES:
  Oil and gas production                $ 44,651      $ 36,931
  Depreciation, depletion, and
   amortization of oil and gas
   properties                             14,287        21,130
  General and administrative (Note 2)     44,203        40,909 
                                        --------      --------
                                        $103,141      $ 98,970 
                                        --------      --------

NET INCOME                              $ 16,825      $ 55,039 
                                        ========      ========
GENERAL PARTNER (1%) - net 
  income                                $    168      $    550 
                                        ========      ========
LIMITED PARTNERS (99%) - net 
  income                                $ 16,657      $ 54,489 
                                        ========      ========
NET INCOME PER UNIT                     $   2.38      $   7.78 
                                        ========      ========
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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                              (Unaudited)

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

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                             $ 16,825     $ 55,039 
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation, depletion, and 
     amortization of oil and gas
     properties                            14,287       21,130
   (Increase) decrease in accrued oil 
     and gas sales                         21,910    (   9,250)
   Decrease in accounts payable         (   2,428)   (   1,492)
                                         --------     -------- 
   Net cash provided by operating
     activities                          $ 50,594     $ 65,427
                                         --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale of oil and
   gas properties                        $ 24,289     $ 62,932 
  Additions to oil and gas properties   (   1,085)   (  17,084)
                                         --------      -------
   Net cash provided by investing 
     activities                          $ 23,204     $ 45,848 
                                         --------     --------

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                      ($102,952)    $111,275

CASH AND CASH EQUIVALENTS AT 
  BEGINNING OF PERIOD                     197,842       86,202 
                                         --------     --------
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                          $ 94,890     $197,477
                                         ========     ========

               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
                             JUNE 30, 1997
                              (Unaudited)


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

     The balance sheet as  of June 30, 1997, statements  of operations
     for the  three and six months  ended June 30, 1997  and 1996, and
     statements of  cash flows for the six  months ended June 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 June 30, 1997,  results of operations  for the three
     and  six months ended June 30, 1997  and 1996 and changes in cash
     flows for the  six months ended June 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 June 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  June 30, 1997 and  1996 such expenses  totaled $16,220 and
     $18,576,  respectively, of  which $12,513  was paid  quarterly to
     Dyco  and its affiliates.   During the six  months ended June 30,
     1997  and  1996  such   expenses  totaled  $44,203  and  $40,909,
     respectively, of which $25,026  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

                                  -8-
<PAGE>
<PAGE>
     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 JUNE 30, 1997 AS COMPARED TO THE THREE MONTHS
     ENDED JUNE 30, 1996.

                                      Three months ended June 30,
                                      ---------------------------
                                         1997             1996
                                        -------          -------
      Oil and gas sales                 $37,249          $64,767
      Oil and gas production expenses   $ 3,603          $18,555
      Barrels produced                       44               52
      Mcf produced                       18,637           31,938
      Average price/Bbl                 $ 17.16          $ 20.10
      Average price/Mcf                 $  1.82          $  2.00

     As shown in  the table above, total  oil and gas sales  decreased
     $27,518  (42.5%)  for the  three months  ended  June 30,  1997 as
     compared to  the  three months  ended  June 30,  1996.   Of  this
     decrease,  approximately $27,000  was  related to  a decrease  in
     volumes of gas  sold.  Volumes  of oil and  gas sold decreased  8
     barrels and 13,301 Mcf, respectively,  for the three months ended
     June  30, 1997 as  compared to  the three  months ended  June 30,
     1996.  The decrease in the 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  gas producing
     wells during  1996 and the second  quarter of 1997.   Average oil
     and gas prices decreased to $17.16 per  barrel and $1.82 per Mcf,
     respectively, for  the  three months  ended  June 30,  1997  from
     $20.10  per barrel and $2.00 per Mcf, respectively, for the three
     months ended June 30, 1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and production taxes)  decreased $14,952 (80.6%) for the
     three months ended June 30, 1997 as compared to the  three months
     ended June 30, 1996.  This decrease resulted primarily from (i) a
     decrease in production taxes associated with the decrease  in oil
     and gas sales discussed above, (ii)  a decrease in volumes of gas
     sold during the three  months ended June 30, 1997 as  compared to
     the three months ended June 30, 1996, (iii) recompletion expenses
     incurred on one well during the three months ended June 30,  1996
     in  order to improve the  recovery of reserves,  and (iv) credits
     received  from  the  operator  on  two  wells  for  prior  period
     marketing deductions during the three months ended June 30, 1997.
     As a percentage of oil and gas sales, these expenses decreased to
     9.7% for the three months ended  June 30, 1997 from 28.6% for the
     three months ended June  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  $9,465 (97.6%)  for the three  months ended
     June  30, 1997  as compared  to the three  months ended  June 30,
     1996.  This decrease  resulted primarily from (i) an  increase in
     the gas price used in the valuation of reserves at June 30, 1997,
     (ii) a decrease  in volumes of gas  sold during the three  months
     ended June  30, 1997 as  compared to the three  months ended June
     30, 1996, and (iii) a decrease in oil and gas properties  subject
     to amortization due to the sale of two wells discussed above.  As
     a percentage of oil and gas sales, this expense decreased to 0.6%
     for the three months ended June 30, 1997 from 15.0% for the three
     months  ended  June  30,  1996.    This  percentage decrease  was
     primarily due to the  dollar decrease in depreciation, depletion,
     and amortization discussed above.
 
