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, 2001                                  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

                                                 June 30,      December 31,
                                                   2001            2000
                                                ----------     ------------

CURRENT ASSETS:
   Cash and cash equivalents                      $35,941         $ 86,891
   Accrued oil and gas sales                       36,671           50,242
                                                  -------         --------
      Total current assets                        $72,612         $137,133

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                            20,737           28,872

DEFERRED CHARGE                                       413              413
                                                  -------         --------
                                                  $93,762         $166,418
                                                  =======         ========

                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                               $ 2,037         $  2,543
                                                  -------         --------
      Total current liabilities                   $ 2,037         $  2,543

ACCRUED LIABILITY                                 $38,087         $ 38,087

PARTNERS' CAPITAL:
   General Partner, 70 general
      partner units                               $   535         $  1,256
   Limited Partners, issued and
      outstanding, 7,000 Units                     53,103          124,532
                                                  -------         --------
      Total Partners' capital                     $53,638         $125,788
                                                  -------         --------
                                                  $93,762         $166,418
                                                  =======         ========







            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 JUNE 30, 2001 AND 2000
                                   (Unaudited)

                                                  2001              2000
                                                --------          --------

REVENUES:
   Oil and gas sales                             $50,472           $47,780
   Interest                                        1,662             1,607
                                                 -------           -------
                                                 $52,134           $49,387

COSTS AND EXPENSES:
   Oil and gas production                        $ 7,691           $ 6,970
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   2,057               528
   General and administrative
      (Note 2)                                     8,171             8,021
                                                 -------           -------
                                                 $17,919           $15,519
                                                 -------           -------

NET INCOME                                       $34,215           $33,868
                                                 =======           =======
GENERAL PARTNER (1%) - net income                $   342           $   339
                                                 =======           =======
LIMITED PARTNERS (99%) - net income              $33,873           $33,529
                                                 =======           =======
NET INCOME PER UNIT                              $  4.83           $  4.79
                                                 =======           =======
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 SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (Unaudited)

                                                  2001              2000
                                                --------          --------

REVENUES:
   Oil and gas sales                            $155,796           $89,795
   Interest                                        3,073             2,839
                                                --------           -------
                                                $158,869           $92,634

COSTS AND EXPENSES:
   Oil and gas production                       $ 24,281           $17,212
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   4,012             2,275
   General and administrative
      (Note 2)                                    25,976            23,651
                                                --------           -------
                                                $ 54,269           $43,138
                                                --------           -------

NET INCOME                                      $104,600           $49,496
                                                ========           =======
GENERAL PARTNER (1%) - net income               $  1,046           $   495
                                                ========           =======
LIMITED PARTNERS (99%) - net income             $103,554           $49,001
                                                ========           =======
NET INCOME PER UNIT                             $  14.79           $  7.00
                                                ========           =======
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 SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (Unaudited)


                                                    2001            2000
                                                  --------        --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                     $104,600        $ 49,496
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                   4,012           2,275
      (Increase) decrease in accrued
        oil and gas sales                           13,571       (   7,141)
      Decrease in accounts payable               (     506)      (     108)
                                                  --------        --------
   Net cash provided by operating
      activities                                  $121,677        $ 44,522
                                                  --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil and
      gas properties                              $  4,123        $     44
                                                  --------        --------
   Net cash provided by investing
      activities                                  $  4,123        $     44
                                                  --------        --------

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                              ($ 50,950)       $ 44,566

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                              86,891          88,532
                                                  --------        --------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                  $ 35,941        $133,098
                                                  ========        ========






            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
                                  JUNE 30, 2001
                                   (Unaudited)


