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 September 30, 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)



        1919 S. Shiloh Road, Suite 600 - LB 48, Garland, Texas 75042-8234
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (972) 864-8610


                                      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 October 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

                               September 30, 1997


                                      INDEX


PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements:

          Condensed Balance Sheets as of September 30, 1997 and
          December 31, 1996 (Unaudited)

          Condensed Statements of Earnings for the Three and Nine
          Months Ended September 30, 1997 and 1996 (Unaudited)

          Condensed Statements of Cash Flows for the Nine Months Ended
          September 30, 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)

                    September 30, 1997 and December 31, 1996
                            (In Thousands of Dollars)

                                                           Sept. 30,  Dec. 31,
                                                             1997       1996
                                                           --------   --------
                             ASSETS
Current assets:
    Cash and temporary cash investments ..............      $ 1,165    $   115
    Investments - available for sale .................        3,460      2,646
    Accounts receivable, net .........................        1,909      3,054
    Prepaid expenses and other current assets ........          153        103
                                                            -------    -------
      Total current assets ...........................        6,687      5,918

Property and Equipment - at cost:                            27,561     26,442
    Less accum. depreciation, depletion and amort.....      (11,015)    (9,677)
                                                            -------   --------
      Net property and equipment .....................       16,546     16,765
                                                            -------   --------

Total Assets .........................................      $23,233    $22,683
                                                            =======    =======

              LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
    Accounts payable and other current liabilities ...      $   631    $   343
    Production and property taxes payable or accrued .          791        755
    Royalties and production payment payable .........          722      1,199
    Distributions payable to Unitholders .............        1,959      1,853
                                                            -------    -------
      Total current liabilities ......................        4,103      4,150
Long-term debt .......................................          122      3,144
                                                            -------    -------
      Total liabilities ..............................        4,225      7,294

Commitments and contingencies (Note 2)

Partnership capital
    General partners .................................          113         77
    Unitholders ......................................       18,895     15,312
                                                            -------    -------
      Total partnership capital ......................       19,008     15,389
                                                            -------    -------

Total liabilities and partnership capital ............      $23,233    $22,683
                                                            =======    =======

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

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


                        CONDENSED STATEMENTS OF EARNINGS
                                   (Unaudited)

         For the Three and Nine Months Ended September 30, 1997 and 1996
                            (In Thousands of Dollars)




                                       Three Months Ended      Nine Months Ended
                                          September 30,          September 30,
                                       ------------------      ----------------
                                         1997       1996        1997     1996
                                       --------   -------      -------  -------

Net operating revenues:
     Natural gas sales ..............  $ 4,202    $ 4,066      $14,065  $13,369
     Other ..........................       41         32          133       97
     Production payment (ORRI) ......     (221)      (506)        (752)    (506)
     Litigation settlement adjustment      -0-     (1,204)         -0-   (1,204)
                                       -------    -------     -------- --------
Total net operating revenues .......     4,022      2,388       13,446   11,756
                                       -------    -------     -------- --------
Costs and expenses
    Operating, including prod. taxes       773      1,034        2,613    2,699
    Depletion, depreciation & amort.       448        363        1,391    1,096
    General and administrative .....       137        131          412      376
    Management fees ................        99         86          312      298
    Interest .......................        18         62           96      105
    Litigation settlement ..........       -0-      3,036          -0-    3,036
    Other income, net ..............       (33)       (14)        (100)     (72)
                                       -------    -------     -------- --------
Total costs and expenses ...........     1,442      4,698        4,724    7,538
                                       -------    -------     --------  -------
Net earnings .......................   $ 2,580    $(2,310)    $  8,722  $ 4,218
                                       =======    =======     ========  =======
Net earnings per Unit (in dollars) .   $  0.24    $ (0.21)    $   0.80  $  0.39
                                       =======    =======     ========  =======





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


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


                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

              For the Nine Months Ended September 30, 1997 and 1996
                            (In Thousands of Dollars)




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

Cash flows provided by operating activities ..........     $10,997      $ 7,442
                                                           -------      -------
Cash flows used in investing activities:
    Purchases of prop. & equipment, net of retirements      (1,215)      (4,063)
    Cash received on sale of other prop. & equipment..          45           16
                                                           -------      -------
Cash flows used in investing activities ..............      (1,170)      (4,047)
                                                           -------      -------
Cash flows used in financing activities:
    Distributions paid to Unitholders ................      (5,755)      (5,535)
    Additions to long-term debt ......................       7,200       10,566
    Reductions of long-term debt .....................     (10,222)      (8,547)
                                                           -------      -------
Cash flows used in financing activities ..............      (8,777)      (3,516)
                                                           -------      -------

Increase (decrease) in cash and
     temporary cash investments ......................       1,050         (121)
Cash and temporary cash investments at January 1, ....         115          183
                                                           -------      -------
Cash and temporary cash investments at September 30, .     $ 1,165      $    62
                                                           =======      =======












            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.  Per-Unit
     information is calculated by dividing the 99% interest owned by Unitholders
     by the 10,744,380 Units outstanding.  Certain amounts in the 1996 financial
     statements have been reclassified to conform to the 1997 presentation.
 