     General and administrative expenses decreased $2,356 (12.7%)  for
     the three months  ended June 30,  1997 as  compared to the  three
     months  ended June  30, 1996.   This decrease  resulted primarily
     from  a decrease  in professional  fees during  the three  months
     ended June  30, 1997 as compared  to the three  months ended June
     30, 1996.   As a percentage of oil and  gas sales, these expenses
     increased to 43.5% for the three  months ended June 30, 1997 from
     28.7% for the three months ended June 30,  1996.  This percentage
     increase was  primarily due to the decrease  in oil and gas sales
     discussed above.  


     SIX MONTHS ENDED  JUNE 30,  1997 AS  COMPARED TO  THE SIX  MONTHS
     ENDED JUNE 30, 1996.

                                        Six months ended June 30,
                                        -------------------------
                                          1997            1996
                                        --------        --------
      Oil and gas sales                 $117,524        $151,571
      Oil and gas production expenses   $ 44,651        $ 36,931
      Barrels produced                       103             138
      Mcf produced                        48,199          78,104
      Average price/Bbl                 $  20.08        $  18.24
      Average price/Mcf                 $   2.34        $   1.91
 
     As shown  in the table above,  total oil and  gas sales decreased
     $34,047  (22.5%)  for  the six  months  ended  June  30, 1997  as
     compared  to  the six  months  ended  June  30,  1996.   Of  this
     decrease, approximately  $57,000 was related to a decrease in the
     volumes  of  gas  sold,  partially   offset  by  an  increase  of
     approximately $21,000 related to an increase in the average price
     of gas  sold.  Volumes of  oil and gas sold  decreased 35 barrels
     and 29,905 Mcf, respectively,  for the six months ended  June 30,
     1997  as compared  to the six  months ended  June 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 gas  producing wells during
     1996 and the second quarter of  1997.  Average oil and gas prices
     increased to $20.08  per barrel and $2.34  per Mcf, respectively,
     for the six months ended June 30, 1997 from $18.24 per barrel and
     $1.91  per Mcf, respectively, for  the six months  ended June 30,
     1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and  production taxes) increased $7,720  (20.9%) for the
     six months  ended June 30,  1997 as  compared to  the six  months

                                 -10-
<PAGE>
<PAGE>
     ended  June  30, 1996.    This increase  resulted  primarily from
     workover  expenses incurred  on  one well  during the  six months
     ended June 30, 1997 in order to improve the recovery of reserves,
     partially offset by (i) a decrease  in volumes of gas sold during
     the six months ended June 30,  1997 as compared to the six months
     ended  June  30, 1996  and (ii)  a  decrease in  production taxes
     associated  with  the decrease  in  oil and  gas  sales discussed
     above.   As a  percentage of  oil and gas  sales, these  expenses
     increased to 38.0% for  the six months ended  June 30, 1997  from
     24.4% for  the six months ended  June 30, 1996.   This percentage
     increase  was primarily  due to  the workover  expenses discussed
     above.

     Depreciation,  depletion,   and  amortization  of  oil   and  gas
     properties decreased $6,843 (32.4%) for the six months ended June
     30, 1997 as compared to the six months ended June 30, 1996.  This
     decrease resulted primarily from a decrease in volumes of oil and
     gas sold during the six months ended June 30, 1997 as compared to
     the six  months ended June 30, 1996.  As  a percentage of oil and
     gas sales, this expense remained relatively constant at 12.2% for
     the six months ended June  30, 1997 as compared to 13.9%  for the
     six months ended June 30, 1996.

     General and administrative  expenses increased $3,294  (8.1%) for
     the six months ended June 30, 1997 as compared to  the six months
     ended  June 30, 1996.   This increase resulted  primarily from an
     increase in  both  professional fees  and miscellaneous  expenses
     during the six months ended June 30, 1997 as compared  to the six
     months  ended June  30, 1996.   As  a percentage  of oil  and gas
     sales, these expenses increased to 37.6% for the six months ended
     June 30, 1997 from 27.0% for the six months ended  June 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 June 30,  1997 and for
                    the  six  months   ended  June  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:  August 7, 1997        By:        /s/Dennis R. Neill
                                 --------------------------------
                                        (Signature)
                                        Dennis R. Neill
                                        President



Date:  August 7, 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 June
          30, 1997 and for the  six months ended June 30, 1997,  filed
          herewith.

          All other exhibits are omitted as inapplicable.

                                 -14-
<PAGE>