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, 2000                                     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
                            ------                    ------




                                      -1-
<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,
                                                  2000             1999
                                             -------------     ------------

CURRENT ASSETS:
   Cash and cash equivalents                     $ 35,720         $ 88,532
   Accrued oil and gas sales                       40,276           27,008
                                                 --------         --------
      Total current assets                       $ 75,996         $115,540

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                            31,336           35,194
                                                 --------         --------
                                                 $107,332         $150,734
                                                 ========         ========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                              $  2,087         $  2,535
   Gas imbalance payable                           17,787           17,787
                                                 --------         --------
      Total current liabilities                  $ 19,874         $ 20,322

ACCRUED LIABILITY                                $ 56,362         $ 56,362

PARTNERS' CAPITAL:
   General Partner, 70 general
      partner units                              $    309         $    739
   Limited Partners, issued and
      outstanding, 7,000 Units                     30,787           73,311
                                                 --------         --------
      Total Partners' capital                    $ 31,096         $ 74,050
                                                 --------         --------
                                                 $107,332         $150,734
                                                 ========         ========



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



                                      -2-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
            FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

                                                  2000              1999
                                                --------          --------

REVENUES:
   Oil and gas sales                             $69,925           $41,238
   Interest                                        1,855               724
                                                 -------           -------
                                                 $71,780           $41,962

COSTS AND EXPENSES:
   Oil and gas production                        $11,275           $11,905
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   1,562               761
   General and administrative
      (Note 2)                                     9,993            14,677
                                                 -------           -------
                                                 $22,830           $27,343
                                                 -------           -------

NET INCOME                                       $48,950           $14,619
                                                 =======           =======
GENERAL PARTNER (1%) - net income                $   489           $   147
                                                 =======           =======
LIMITED PARTNERS (99%) - net income              $48,461           $14,472
                                                 =======           =======
NET INCOME PER UNIT                              $  6.92           $  2.07
                                                 =======           =======
UNITS OUTSTANDING                                  7,070             7,070
                                                 =======           =======




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



                                      -3-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

                                                  2000              1999
                                                --------          --------

REVENUES:
   Oil and gas sales                            $159,720          $130,473
   Interest                                        4,694             1,328
                                                --------          --------
                                                $164,414          $131,801

COSTS AND EXPENSES:
   Oil and gas production                       $ 28,487          $ 42,586
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   3,837             5,952
   General and administrative
      (Note 2)                                    33,644            53,702
                                                --------          --------
                                                $ 65,968          $102,240
                                                --------          --------

NET INCOME                                      $ 98,446          $ 29,561
                                                ========          ========
GENERAL PARTNER (1%) - net income               $    984          $    296
                                                ========          ========
LIMITED PARTNERS (99%) - net income             $ 97,462          $ 29,265
                                                ========          ========
NET INCOME PER UNIT                             $  13.92          $   4.18
                                                ========          ========
UNITS OUTSTANDING                                  7,070             7,070
                                                ========          ========





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



                                      -4-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)


                                                    2000            1999
                                                  --------        --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                     $ 98,446         $29,561
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                   3,837           5,952
      Decrease in accrued oil and gas
        sales                                    (  13,268)       (  2,467)
      Increase (decrease) in accounts
        payable                                  (     448)              3
                                                  --------         -------
   Net cash provided by operating
      activities                                  $ 88,567         $33,049
                                                  --------         -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil and
      gas properties                              $     21         $10,269
                                                  --------         -------
   Net cash provided by investing
      activities                                  $     21         $10,269
                                                  --------         -------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                            ($141,400)        $     -
                                                  --------         -------
   Net cash used by financing
      activities                                 ($141,400)        $     -
                                                  --------         -------

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                              ($ 52,812)        $43,318

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                              88,532          31,207
                                                  --------         -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                  $ 35,720         $74,525
                                                  ========         =======





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


                                      -5-
<PAGE>



             DYCO OIL AND GAS PROGRAM 1981-1 LIMITED PARTNERSHIP
                   CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                                   (Unaudited)


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

      The balance sheet as of September 30, 2000,  statements of operations  for
      the  three  and  nine  months  ended  September  30,  2000 and  1999,  and
      statements of cash flows for the nine months ended  September 30, 2000 and
      1999  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, 2000,  results of
      operations  for the three and nine  months  ended  September  30, 2000 and
      1999,  and changes in cash flows for the nine months ended  September  30,
      2000 and 1999 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, 1999. The results of operations for the period
      ended September 30, 2000 are not necessarily  indicative of the results to
      be expected for the full year.


