<PAGE>

              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549
                       ____________________

                           FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
           THE SECURITIES EXCHANGE ACT OF 1934

          For the fiscal year ended December 31, 1997

                            OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
               THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from     to
                  Commission File Number 33-14843

                       _________________

	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2
          (Exact name of registrant as specified in its charter)

                                NEW YORK
	(State or other jurisdiction of incorporation or organization)

                               36-6878768
                  (I.R.S. Employer Identification Number)

	2201 Cooperative Way, Herndon, VA 20171-3025
             (Address of principal executive offices)
  (Registrant's telephone number, including area code, is 703-709-6700)

                      ___________________

	Securities Registered pursuant to Section 12(b) of the Act:  None.

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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 Regulation S-K is not contained herein, and will not be contained
to the best of the registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part
IV or this Form 10-K or any amendment to this Form 10-K.

                        Yes   X      No

The Registrant has no common or voting stock.

	DOCUMENTS INCORPORATED BY REFERENCE:

None.



<PAGE>

Part I

Item 3.	Legal Proceedings

			None.


Item 4.	Submission of Matters to a Vote of Security Holders

			None.

<PAGE>

Part II

Item 5.	Market for the Registrant's Common Equity and Related Stockholder
Matters

        a) There is no established trading market for the certificates
           representing ownership of the beneficial interest in the
           Trust.

        b) As of March 31, 1998 there were no record holders of
           certificates representing ownership of the beneficial
           interest in the Trust.


Item 8.	Financial Statements and Supplementary Data

			See attached audited financial statements.


Item 9.	Disagreements on Accounting and Financial Disclosure

			None.


Part III

Item 13.	Certain Relationships and Related Transactions

			None.
<PAGE>

Part IV

Item 14.	Exhibits, Financial Statement Schedules and Reports
			on Form 8-K

	a)	The following documents are filed as part of this report:

			1.
				Exhibit Financial Statements
				Report of Independent Public Accountants
				Statement of Assets and Liabilities as of
                                    December 31, 1997 and 1996
                                Statement of Income and Expenses, for the
                                    Years Ended December 31, 1997, 1996
                                    and 1995
				Statement of Cash Flows, for the Years Ended
                                    December 31, 1997, 1996 and 1995
				Notes to Financial Statements

			2.	Financial Statement Schedules are omitted
                                because they are inapplicable.

			3.	Exhibits


                                Number  Description of Exhibit

                                 4.1    Form of Trust Agreement, including
                                        the form of Rural Electric Cooperative
                                        Grantor Trust Certificate
                                        (incorporated by
                                        reference to Exhibit 4.1 to
                                        Registration Statement on
                                        Form S-1 [No. 33-14843]).

                                10.1    Loan Agreement (incorporated by
                                        reference to Exhibit 10.1 to
                                        Registration Statement on Form S-1
                                        [No. 33-14843]).

                                10.2    Loan Guarantee and Servicing Agreement
                                        (incorporated by reference to Exhibit
                                        10.2 to Registration Statement on
                                        Form S-1 [No. 33-14843]).

                                27      Financial Data Schedule

		b)	Form 8-K dated December 15, 1997.
                        Semi-annual Report to Certificateholders dated
                        December 15, 1997.

Supplemental information to be furnished with reports filed pursuant to
Section 15(d) of the Act by Registrants which have not registered securities
pursuant to Section 12 of the Act.

	No annual report, proxy statement, form of proxy or other proxy
soliciting material has been sent to Certificateholders, and the
Registrant does not presently contemplate sending any such material
subsequent to the filing of this report.

<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
County of Fairfax, Commonwealth of Virginia on the 31st day of
March, 1998.


	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988 D-2

			By:	NATIONAL RURAL UTILITIES COOPERATIVE
				FINANCE CORPORATION as Servicer

                                By:     /s/ Sheldon C. Petersen
					Sheldon C. Petersen, Governor and
					   Chief Executive Officer


<PAGE>
        RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988 D-2



                                Exhibit Index


Exhibit
Number 		Description of Exhibit

 4.1            Form of Trust Agreement, including the form of
                Rural Electric Cooperative Grantor Trust
                Certificate (incorporated by reference to Exhibit
                4.1 to Registration Statement on Form S-1
                [No. 33-14843]).

10.1            Loan Agreement (incorporated by reference to
                Exhibit 10.1 to Registration Statement on Form
                S-1 [No. 33-14843]).

10.2            Loan Guarantee and Servicing Agreement
                (incorporated by reference to Exhibit 10.2 to
                Registration Statement on Form S-1 [No. 33-14843]).

