SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934




For Quarter Ended March 31, 1997                 Commission file number 0-10697



                            DORCHESTER HUGOTON, LTD.
             (Exact name of registrant as specified in its charter)




              Texas                                     75-1829064
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 Incorporation or organization)



         9696  Skillman  Street,  Suite  320-LB  42,  Dallas,  Texas  75243-8200
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (214) 340-3443


                                      None
                  Former name, former address and former fiscal
                       year, if changed since last report


     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

     As of April 30, 1997,  10,744,380  Depositary Receipts for Units of Limited
Partnership Interest were outstanding.


<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)

                          QUARTERLY REPORT ON FORM 10-Q

                                 March 31, 1997


                                      INDEX


PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements:

          Condensed Balance Sheets as of March 31, 1997 and
          December 31, 1996 (Unaudited)

          Condensed Statements of Earnings for the Three Months Ended
          March 31, 1997 and 1996 (Unaudited)

          Condensed Statements of Cash Flows for the Three Months Ended
          March 31, 1997 and 1996 (Unaudited)

          Notes to Condensed Financial Statements (Unaudited)


  Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations



PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings

  Item 5. Other Information

  Item 6. Exhibits and Reports on Form 8-K



SIGNATURES



<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)
PART I
Item 1
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)

                      March 31, 1997 and December 31, 1996
                            (In Thousands of Dollars)

                                                           March 31,  Dec. 31,
                                                             1997       1996
                                                           --------   --------
                             ASSETS
Current assets:
    Cash and temporary cash investments ..............      $   119    $   115
    Investments - available for sale .................        2,909      2,646
    Accounts receivable, net .........................        3,059      3,054
    Prepaid expenses and other current assets ........           66        103
                                                            -------    -------
      Total current assets ...........................        6,153      5,918

Property and Equipment - at cost:                            26,555     26,442
    Less accum. depreciation, depletion and amort.....      (10,127)    (9,677)
                                                            -------   --------
      Net property and equipment .....................       16,428     16,765
                                                            -------   --------

Total Assets .........................................      $22,581    $22,683
                                                            =======    =======

              LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
    Accounts payable and other current liabilities ...      $   505    $   343
    Production and property taxes payable or accrued .          741        755
    Royalties and production payment payable .........        1,308      1,199
    Distributions payable to Unitholders .............        1,962      1,853
                                                            -------    -------
      Total current liabilities ......................        4,516      4,150
Long-term debt .......................................          422      3,144
                                                            -------    -------
      Total liabilities ..............................        4,938      7,294

Commitments and contingencies (Note 2)

Partnership capital
    General partners .................................           99         77
    Unitholders ......................................       17,544     15,312
                                                            -------    -------
      Total partnership capital ......................       17,643     15,389
                                                            -------    -------

Total liabilities and partnership capital ............      $22,581    $22,683
                                                            =======    =======

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

<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)


                         CONDENSED STATEMENT OF EARNINGS
                                   (Unaudited)

               For the Three Months Ended March 31, 1997 and 1996
                            (In Thousands of Dollars)




                                                           Three Months Ended
                                                               March 31,
                                                         ---------------------
                                                           1997         1996
                                                         --------     --------

Net operating revenues:
     Natural gas sales .............................     $  6,023     $ 4,664
     Other .........................................           50          33
     Production payment (ORRI) .....................         (344)        -0-
     Litigation settlement adjustment ..............          -0-         -0-
                                                         --------     --------
Total net operating revenues .......................        5,729       4,697
                                                         --------     --------
Costs and expenses
    Operating, including production taxes ..........          984         813
    Depletion, depreciation & amortization .........          485         381
    General and administrative .....................          148         141
    Management fees ................................          116         106
    Interest ......................................            58          31
    Litigation settlement ..........................          -0-         -0-
    Other income, net ..............................          (21)        (21)
                                                         --------     --------
Total costs and expenses ...........................        1,770       1,451
                                                         --------     --------
Net earnings .......................................     $  3,959     $ 3,246
                                                         ========     ========
Net earnings per Unit (in dollars) .................     $   0.36     $  0.30
                                                         ========     ========





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


<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)


                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)

               For the Three Months Ended March 31, 1997 and 1996
                            (In Thousands of Dollars)




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

Cash flows provided by operating activities ..........     $ 4,726      $ 3,050
                                                           -------      -------
Cash flows used in investing activities:
    Purchases of prop. & equipment, net of retirements        (128)        (267)
    Cash received on sale of other prop. & equipment..         (27)         -0-
                                                           -------      -------
Cash flows used in investing activities ..............        (155)        (267)
                                                           -------      -------
Cash flows used in financing activities:
    Distributions paid to Unitholders ................      (1,845)      (1,845)
    Additions to long-term debt ......................       2,700        3,766
    Reductions of long-term debt .....................      (5,422)      (4,847)
    Other ............................................         -0-          -0-
                                                           -------      -------
Cash flows used in financing activities ..............      (4,567)      (2,926)
                                                           -------      -------