      OIL AND GAS PROPERTIES
      ----------------------

      Oil and gas  operations  are  accounted  for using the full cost method of
      accounting.  All productive and  non-productive  costs associated with the
      acquisition,  exploration  and  development  of oil and gas  reserves  are
      capitalized.  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




                                      -6-
<PAGE>




      properties are accounted for as  adjustments of capitalized  costs with no
      gain or loss recognized, unless such adjustments would significantly alter
      the  relationship  between  capitalized  costs  and  proved  oil  and  gas
      reserves.

      The provision for depreciation, depletion, and amortization of oil and gas
      properties is calculated by dividing the oil and gas sales dollars  during
      the  period by the  estimated  future  gross  income  from the oil and gas
      properties and applying the resulting  rate to the net remaining  costs of
      oil and gas properties that have been  capitalized,  plus estimated future
      development costs.


2.    TRANSACTIONS WITH RELATED PARTIES
      ---------------------------------

      Under the terms of the Program's partnership  agreement,  Dyco is entitled
      to  receive a  reimbursement  for all  direct  expenses  and  general  and
      administrative, geological and engineering expenses it incurs on behalf of
      the Program. During the three months ended September 30, 2000 and 1999 the
      Program incurred such expenses totaling $9,993 and $14,677,  respectively,
      of which $6,441 and $12,513,  respectively,  were paid each period to Dyco
      and its  affiliates.  During the nine months ended  September 30, 2000 and
      1999 the Program  incurred  such  expenses  totaling  $33,644 and $53,702,
      respectively, of which $19,323 and $37,539,  respectively,  were paid each
      period to Dyco and its affiliates.

      Affiliates of the Program  operate  certain of the  Program's  properties.
      Their  policy is to bill the  Program for all  customary  charges and cost
      reimbursements associated with these activities.






                                      -7-
<PAGE>



ITEM 2.     MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
            RESULTS OF OPERATIONS


USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
-----------------------------------------------

      This Quarterly Report contains  certain  forward-looking  statements.  The
      words "anticipate",  "believe",  "expect",  "plan", "intend",  "estimate",
      "project", "could", "may" and similar expressions are intended to identify
      forward-looking  statements.  Such statements reflect management's current
      views  with  respect  to future  events and  financial  performance.  This
      Quarterly Report also includes certain information,  which is, or is based
      upon,  estimates  and  assumptions.  Such  estimates and  assumptions  are
      management's  efforts to accurately reflect the condition and operation of
      the Program.

      Use of  forward-looking  statements and estimates and assumptions  involve
      risks  and  uncertainties  which  include,  but are not  limited  to,  the
      volatility of oil and gas prices, the uncertainty of reserve  information,
      the operating risk associated  with oil and gas properties  (including the
      risk of personal injury,  death,  property  damage,  damage to the well or
      producing  reservoir,  environmental  contamination,  and other  operating
      risks), the prospect of changing tax and regulatory laws, the availability
      and capacity of  processing  and  transportation  facilities,  the general
      economic climate,  the supply and price of foreign imports of oil and gas,
      the level of consumer  product demand,  and the price and  availability of
      alternative  fuels.  Should  one or more of these  risks or  uncertainties
      occur or should  estimates  or  underlying  assumptions  prove  incorrect,
      actual  conditions or results may vary materially and adversely from those
      stated, anticipated, believed, estimated, and otherwise indicated.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

      Net  proceeds  from the  Program's  operations  less  necessary  operating
      capital  are  distributed  to  investors  on a  quarterly  basis.  The net
      proceeds from production are not reinvested in productive  assets,  except
      to the extent  that  producing  wells are  improved  or where  methods are
      employed to permit more efficient recovery of the Program's reserves which
      would result in a positive economic impact.




                                      -8-
<PAGE>




      The Program's  available capital from  subscriptions has been spent on oil
      and gas  drilling  activities.  There  should not be any further  material
      capital  resource  commitments  in the  future.  The  Program  has no debt
      commitments.  Management  believes  that  cash  for  ordinary  operational
      purposes will be provided by current oil and gas production.


RESULTS OF OPERATIONS
---------------------

      GENERAL DISCUSSION

      The following  general  discussion  should be read in conjunction with the
      analysis  of results of  operations  provided  below.  The most  important
      variables affecting the Program's revenues are the prices received for the
      sale of oil and gas and the volumes of oil and gas produced. The Program's
      production is mainly natural gas, so such pricing and volumes are the most
      significant factors.