27              Financial Data Schedule




<PAGE>

               RURAL ELECTRIC COOPERATIVE GRANTOR
                     TRUST (DESERET) 1988-D2


      FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996,
     AND FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                 TOGETHER WITH AUDITORS' REPORT


























<PAGE>


             Report of Independent Public Accountants



To the Trustee of
Rural Electric Cooperative Grantor Trust
	(Deseret) 1988-D2, and

To the Board of Directors of
National Rural Utilities Cooperative
	Finance Corporation


We have audited the accompanying statements of assets and liabilities of
Rural Electric Cooperative Grantor Trust (Deseret) 1988-D2 as of December
31, 1997 and 1996, and the related statements of income and expenses and
cash flows for each of the three years in the period ended December 31, 1997.
These financial statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rural Electric
Cooperative Grantor Trust (Deseret) 1988-D2 as of December 31, 1997 and 1996,
and its operations and its cash flows for each of the three years in the
period ended December 31, 1997, 1996 and 1995, in conformity with generally
accepted accounting principles.









/S/ ARTHUR ANDERSEN LLP
March  6, 1998
Washington, D. C.



<PAGE>

          RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2
                   STATEMENTS OF ASSETS AND LIABILITIES
                      AS OF DECEMBER 31, 1997 AND 1996




                                         1997           1996

ASSETS

Interest receivable                $   1,170,794   $   1,191,767

Note receivable                      152,895,000     152,895,000

        Total Assets               $ 154,065,794   $ 154,086,767





LIABILITIES

Interest payable-Grantor Trust     $   1,159,326   $   1,159,326
     Certificates

Servicer fees payable                     11,468          32,441

Rural Electric Cooperative
     Grantor Trust Certificates      152,895,000     152,895,000

        Total Liabilities          $ 154,065,794   $ 154,086,767















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




<PAGE>

        RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2
                    STATEMENTS OF INCOME AND EXPENSES
            FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




	1997	1996	1995

INCOME:
  Interest on note receivable   $ 15,869,251  $ 15,890,224  $ 15,890,224


EXPENSES:
  Interest on
  grantor trust certificates      15,457,684    15,457,684    15,457,684
  Servicer fees                      411,567       432,540       432,540

        Total expenses            15,869,251    15,890,224    15,890,224

        Net income              $          -  $          -  $          -























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

<PAGE>

       RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2
                        STATEMENTS OF CASH FLOWS
          FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




	1997	1996	1995

CASH FLOWS
   FROM OPERATING ACTIVITIES:

  Interest received on note receivable $15,869,251  $15,890,224  $15,890,224
  Interest paid to certificateholders  (15,457,684) (15,457,684) (15,457,684)
  Fees paid to servicer                   (411,567)    (432,540)    (432,540)

   Net cash provided
    by operating activities                      -            -            -


NET CHANGE IN CASH                               -            -            -

CASH, beginning of year                          -            -            -

CASH, end of year                      $         -  $         -  $         -

ACCRUAL TO CASH BASIS
  RECONCILIATION:
  Accrual basis income                 $         -  $         -  $         -
  Change in accrual accounts:
     Decrease in interest receivable        20,973            -               -
     Increase in interest payable                -            -               -
     Decrease in servicer fees payable     (20,973)           -               -

       Total change in accrual accounts          -            -               -

Net cash provided by
 operating activities                  $         -  $         -  $         -

SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:

  Cash paid during the year
  for interest expense                 $15,457,684  $15,457,684  $15,457,684



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




<PAGE>

           RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (DESERET) 1988-D2

                            NOTES TO FINANCIAL STATEMENTS

                      AS OF DECEMBER 31, 1997, 1996 AND 1995


1.	ORGANIZATION AND OPERATIONS

Rural Electric Cooperative Grantor Trust (Deseret) 1988-D2 (the
"Trust") was formed under a Trust Agreement dated February 15,
1988 among National Rural Utilities Cooperative Finance
Corporation ("CFC"), Deseret Generation & Transmission Co-
operative, Inc. (the "Cooperative") and The First National Bank of
Chicago (the "Trustee").   On that date, CFC made a loan to the
Cooperative which issued a note (the "Note"), evidencing the
borrowing to the Trust.  The Trust issued to CFC, Rural Electric
Cooperative Grantor Trust (Deseret) 10.11% Certificates, due 2017
(the "Certificates") in the amount of $152,895,000.  The
Certificates are solely the obligations of the Trust and are not
insured or guaranteed by CFC, the Cooperative, the Trustee, the
Rural Utilities Service ("RUS") of the United States Department of
Agriculture ("USDA") nor any other governmental agency.  Each
Certificate represents an undivided fractional interest in the Trust.
CFC is the depositor of the Trust and acts as servicer of the Note.
CFC filed, on behalf of the Trust, a Registration Statement on Form
S-1 (Registration No. 33-14843) which became effective on May 4,
1988, and resold the Certificates thereunder.

The assets of the Trust consist primarily of the Note, bearing
interest at 10.21% and maturing 2017, which is guaranteed (the
"Guarantee") as to timely payment of principal and interest by the
United States of America, acting through the Administrator of
RUS.  The amounts of principal and interest payments on the Note
held by the Trust are sufficient to cover the scheduled principal and
interest payments on the Certificates issued by the Trust and the
scheduled amounts of servicer fees.  The General Counsel of the
USDA has issued an opinion that the Guarantee is supported by the
full faith and credit of the United States of America.