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

      The balance sheet as of June 30, 2001,  statements  of operations  for the
      three and six months ended June 30, 2001 and 2000,  and statements of cash
      flows for the six months  ended June 30, 2001 and 2000 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,  2001,  results of  operations  for the three and six
      months ended June 30, 2001 and 2000, and changes in cash flows for the six
      months ended June 30, 2001 and 2000 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, 2000. The results of operations for the period
      ended June 30, 2001 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 June 30, 2001 and 2000,  the
      Program incurred such expenses  totaling $8,171 and $8,021,  respectively,
      of which  $6,441 was paid each period to Dyco and its  affiliates.  During
      the six months  ended June 30, 2001 and 2000,  the Program  incurred  such
      expenses totaling $25,976 and $23,651,  respectively, of which $12,882 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>



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.   Gas  prices  in  late  2000  and  early  2001  were
      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. In the last few months spot gas prices have  generally  declined
      month to month.  It is not possible to accurately  predict  future pricing
      direction.



                                      -9-
<PAGE>




      THREE MONTHS  ENDED JUNE 30, 2001  COMPARED TO THE THREE MONTHS ENDED JUNE
      30, 2000.

                                                 Three Months Ended June 30,
                                                 ---------------------------
                                                   2001              2000
                                                  -------           -------
      Oil and gas sales                           $50,472           $47,780
      Oil and gas production expenses             $ 7,691           $ 6,970
      Barrels produced                                 39                16
      Mcf produced                                 11,324            14,171
      Average price/Bbl                           $ 27.21           $ 24.25
      Average price/Mcf                           $  4.36           $  3.34

      As shown in the table  above,  total oil and gas  sales  increased  $2,692
      (5.6%) for the three  months  ended June 30, 2001 as compared to the three
      months ended June 30, 2000. Of this  increase,  approximately  $12,000 was
      related to an increase in the average price of gas sold. This increase was
      partially  offset by a  decrease  of  approximately  $10,000  related to a
      decrease in volumes of gas sold. Volumes of oil sold increased 23 barrels,
      while volumes of gas sold  decreased  2,847 Mcf for the three months ended
      June 30, 2001 as compared to the three  months  ended June 30,  2000.  The
      decrease in volumes of gas sold was  primarily due to (i) the receipt of a
      reduced percentage of sales on one well during the three months ended June
      30, 2001 due to gas balancing and (ii) normal  declines in production.  As
      of the date of this Quarterly Report, Management expects the gas balancing
      adjustment to continue for the forseeable  future,  thereby  continuing to
      contribute to a decrease in volumes of gas  produced.  Average oil and gas
      prices increased to $27.21 per barrel and $4.36 per Mcf, respectively, for
      the three  months ended June 30, 2001 from $24.25 per barrel and $3.34 per
      Mcf, respectively, for the three months ended June 30, 2000.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes)  increased $721 (10.3%) for the three months ended June
      30,  2001 as  compared  to the three  months  ended  June 30,  2000.  This
      increase was primarily due to a production tax refund  received during the
      three months ended June 30, 2000.  This increase was  partially  offset by
      (i) the sale of one well  during  late 2000 and (ii) a  decrease  in lease
      operating expenses associated with the decrease in volumes of gas sold. As
      a percentage of oil and gas sales,  these expenses  increased to 15.2% for
      the three months ended June 30, 2001 from 14.6% for the three months ended
      June 30, 2000.




                                      -10-
<PAGE>




      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      increased  $1,528  (289.6%)  for the three  months  ended June 30, 2001 as
      compared  to the three  months  ended June 30,  2000.  This  increase  was
      primarily  due to a  decrease  in the gas price used in the  valuation  of
      reserves at June 30, 2001 as compared to June 30, 2000. As a percentage of
      oil and gas sales,  this  expense  increased  to 4.1% for the three months
      ended June 30, 2001 from 1.1% for the three  months  ended June 30,  2000.
      This  percentage  increase  was  primarily  due to the dollar  increase in
      depreciation, depletion, and amortization.

      General and  administrative  expenses  increased $150 (1.9%) for the three
      months  ended June 30, 2001 as compared to the three months ended June 30,
      2000. As a percentage of oil and gas sales,  these  expenses  decreased to
      16.2% for the three  months  ended June 30,  2001 from 16.8% for the three
      months ended June 30, 2000.