Increase (decrease) in cash and temp. cash investments           4         (143)
Cash and temporary cash investments at January 1, ....         115          183
                                                           -------      -------
Cash and temporary cash investments at March 31, .....     $   119      $    40
                                                           =======      =======












            The accompanying condensed notes are an integral part of
                           these financial statements.
<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   The condensed financial statements reflect all adjustments (consisting only
     of normal,  recurring adjustments and certain adjustments discussed in Note
     2)  which  are,  in  the  opinion  of  management,  necessary  for  a  fair
     presentation of Dorchester Hugoton, Ltd.'s (the "Partnership's")  financial
     position  and  operating  results for the interim  period.  Interim  period
     results are not  necessarily  indicative  of the  results for the  calendar
     year.  Please refer to  Management's  Discussion  and Analysis of Financial
     Condition  and  Results  of  Operations  for  additional  information.  The
     weighted average number of Units outstanding for the period was 10,744,380.

2.   On August 14, 1996 the Partnership paid Parker & Parsley  Petroleum Company
     entities (successor to Damson Oil Corporation and Dorchester Master Limited
     Partnership - collectively referred to as "P&P") $7.0 million in settlement
     of all outstanding litigation. Some of the numerous issues resolved by this
     settlement  include the  withdrawal by P&P of its claims of gas  processing
     rights  to  the  Partnership's  Oklahoma  gas  production,  its  rights  to
     participate in any Oklahoma gas wells, and its claims for unpaid production
     payment amounts. The Partnership received  confirmation of its ownership of
     gas  gathering   pipelines  connected  to  its  Oklahoma  wells  and  will,
     prospectively  only, pay P&P any  production  payment  (overriding  royalty
     interest) amount that may be due as set forth in a 1986 amended  agreement.
     The first production  payment of $1,034,472.39,  is payable on May 15, 1997
     and  covers the year ended  February  28,  1997.  An  additional  amount of
     approximately  $45,000 has been  accrued for March,  1997.  The  production
     payment  calculation is based upon the difference between market gas prices
     compared  to a table of rising  prices and based upon a table of  declining
     volumes.

     During 1996 the  Partnership  booked  $395,000 to  operating  expenses  for
     Kansas tax reimbursements (plus related interest through December 31, 1996)
     received  by the  Partnership  during the years 1983 to 1987.  This  charge
     results  from a  ruling  by the  United  States  Court of  Appeals  for the
     District of Columbia which overruled a previous order by the Federal Energy
     Regulatory Commission. The Partnership,  as well as numerous other parties,
     may pursue  further  judicial  review or regulatory  relief with respect to
     this matter.  Additional interest of $8,000 has been accrued through March,
     1997.

     Effective May 1, 1997, the Partnership's  Kansas gas was committed for sale
     and processing to PanEnergy Field  Services,  Inc. for a period of 3 years.
     PanEnergy  will pay based on an index of the market price in the field plus
     a premium.

3.   Since 1994 the  Partnership  has maintained an unsecured  revolving  credit
     facility for $15,000,000 (the  "Agreement")  with Bank One, Texas, N.A. The
     Agreement  has a  current  borrowing  base  of  $8,500,000,  which  will be
     re-evaluated by Bank One at least semi-annually.  If, on any such date, the
     aggregate  amount of  outstanding  loans and  letters of credit  exceed the
     current  borrowing  base as most  recently  determined  by  Bank  One,  the
     Partnership is required to repay the excess.  This credit  facility  covers
     both cash advances and any letters of credit that the Partnership may need,
     with interest  being charged at the base rate for Bank One,  which was 8.5%
     on May 6, 1997.  All amounts  borrowed  under this facility will become due
     and payable on July 31, 1999. As of May 6, 1997, letters of credit totaling
     $25,000 were issued under the credit  facility and the amount  borrowed was
     $100,000.  The weighted  average amount  borrowed under the credit facility
     was approximately $2,400,000 during the first quarter of 1997.

<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)
PART I
Item 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Net cash flows from operating activities during the three months ended March 31,
1997  were  $4,726,000  compared  to  $3,050,000  for the same  period  of 1996.
Operating cash flows were positively  impacted during 1997 by natural gas market
prices which were significantly higher compared to the same periods last year as
shown in the table below. The Partnership was pleased that favorable past winter
gas  prices  enabled  a  significant  reduction  in debt and also  permitted  an
increase in the distribution from $0.17 to $0.18 per Unit as announced March 13,
1997.