      Due to the volatility of oil and gas prices,  forecasting future prices is
      subject to great  uncertainty  and  inaccuracy.  Substantially  all of the
      Program's gas reserves are being sold on the "spot market".  Prices on the
      spot market are subject to wide seasonal and regional pricing fluctuations
      due to the highly competitive nature of the spot market.  Such spot market
      sales are  generally  short-term  in  nature  and are  dependent  upon the
      obtaining of transportation services provided by pipelines. It is likewise
      difficult  to  predict  production  volumes.  However,  oil  and  gas  are
      depleting  assets,  so it can be  expected  that  production  levels  will
      decline over time. Recent gas prices have been  significantly  higher than
      the  Program's  historical  average.  This is  attributable  to the higher
      prices for crude oil,  a  substitute  fuel in some  markets,  and  reduced
      production due to lower capital investments in 1998 and 1999.

      THREE MONTHS ENDED  SEPTEMBER  30, 2000 COMPARED TO THE THREE MONTHS ENDED
      SEPTEMBER 30, 1999.

                                             Three Months Ended September 30,
                                             --------------------------------
                                                   2000              1999
                                                  -------           -------
      Oil and gas sales                           $69,925           $41,238
      Oil and gas production expenses             $11,275           $11,905
      Barrels produced                                 40                 -
      Mcf produced                                 16,613            16,948
      Average price/Bbl                           $ 27.75           $     -
      Average price/Mcf                           $  4.14           $  2.43




                                      -9-
<PAGE>



      As shown in the table  above,  total oil and gas sales  increased  $28,687
      (69.6%) for the three months ended  September  30, 2000 as compared to the
      three months ended  September  30, 1999. Of this  increase,  approximately
      $28,000  was  related to an  increase  in the  average  price of gas sold.
      Volumes  of oil sold  increased  40  barrels,  while  volumes  of gas sold
      decreased  335  Mcf for the  three  months  ended  September  30,  2000 as
      compared to the three months  ended  September  30, 1999.  The average oil
      price was $27.75 per barrel for the three months ended September 30, 2000.
      Average gas prices  increased  to $4.14 per Mcf for the three months ended
      September 30, 2000 from $2.43 per Mcf for the three months ended September
      30, 1999.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes)  decreased  $630  (5.3%)  for the  three  months  ended
      September  30, 2000 as compared to the three  months ended  September  30,
      1999. As a percentage of oil and gas sales,  these  expenses  decreased to
      16.1% for the three  months  ended  September  30, 2000 from 28.9% for the
      three  months  ended  September  30, 1999.  This  percentage  decrease was
      primarily due to the increase in the average price of gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      increased  $801 (105.3%) for the three months ended  September 30, 2000 as
      compared to the three months ended  September 30, 1999.  This increase was
      primarily due to the decreased dollar amount of  depreciation,  depletion,
      and  amortization  charged during the third quarter of 1999 which resulted
      from a  significant  increase  in the gas price used in the  valuation  of
      remaining  reserves at September 30, 1999 as compared to June 30, 1999. As
      a percentage of oil and gas sales,  this expense increased to 2.2% for the
      three months ended September 30, 2000 from 1.8% for the three months ended
      September  30, 1999.  This  percentage  increase was  primarily due to the
      dollar increase in depreciation, depletion, and amortization.

      General and administrative expenses decreased $4,684 (31.9%) for the three
      months  ended  September  30, 2000 as compared to the three  months  ended
      September  30,  1999.  This  decrease  was  primarily  due to a change  in
      allocation  among the  Program and other  affiliated  programs of indirect
      general and administrative  expenses reimbursed to the General Partner. As
      a percentage of oil and gas sales,  these expenses  decreased to 14.3% for
      the three months ended  September 30, 2000 from 35.6% for the three months
      ended September 30, 1999.  This  percentage  decrease was primarily due to
      the  increase in oil and gas sales and the dollar  decrease in general and
      administrative expenses.





                                      -10-
<PAGE>




      NINE MONTHS  ENDED  SEPTEMBER  30, 2000  COMPARED TO THE NINE MONTHS ENDED
      SEPTEMBER 30, 1999.

