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                  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
        March 31, 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      
                             ----      ----
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                    PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

                                ASSETS
                                        March 31,    December 31,
                                          1997          1996
                                       -----------   ------------

CURRENT ASSETS:
  Cash and cash equivalents               $ 52,844      $197,842
  Accrued oil and gas sales                 38,154        55,764
                                          --------      --------
     Total current assets                 $ 90,998      $253,606

NET OIL AND GAS PROPERTIES, utilizing
  the full cost method                     103,945       116,932

DEFERRED CHARGE                             68,024        68,024
                                          --------      --------
                                          $262,967      $438,562
                                          ========      ========

                   LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable                        $ 14,059      $ 11,961
  Gas imbalance payable                     26,912        26,912
                                          --------      --------
     Total current liabilities            $ 40,971      $ 38,873

ACCRUED LIABILITY                          127,351       127,351

PARTNERS' CAPITAL:
  General Partner, issued and
   outstanding, 70 units                       946         2,722
  Limited Partners, issued and
   outstanding, 7,000 units                 93,699       269,616
                                          --------      --------
     Total Partners' capital              $ 94,645      $272,338
                                          --------      --------
                                          $262,967      $438,562
                                          ========      ========

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

                                  -2-
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          DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                       STATEMENTS OF OPERATIONS
          FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                              (Unaudited)


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

REVENUES:
  Oil and gas sales                      $80,275       $86,804
  Interest                                 1,864           862
                                         -------       -------
                                         $82,139       $87,666

COST AND EXPENSES:
  Oil and gas production                 $41,048       $18,376
  Depreciation, depletion, and
   amortization of oil and gas
   properties                             14,051        11,429
  General and administrative (Note 2)     27,983        22,333
                                         -------       -------
                                         $83,082       $52,138 
                                         -------       -------

NET INCOME (LOSS)                       ($   943)      $35,528 
                                         =======       =======
GENERAL PARTNER (1%) - net 
  income (loss)                         ($     9)      $   355 
                                         =======       =======
LIMITED PARTNERS (99%) - net 
  income (loss)                         ($   934)      $35,173 
                                         =======       =======
NET INCOME (LOSS) PER UNIT              ($   .13)      $  5.03 
                                         =======       =======
UNITS OUTSTANDING                          7,070         7,070
                                         =======       =======

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

                                  -3-
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          DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                       STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                              (Unaudited)

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

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                     ($    943)    $ 35,528 
  Adjustments to reconcile net income
   (loss) to net cash provided by 
   operating activities:
   Depreciation, depletion, and 
     amortization of oil and gas
     properties                            14,051       11,429
   (Increase) decrease in accrued oil 
     and gas sales                         17,610    (   7,987)
   Increase (decrease) in accounts
     payable                                2,098    (   1,084)
                                         --------     -------- 
   Net cash provided by operating
     activities                          $ 32,816     $ 37,886
                                         --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale of oil and
   gas properties                        $    -       $ 61,974 
  Additions to oil and gas properties   (   1,064)   (   7,348)
                                         --------     --------
   Net cash provided (used) by  
     investing activities               ($  1,064)    $ 54,626 
                                         --------     --------

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                      ($144,998)    $ 92,512

CASH AND CASH EQUIVALENTS AT 
  BEGINNING OF PERIOD                     197,842       86,202 
                                         --------     --------
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                          $ 52,844     $178,714
                                         ========     ========

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

                                  -4-
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          DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                CONDENSED NOTES TO FINANCIAL STATEMENTS
                            MARCH 31, 1997
                              (Unaudited)


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

     The  balance sheet as of March 31, 1997, statements of operations
     for  the  three  months  ended  March  31,  1997  and  1996,  and
     statements of cash  flows for  the three months  ended March  31,
     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 March 31,  1997, results of operations for  the three
     months ended  March 31, 1997 and  1996 and changes  in cash flows
     for the  three months  ended March  31, 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 March 31, 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.

                                  -5-
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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 March 31, 1997  and 1996 such expenses totaled  $27,983 and
     $22,333, respectively, of which $12,513 was  paid each quarter 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.

                                  -6-
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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

                                  -7-
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     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 MARCH 31, 1997 AS COMPARED TO THE THREE MONTHS
     ENDED MARCH 31, 1996.