The Partnership has available a $15,000,000  unsecured revolving credit facility
with a current borrowing base of $8,500,000.  Please see Note 3 to the financial
statements  for  additional  information.  As of May 6, 1997,  letters of credit
totaling  $25,000 were issued under the credit  facility and the amount borrowed
was $100,000. The weighted average amount borrowed under the credit facility was
approximately   $2,400,000   during  the  first  quarter  of  1997  compared  to
approximately $4,700,000 for the fourth quarter of 1996.

As discussed in Note 2 to the Partnership's Condensed Financial Statements,  all
of the Partnership's  outstanding  litigation,  claims,  and counterclaims  with
Parker & Parsley  Petroleum  Company  entities have been settled.  In connection
with the settlement,  the Partnership  will pay a production  payment on May 15,
1997 of  $1,034,472.39  for the year ended  February  28,  1997.  An  additional
$45,000 has been accrued for March, 1997.

The  Partnership's  portion  of gas sales  volumes  (not  reduced  for  Oklahoma
production payment) and weighted average sales prices were:

                                             Three Months Ended
                                        ----------------------------
                                            March 31,
                                        ----------------     Dec. 31
                                         1997       1996       1996
Sales Volumes - MMCF:                   -----      -----      -----
   Oklahoma ...............             1,491      1,723      1,531
   Kansas .................               500        606        503
                                        -----      -----      -----
Total MMCF ................             1,991      2,329      2,034
                                        =====      =====      =====
Weighted Average Sales Prices - $/MCF:
   Oklahoma ...............             $3.02      $2.02      $2.69
   Kansas .................              3.03       1.95       2.81
Overall Weighted Average - $/MCF        $3.03      $2.00      $2.72

Oklahoma  natural gas sales volumes were lower during the first quarter compared
to the first  quarter of 1996 as a result of routine state well tests during the
current  quarter.  Kansas  natural gas sales  volumes were also lower during the
first quarter  compared to the same quarter of 1996 during which new compression
facilities began operation.


<PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)

PART I
Item 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (Continued)



The Partnership is currently  completing an additional 100% owned Kansas well to
better compete with adjoining wells of others for the existing gas reserves. The
Partnership anticipates filing a request during May or June 1997 for a permit to
drill a well to test the Fort Riley zone in Oklahoma  (See 1996 Annual Report on
Form 10-K). Since drilling rigs are not readily available, no forecasted date of
drilling is  currently  possible.  Additionally,  it is not known how many wells
should be attempted to evaluate any potential of the Fort Riley  formation.  The
outcome of such exploration is unpredictable.

Subsequent to discussions in the Partnership's  1996 Annual Report on Form 10-K,
in late  February,  1997,  Oklahoma  did not pass  legislation  that  would have
allowed "infill  drilling"  similar to Kansas where  regulations  permit two gas
wells per each 640 acres versus one well in Oklahoma. Such Oklahoma legislation,
if passed,  also would  have  eliminated  the  Guymon-Hugoton  field  rules that
regulate  the  amount of gas  production  by all  producers  in the  field.  The
Partnership  believes  the field  rules are  proven  conservation  measures  and
necessary to protect  correlative  rights among mineral owners and producers and
to prevent waste.  At present,  a similar  proposal to essentially  remove field
rules and encourage  infill drilling is pending before the Oklahoma  Corporation
Commission,  which  administers  oil  and gas  conservation  in  Oklahoma.  Such
proposal is set for hearing in September, 1997.

The  Partnership  continues  to be active  in  supporting  its  views  regarding
possible   Oklahoma   regulatory  action  on  rules  regulating  gas  production
quantities and on infill drilling. Both infill drilling and elimination of field
rules could require considerable capital  expenditures.  The cost and outcome of
such activities is  unpredictable.  On May 7, 1996 the  Partnership  announced a
Unit repurchase  program.  While the Partnership has not repurchased and retired
any Units to date, that program is still in place.

 <PAGE>
                            DORCHESTER HUGOTON, LTD.
                          (A Texas Limited Partnership)

                                OTHER INFORMATION
PART II

     Item 1. Legal  Proceedings:  See Notes to Condensed  Financial  Statements.

     Item 5. Other  Information:  Effective May 22, 1997, the  Partnership  will
          move its office in the Dallas area to 1919 S. Shiloh Road, Suite 600 -
          LB48, Garland,  TX 75042-8234.  Our new telephone number will be (972)
          864-8610.

     Item 6. Exhibits  and  Reports  on Form 8-K:
         a)  Exhibit  27 -  Financial  Data Schedule
         b)  Reports on Form 8-K - None.



                                   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.


                                       DORCHESTER HUGOTON, LTD.
                                       Registrant





Date:  May  7, 1997                    /s/ Kathleen A. Rawlings
                                       Kathleen A. Rawlings
                                       Controller (Principal Accounting Officer)