                                              Nine Months Ended September 30,
                                              -------------------------------
                                                   2000              1999
                                                 --------          --------
      Oil and gas sales                          $159,720          $130,473
      Oil and gas production expenses            $ 28,487          $ 42,586
      Barrels produced                                 85                57
      Mcf produced                                 47,670            62,668
      Average price/Bbl                          $  29.20          $  14.65
      Average price/Mcf                          $   3.30          $   2.07

      As shown in the table  above,  total oil and gas sales  increased  $29,247
      (22.4%) for the nine months  ended  September  30, 2000 as compared to the
      nine months ended  September  30, 1999.  Of this  increase,  approximately
      $59,000 was related to an increase in the average price of gas sold, which
      increase  was  partially  offset by a decrease  of  approximately  $31,000
      related  to a  decrease  in  volumes  of gas  sold.  Volumes  of oil  sold
      increased 28 barrels,  while volumes of gas sold decreased  14,998 Mcf for
      the nine months  ended  September  30, 2000 as compared to the nine months
      ended  September  30,  1999.  The  decrease  in  volumes  of gas  sold was
      primarily due to (i) a positive prior period volume adjustment made by the
      purchaser on one well during the nine months ended  September 30, 1999 and
      (ii) normal declines in production.  Average oil and gas prices  increased
      to $29.20 per barrel and $3.30 per Mcf, respectively,  for the nine months
      ended  September  30,  2000  from  $14.65  per  barrel  and $2.07 per Mcf,
      respectively, for the nine months ended September 30, 1999.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes)  decreased  $14,099  (33.1%) for the nine months  ended
      September  30, 2000 as compared to the nine  months  ended  September  30,
      1999. This decrease was primarily due to (i) workover expenses incurred on
      one well  during the nine  months  ended  September  30,  1999 in order to
      improve the  recovery  of  reserves,  (ii) a decrease  in lease  operating
      expenses  associated with the decrease in volumes of gas sold, and (iii) a
      production tax refund  received during the nine months ended September 30,
      2000.  These  decreases were  partially  offset by a production tax refund
      received  during the nine months ended September 30, 1999. As a percentage
      of oil and gas  sales,  these  expenses  decreased  to 17.8%  for the nine
      months  ended  September  30,  2000 from 32.6% for the nine  months  ended
      September  30, 1999.  This  percentage  decrease was  primarily due to the
      increases  in the  average  prices  of oil and  gas  sold  and the  dollar
      decrease in oil and gas production expenses.




                                      -11-
<PAGE>




      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $2,115 (35.5%) for the nine months ended  September 30, 2000 as
      compared to the nine months ended  September  30, 1999.  This decrease was
      primarily  due to (i) the  decrease  in  volumes  of gas  sold and (ii) an
      increase in the gas price used in the  valuation of remaining  reserves at
      September  30, 2000 as compared to September  30, 1999. As a percentage of
      oil and gas sales,  this  expense  decreased  to 2.4% for the nine  months
      ended September 30, 2000 from 4.6% for the nine months ended September 30,
      1999. This  percentage  decrease was primarily due to the increases in the
      average   prices  of  oil  and  gas  sold  and  the  dollar   decrease  in
      depreciation, depletion, and amortization.

      General and administrative expenses decreased $20,058 (37.4%) for the nine
      months  ended  September  30, 2000 as  compared  to the nine months  ended
      September  30,  1999.  This  decrease  was  primarily  due to a change  in
      allocation among the Program and other  affiliated  programs of audit fees
      and indirect general and administrative expenses reimbursed to the General
      Partner. As a percentage of oil and gas sales, these expenses decreased to
      21.1% for the nine months ended September 30, 2000 from 41.2% for the nine
      months ended September 30, 1999.  This  percentage  decrease was primarily
      due to the  increase  in oil and gas  sales  and the  dollar  decrease  in
      general and administrative expenses.





                                      -12-
<PAGE>



ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
            RISK.

            The Program does not hold any market risk sensitive instruments.




                                      -13-
<PAGE>



                          PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      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,  2000  and  for  the  nine  months  ended
                        September 30, 2000, filed herewith.

                        All other exhibits are omitted as inapplicable.

(b)   Reports on Form 8-K.

            None.





                                      -14-
<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                    DYCO OIL AND GAS PROGRAM 1981-1 LIMITED
                                    PARTNERSHIP

                                    (Registrant)

                                    BY:   DYCO PETROLEUM CORPORATION

                                          General Partner


Date:  November 8, 2000             By:         /s/Dennis R. Neill
                                       -------------------------------
                                              (Signature)
                                              Dennis R. Neill
                                              President


Date:  November 8, 2000             By:         /s/Patrick M. Hall
                                       -------------------------------
                                              (Signature)
                                              Patrick M. Hall
                                              Chief Financial Officer



                                      -15-
<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, 2000 and for
            the nine months ended September 30, 2000, filed herewith.

            All other exhibits are omitted as inapplicable.



                                      -16-