The Trust also receives a conversion fee of .1829% from Deseret.
This fee was derived when the note receivable from Deseret was
converted from a variable to a fixed interest rate.  The fee was paid
until December 4, 1997 as a yield adjustment.  The conversion fee
was passed through to the servicer.

Debt service and servicer fee payments on the Note are made to the
Trustee semi-annually (June 4 and December 4) by the Cooperative
or RUS guarantor of the Note.  The Trustee deposits all such
receipts in the Trust account.  The Trustee is authorized by the
Trust Agreement to invest all funds in the Trust account at the
direction of CFC in certain eligible investments that mature no later
than the business day next preceding the day (June 15 and
December 15) such amounts are to be distributed to the
certificateholders and the servicer.  The interest earned on the
investments is distributed to the Cooperative.  Any funds that are
not so invested must be held by the Trustee in the Trust account.
The Trustee may not reinvest any returns of principal or investment
earnings on eligible investments and the Trustee may not sell any
eligible investment prior to its maturity except, at the direction of
CFC, to preserve the value of the corpus of the Trust.

On or before five business days after each date on which payments
are made on the Certificates, the Trustee is obligated to supply the
holders of such Certificates a report provided by the servicer, which
includes certain pertinent information as to how the payment is to
be allocated to principal, interest, servicer fees and premium, if any,
as well as the principal balance outstanding after such payment.


<PAGE>
The fiscal year of the Trust is the calendar year.  Within the
prescribed period of time for tax reporting purposes, after the end
of each calendar year during the term of the Trust Agreement, the
Trustee is obligated to prepare and mail to each certificateholder of
record for the Trust, at any time during such year, a report setting
forth the information as is reasonably necessary for the preparation
of such certificateholder's Federal income tax return.

Payments of principal on the Certificates are scheduled to be repaid
over a period of fifteen years, beginning in 2003. The Certificates
are not subject to redemption prior to December 15, 1997. On
January 30, 1998, RUS purchased the Note in the amount of
$152,895,000, with accrued interest of $2,447,467 and a
prepayment premium of $7,728,842. On that same day, the Trust
Agreement terminated when the trustee paid the full amount to the
certficateholders.


2.	TAX STATUS OF THE TRUST

Milbank, Tweed, Hadley & McCloy, Counsel to CFC, has advised
CFC with respect to the Trust that, in its opinion, (i) the Trust will
not be classified as an association taxable as a corporation, but will
be classified as a grantor trust and (ii) each certificateholder will be
treated for Federal income tax purposes as the owner of an
undivided fractional interest in each of the assets held by the Trust.

It is expected that the Trust will not have any liability for federal or
state income taxes for the current or future years.


3.	INTEREST AND SERVICER FEE ACCOUNTING

The Trust records interest income as it is earned and accrues
interest expense and servicer fees as they are incurred.   Servicer
fees represent ten basis points of the outstanding principal balance
of the Certificates and the Note.


4.	FAIR VALUE OF FINANCIAL INSTRUMENTS

	Use Of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of expenses during the reported period.  The estimates
involve judgments with respect to, among other things, various
future factors which are difficult to predict and are beyond the
control of the Trust.  With regards to the fair values below, actual
amounts could differ from these estimates.

The following disclosure of the estimated fair value of financial
instruments is made in accordance with FASB Statement No. 107,
"Disclosure about Fair Value of Financial Instruments."  Whenever
possible, the estimated fair value amounts have been determined
using quoted market information as of December 31, 1997 and
1996, along with other valuation methodologies which are
summarized below.  Below is a summary of significant
methodologies used in estimating fair value amounts and a schedule
of fair values at December 31, 1997 and 1996 .

The carrying amounts reported for Interest receivable, Interest
payable - Grantor Trust Certificates, and Servicer fees payable
approximate fair values due to the short-term maturity of these
instruments.


<PAGE>
Note Receivable

Fair value is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities.

Rural Electric Cooperative Grantor Trust Certificates

The fair value of the Certificates is estimated using quoted market
prices for similar notes over the same remaining maturities.

The carrying and estimated fair values of the Trust's financial
instruments as of December 31, 1997 and 1996 are as follows:


                                       1997                       1996
                              Carrying       Fair       Carrying       Fair
                               Value         Value        Value        Value

Assets:
Interest receivable        $  1,170,794 $  1,170,794 $  1,191,767 $  1,191,767
Note receivable             152,895,000  213,320,475  152,895,000  203,695,422

Liabilities:
Interest payable -
Grantor Trust Certificates    1,159,326    1,159,326    1,159,326    1,159,326
Servicer fees payable            11,468       11,468       32,441       32,441
Rural Electric Cooperative
 Grantor Trust
 Certificates               152,895,000  213,799,628  152,895,000  204,856,226