      SIX MONTHS  ENDED JUNE 30, 2001  COMPARED TO THE SIX MONTHS ENDED JUNE 30,
      2000.

                                                  Six Months Ended June 30,
                                                  -------------------------
                                                    2001             2000
                                                  --------          -------
      Oil and gas sales                           $155,796          $89,795
      Oil and gas production expenses             $ 24,281          $17,212
      Barrels produced                                  68               45
      Mcf produced                                  26,216           31,057
      Average price/Bbl                           $  27.88          $ 30.49
      Average price/Mcf                           $   5.87          $  2.85

      As shown in the table  above,  total oil and gas sales  increased  $66,001
      (73.5%)  for the six months  ended June 30,  2001 as  compared  to the six
      months ended June 30, 2000. Of this  increase,  approximately  $79,000 was
      related to an increase in the average price of gas sold. This increase was
      partially  offset by a  decrease  of  approximately  $14,000  related to a
      decrease in volumes of gas sold. Volumes of oil sold increased 23 barrels,
      while  volumes of gas sold  decreased  4,841 Mcf for the six months  ended
      June 30,  2001 as  compared  to the six months  ended June 30,  2000.  The
      decrease in volumes of gas sold was  primarily due to (i) the receipt of a
      reduced  percentage  of sales on one well during the six months ended June
      30, 2001 due to gas balancing and (ii) normal  declines in production.  As
      of the date of this Quarterly Report, Management expects the gas balancing
      adjustment to continue for the forseeable  future,  thereby  continuing to
      contribute  to a decrease in volumes of gas  produced.  Average oil prices
      decreased to $27.88 per barrel for the six months ended June 30, 2001 from
      $30.49 per barrel for the six months ended June 30, 2000. Average gas



                                      -11-
<PAGE>



      prices  increased  to $5.87 per Mcf for the six months ended June 30, 2001
      from $2.85 per Mcf for the six months ended June 30, 2000.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes)  increased $7,069 (41.1%) for the six months ended June
      30, 2001 as compared to the six months ended June 30, 2000.  This increase
      was primarily due to (i) an increase in production  taxes  associated with
      the  increase  in oil and gas  sales,  (ii) the  settlement  of a  royalty
      dispute on one well during the six months ended June 30, 2001, and (iii) a
      production tax refund  received during the six months ended June 30, 2000.
      These  increases were partially  offset by the (i) sale of one well during
      late 2000 and (ii) a decrease in lease operating expenses  associated with
      the decrease in volumes of gas sold. As a percentage of oil and gas sales,
      these  expenses  decreased to 15.6% for the six months ended June 30, 2001
      from  19.2%  for the six  months  ended  June 30,  2000.  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  $1,737  (76.4%)  for the six  months  ended  June  30,  2001 as
      compared  to the six  months  ended  June  30,  2000.  This  increase  was
      primarily  due to (i) the  increase in the  average  price of gas sold and
      (ii) a decrease in the gas price used in the valuation of reserves at June
      30, 2001 as  compared to June 30,  2000.  As a  percentage  of oil and gas
      sales,  this  expense  increased to 2.6% for the six months ended June 30,
      2001 from 2.5% for the six months ended June 30, 2000.

      General and  administrative  expenses  increased $2,325 (9.8%) for the six
      months  ended June 30, 2001 as  compared to the six months  ended June 30,
      2000. As a percentage of oil and gas sales,  these  expenses  decreased to
      16.7% for the six months ended June 30, 2001 from 26.3% for the six months
      ended June 30, 2000.  This  percentage  decrease was  primarily due to the
      increase in oil and gas sales.




                                      -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

            None.

(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:  August 8, 2001        By:         /s/Dennis R. Neill
                                       -------------------------------
                                              (Signature)
                                              Dennis R. Neill
                                              President


Date:  August 8, 2001        By:         /s/Patrick M. Hall
                                       -------------------------------
                                              (Signature)
                                              Patrick M. Hall
                                              Chief Financial Officer


                                      -15-