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,  prospectively
     only,  agreed  to  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, was paid on May 15, 1997 and
     covered  the  year  ended  February  28,  1997.  An  additional  amount  of
     approximately  $423,000  has been accrued for the period from March 1, 1997
     through  September 30, 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 (which included 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.  On September 10, 1997 the Partnership,  as well as
     numerous other parties,  was denied  regulatory relief with respect to this
     matter. Payment of the principal and interest is anticipated in March 1998.
     Additional interest of $25,000 has been accrued through September, 1997.

     Effective May 1, 1997, the Partnership's  Kansas gas was committed for sale
     and  processing to PanEnergy  Field  Services,  Inc. (now Duke Energy Field
     Services,  Inc.) for a period of 3 years.  Duke Energy will pay based on an
     index of the market price in the field plus a premium. Similarly, effective
     July 1,  1997 the  Partnership'  Oklahoma  gas was  committed  for sale to
     Williams  Energy  Services  Company for a one year period at a premium over
     the market price index.

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  $6,000,000,  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 November 10, 1997. All amounts  borrowed under this facility will become
     due and payable on July 31,  1999.  As of  November  10,  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  $370,000 during the third 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 and nine months ended
September 30, 1997 were $3,114,000 and $10,997,000  compared to ($1,222,000) and
$7,442,000 for the same periods of 1996. Second quarter 1997 net cash flows were
$3,157,000.  For the three and nine month periods  ended  September 30, 1996 net
cash flows from  operating  activities  were lower as a result of  non-recurring
charges and other costs from the settlement of litigation during 1996. Three and
nine month  operating cash flows have been  positively  impacted  during 1997 by
natural gas market  prices  which were higher  compared to the same periods last
year. Lower 1997 gas sales volumes compared to the same period of 1996 tended to
offset the improved gas pricing.

Other  comparisons  of  1997  results  to  1996  are  also  influenced  by  1996
non-recurring  items.  Third quarter 1996 net  operating  revenues and operating
expenses  were offset by  litigation  amounts of  approximately  $1,710,000  and
$121,000,  respectively.  Also, 1996 third quarter  operating expense includes a
$387,000  charge  for  refund of Kansas ad valorem  tax  reimbursement.  Through
September  30,  1997 an  additional  $33,000 in  interest on the refund has been
accrued.  Please see Note 2 to the Partnership's  Condensed Financial Statements
for  additional  information  related to the  litigation  settlement and the tax
refund. In connection with the settlement, the Partnership will pay a production
payment on May 15, 1998;  approximately $423,000 has been accrued for the period
from March 1, 1997 through September 30, 1997.

The Partnership has available a $15,000,000  unsecured revolving credit facility
with a current borrowing base of $6,000,000.  Please see Note 3 to the financial
statements  for  additional  information.  As of November 10,  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 $370,000 during the third quarter of 1997 compared to
approximately $400,000 for the second quarter of 1997.

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

                                   Three Months Ended          Nine Months Ended
                               ----------------------------    -----------------
                                 September 30,                   September 30,
                               ----------------     June 30,   -----------------
                                1997       1996       1997      1997       1996
Sales Volumes - MMCF:          -----      -----      -----     -----      -----
   Oklahoma ...............    1,374      1,416      1,387     4,251      4,719
   Kansas .................      448        527        491     1,440      1,699
                               -----      -----      -----     -----      -----
Total MMCF ................    1,822      1,943      1,878     5,691      6,418
                               =====      =====      =====     =====      =====
Weighted Average Sales Prices - $/MCF:
   Oklahoma ...............    $2.30      $2.10      $2.04     $2.47      $2.10
   Kansas .................     2.34       2.08       2.06      2.48       2.04
Overall Weighted Avg - $/MCF   $2.31      $2.09      $2.04      2.47       2.08

Oklahoma  gas sales  volumes  during the 1997  third  quarter  were  essentially
unchanged from sales volumes during the previous 1997 quarter. Natural reservoir
changes  resulted  in most of the lower sales  volume for the nine months  ended
September 30, 1997 compared to the same period in 1996. Compared to the previous
1997  quarter and the 1996 third  quarter  and the 1996 same nine month  period,
Kansas 1997 sales volumes have decreased.  Such decreases are primarily a result
of declining Kansas reservoir pressures experienced by the Partnership and other
producers in the area. The  Partnership  began  operation on November 5, 1997 of
additional gas gathering  pipelines and seven rental gas compressor  units which
are scattered over a ten mile area.  Initial  results show a 30% increase in gas
sales which is expected to decline  gradually.  The  Partnership  expects Kansas
operating  costs to increase by  approximately  $300,000 per year as a result of
such field gas compression operations.