                                      Three months ended March 31,
                                      ----------------------------
                                         1997             1996
                                        -------          -------
      Oil and gas sales                 $80,275          $86,804
      Oil and gas production expenses   $41,048          $18,376
      Barrels produced                       59               86
      Mcf produced                       29,562           46,166
      Average price/Bbl                 $ 22.25          $ 17.12
      Average price/Mcf                 $  2.67          $  1.85
 
     As shown in  the table above, total  oil and gas sales  decreased
     $6,529  (7.5%) for  the  three months  ended  March 31,  1997  as
     compared  to the  three months  ended  March 31,  1996.   Of this
     decrease,  approximately $31,000  was  related to  a decrease  in
     volumes  of  gas   sold,  partially  offset  by  an  increase  of
     approximately $24,000 related to an increase in the average price
     of gas  sold.  Volumes of  oil and gas sold  decreased 27 barrels
     and 16,604 Mcf,  respectively, for the  three months ended  March
     31,  1997 as compared to  the three months  ended March 31, 1996.
     The decrease in volumes  of gas sold resulted primarily  from (i)
     normal declines in production on several  wells due to diminished
     gas reserves and (ii)  the sale of one gas producing  well during
     1996.  Average oil and gas prices increased to  $22.25 per barrel
     and $2.67 per Mcf, respectively, for the three months ended March
     31,  1997 from $17.12 per barrel and $1.85 per Mcf, respectively,
     for the three months ended March 31, 1996.  

     Oil  and  gas  production  expenses  (including  lease  operating
     expenses and production taxes) increased $22,672 (123.4%) for the
     three months ended March 31, 1997 as compared to the three months
     ended  March 31,  1996.   This  increase resulted  primarily from
     workover  expenses incurred on  one well during  the three months
     ended  March 31,  1997  in  order  to  improve  the  recovery  of
     reserves, partially offset by decreases in volumes of oil and gas
     sold during the three months ended March 31, 1997 as compared  to
     the three  months ended March 31,  1996.  As a  percentage of oil
     and  gas sales, these expenses  increased to 51.1%  for the three
     months ended March 31, 1997 from 21.2% for the three months ended
     March  31, 1996.  This  percentage increase was  primarily due to
     the dollar increase in production expenses discussed above.

     Depreciation,  depletion,   and  amortization  of  oil   and  gas
     properties increased  $2,622 (22.9%)  for the three  months ended
     March 31, 1997  as compared to the  three months ended March  31,
     1996.   This increase resulted  primarily from a  decrease in the

                                  -8-
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     gas price used  in the valuation  of reserves at March  31, 1997,
     partially  offset by  decreases in  volumes of  oil and  gas sold
     during the three months ended March  31, 1997 as compared to  the
     three months  ended March 31, 1996.   As a percentage  of oil and
     gas sales, this expense  increased to 17.5% for the  three months
     ended March 31, 1997 from 13.2% for the three  months ended March
     31,  1996.   This percentage  increase was  primarily due  to the
     dollar  increase  in  depreciation, depletion,  and  amortization
     discussed  above, partially  offset by  increases in  the average
     prices of  oil and gas sold  during the three months  ended March
     31, 1997 as compared to the three months ended March 31, 1996.  

     General and administrative expenses increased $5,650  (25.3%) for
     the three months  ended March 31, 1997  as compared to  the three
     months  ended March 31,  1996.  This  increase resulted primarily
     from  an increase  in professional fees  during the  three months
     ended March 31, 1997 as compared to the three  months ended March
     31, 1996.  As a  percentage of oil and gas sales,  these expenses
     increased to 34.9% for the three months ended March 31, 1997 from
     25.7% for the three months ended March 31, 1996.  This percentage
     increase was primarily  due to the decrease in oil  and gas sales
     discussed above.  

                                  -9-
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                      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  Dyco Oil
                    and  Gas  Program  1981-1   Limited  Partnership's
                    financial statements as of  March 31, 1997 and for
                    the  three months  ended  March  31,  1997,  filed
                    herewith.

                    All other exhibits are omitted as inapplicable.

     (b)  Reports on Form 8-K for the first quarter of 1997.

          Date of event:                January 24, 1997
          Date filed with SEC:          January 24, 1997
          Item Included:
               Item 5 - Other Events

                                 -10-
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                              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:  May 6, 1997           By:        /s/Dennis R. Neill
                                 --------------------------------
                                        (Signature)
                                        Dennis R. Neill
                                        President



Date:  May 6, 1997           By:        /s/Patrick M. Hall
                                 --------------------------------
                                        (Signature)
                                        Patrick M. Hall
                                        Chief Financial Officer

                                 -11-
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                           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
          March  31, 1997  and for  the three  months ended  March 31,
          1997, filed herewith.

          All other exhibits are omitted as inapplicable.

                                 -11-
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