<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 Matter No. 2A  Oklahoma  Guymon-Hugoton  Field gas well  discussed  in press
releases  dated  July 28,  1997  and  September 5,  1997  continues  to  perform
favorably.  Current  Matter  No. 2A  production  is 587 MCFD at 91 psig  flowing
pressure from the  Winfield/Krider  zones of the Guymon-Hugoton  formation.  The
Matter No. 2A replaced the now plugged Matter No. 2 well which previously flowed
105 MCFD at 24 psig  from the same two  zones.  Because  the  Matter  No. 2A had
larger  than  normal   volumes  at  higher  than  normal   pressures   from  the
Winfield/Krider zones, the slightly deeper Fort Riley zone of the Guymon-Hugoton
formation  has  remained  isolated and not  producing  from the Matter No. 2A to
allow time for evaluation of the Winfield/Krider  zone. Such evaluation is still
underway.  The  Partnership  anticipates  reentering  the  Matter  No. 2A during
November,  1997 and  establishing  flow from the Fort Riley zone which initially
tested  greater  than  500 MCFD  with no  water  and  higher  pressure  than the
Winfield/Krider zones. Upon successfully opening the Fort Riley zone, the Matter
No. 2A is expected to be  simultaneously  producing  from all three zones of the
Guymon-Hugoton  Field.  The Matter No. 2A Fort Riley zone is expected to require
continuous  operation  without  excessive  pressure loss or water production for
several months to determine the  probability of attempting  additional  wells in
the Fort Riley.

The Partnership's routine workover of wells in both Kansas and Oklahoma recently
included  fracture  treating  (the creation of cracks in the formation to assist
gas flow  toward the well bore from the  producing  zones).  Following  fracture
treating,  the Oklahoma  Long No. 1 well  recently  produced 369 MCFD at 53 psig
flowing pressure.  Prior to workover,  the Long No. 1 was capable of efficiently
producing 265 MCFD at 28 psig flowing pressure.  The Partnership is particularly
pleased with the Long No. 1 increase in pressure  and believes  that many of its
Oklahoma wells are prospects for similar  fracturing.  Such fracture  treatments
cost from  $25,000 to $75,000 per well.  However,  the results of such  fracture
treating  will vary widely from well to well and may not be as successful as the
Long No. 1.

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 the Kansas Hugoton Field where regulations
permit  two gas  wells  per  each 640  acres  versus  one  well in the  Oklahoma
Guymon-Hugoton  Field.  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 existing
field  rules  are  proven   conservation   measures  and  necessary  to  protect
correlative rights among mineral owners and producers and to prevent waste.

On October 28, 1997 the Oklahoma Corporation  Commission , which administers oil
and gas  conservation  in Oklahoma,  conducted a hearing on a proposal to set an
allowable amount of production per well that essentially  removes any production
quantity  restriction  from 98% of the wells in the  Guymon-Hugoton  field.  The
hearing included  contradictory  viewpoints that the proposal  encouraged infill
drilling vs. that the proposal had no effect on the infill drilling issue. It is
not known when the  Oklahoma  Corporation  Commission  will issue a decision  or
whether any decision will face legal challenges.

The  Partnership  continues  to be active  in  supporting  its  views  regarding
possible  Guymon-Hugoton  regulatory  action on rules  regulating gas production
quantities  and  on  infill  drilling.  Both  infill  drilling  and  removal  of
restrictions  on  production  amounts  could  result  in  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: 
         a)  On July 2, 1997, the Partnership amended its Partnership  agreement
             to change  its address to  1919 S. Shiloh Road, Suite 600  -  LB48,
             Garland, TX 75042-8234.
         b)  Mr. Rawles Fulgham was re-appointed to the  Partnership's  Advisory
             Committee  for  a two  year term.  Mr.  W.  Randall  Blank, also on
             the Advisory Committee, will be eligible  for re-appointment to the
             Advisory Committee in 1998.

     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: November 10, 1997                /s/ Kathleen A. Rawlings
                                       Kathleen A. Rawlings
                                       Controller (Principal Accounting Officer)