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, 1998                 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, TX 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 April 30, 1998,  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, 1998


                                      INDEX


PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements:

          Condensed Balance Sheets as of March 31, 1998 and
          December 31, 1997 (Unaudited)

          Condensed Statements of Earnings for the Three Months Ended
          March 31, 1998 and 1997 (Unaudited)

          Condensed Statements of Cash Flows for the Three Months Ended
          March 31, 1998 and 1997 (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, 1998 and December 31, 1997
                            (In Thousands of Dollars)
                                                           March 31,  Dec. 31,
                                                             1998       1997
                                                           --------   --------
                             ASSETS
Current assets:
    Cash and cash equivalents ........................      $ 4,176    $ 3,344
    Restricted cash ..................................          366        -0-
    Investments - available for sale .................        3,652      3,304
    Accounts receivable, net .........................        1,918      2,086
    Prepaid expenses and other current assets ........          113        136
                                                            -------    -------
      Total current assets ...........................       10,225      8,870

Property and equipment - at cost:                            27,915     27,875
    Less depreciation, depletion, and amortization ...      (12,002)   (11,530)
                                                            -------   --------
      Net property and equipment .....................       15,913     16,345
                                                            -------   --------

Total assets .........................................      $26,138    $25,215
                                                            =======    =======

              LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
    Accounts payable and other current liabilities ...      $   412    $   411
    Production and property taxes payable or accrued .          718        820
    Royalties and production payment payable .........        1,250      1,063
    Distributions payable to Unitholders .............        1,958      1,958
                                                            -------    -------
      Total current liabilities ......................        4,338      4,252
Long-term debt .......................................          100        122
                                                            -------    -------
      Total liabilities ..............................        4,438      4,374

Commitments and contingencies (Note 2)

Partnership capital
    General partners .................................          140        131
    Unitholders ......................................       21,560     20,710
                                                            -------    -------
      Total partnership capital ......................       21,700     20,841
                                                            -------    -------

Total liabilities and partnership capital ............      $26,138    $25,215
                                                            =======    =======
            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 Months Ended March 31, 1998 and 1997
                            (In Thousands of Dollars)




                                                           Three Months Ended
                                                               March 31,
                                                         ---------------------
                                                           1998         1997
                                                         --------     --------

Net operating revenues:
     Natural gas sales .............................     $  4,250     $ 6,023
     Other .........................................           49          50
     Production payment (ORRI) .....................         (202)       (344)
                                                         --------     -------
Total net operating revenues .......................        4,097       5,729
                                                         --------     -------
Costs and expenses
    Operating, including production taxes ..........          878         984
    Depletion, depreciation & amortization .........          505         485
    General and administrative .....................          143         148
    Management fees ................................          125         116
    Interest ......................................            10          58
    Other income, net ..............................          (28)        (21)
                                                         --------     -------
Total costs and expenses ...........................        1,633       1,770
                                                         --------     -------
Net earnings .......................................     $  2,464     $ 3,959
                                                         ========     =======
Net earnings per Unit (in dollars) .................     $   0.23     $  0.36
                                                         ========     =======





            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 Three Months Ended March 31, 1998 and 1997
                            (In Thousands of Dollars)




                                                            1998          1997
                                                           -------      -------

Cash flows provided by operating activities ..........     $ 2,887      $ 4,726
                                                           -------      -------
Cash flows used in investing activities:
    Purchases of property & equipment ................         (79)        (182)
    Cash received on sale of
           other property & equipment ................         -0-           27
                                                           -------      -------
Cash flows used in investing activities ..............         (79)        (155)
                                                           -------      -------
Cash flows used in financing activities:
    Distributions paid to Unitholders ................      (1,954)      (1,845)
    Additions to long-term debt ......................         -0-        2,700
    Reductions of long-term debt .....................         (22)      (5,422)
                                                           -------      -------
Cash flows used in financing activities ..............      (1,976)      (4,567)
                                                           -------      -------

Increase in cash and cash equivalents ................         832            4
Cash and cash equivalents at January 1, ..............       3,344          115
                                                           -------      -------
Cash and cash equivalents at March 31, ...............     $ 4,176      $   119
                                                           =======      =======












            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 the
     Unitholders by the 10,744,380 Units outstanding.

2.   During 1996 the  Partnership  booked  $395,000 to  operating  expenses  for
     refund  of 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. The Partnership received a refund
     request from Panhandle Eastern Pipe Line Company ("PEPL") and an additional
     amount of $105,000 was booked during 1997.  Subsequently,  the  Partnership
     and PEPL have reached agreement on a portion of the disputed amounts and on
     March 9, 1998  $151,756.92  was paid to PEPL.  An  additional  $366,633.13,
     which is still awaiting  possible  regulatory/judicial/legislative  action,
     was placed into an escrow  account.  The  escrowed  funds  include  amounts
     possibly  waived,  recovered or  recoverable  from  others.  A reduction to
     operating  expense of $51,000  offset by an  allowance  of $36,000  for the
     uncollectible portion not waived has been booked through March 31, 1998.

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, 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 April 30, 1998. All amounts  borrowed under
     this facility will become due and payable on July 31, 1999. As of April 30,
     1998,  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  $100,000 during the
     first quarter of 1998.

4.   As  previously  discussed  in the 1997  Annual  Report  on Form  10-K,  the
     Partnership  adopted a severance  policy  during the first quarter of 1998.
     Benefits are  generally  payable to employees and General Partner(s) in the
     event of a reduction in force or the  elimination of a position or group of
     positions.  The policy  provides  for up to  approximately  $2.8 million of
     severance payments if such obligations occur.


<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,
1998 were  $2,887,000  compared to $4,726,000  for the same period of 1997 while
net earnings were $0.23 and $0.36 per Unit,  respectively  for the same periods.
Operating  cash flows and net  earnings  were lower  during 1998  primarily as a
result of  significantly  lower natural gas market  prices  compared to the same
period last year as shown in the table below.

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 April 30, 1998, 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 $100,000 during the first quarter of 1998. Cash and temporary cash
investments  totaled  $4,542,000  on March 31, 1998  compared to  $3,344,000  on
December 31, 1997.

In connection with the Oklahoma properties, on May 15, 1998 the Partnership will
pay  approximately  $847,000 in production  payments for the year ended February
28, 1998. An additional $62,000 has been accrued for March, 1998.

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
                                         1998       1997       1997
Sales Volumes - MMCF:                   -----      -----      -----
   Oklahoma ...............             1,439      1,491      1,495
   Kansas .................               466        500        496
                                        -----      -----      -----
Total MMCF ................             1,905      1,991      1,991
                                        =====      =====      =====
Weighted Average Sales Prices - $/MCF:
   Oklahoma ...............             $2.21      $3.02      $2.98
   Kansas .................              2.30       3.03       3.07
Overall Weighted Average - $/MCF        $2.23      $3.03      $3.01

Oklahoma  natural gas sales volumes were slightly lower during the first quarter
compared  to the first  quarter of 1997 as a result of routine  state well tests
during the current quarter.  Kansas natural gas sales volumes were also slightly
lower during the first quarter  compared to the same quarter of 1997 partly as a
result of natural reservoir changes.


<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)



During  April,  1998 the  Partnership  drilled  its second well to test the Fort
Riley  zone in  Oklahoma  (see 1997  Annual  Report on Form  10-K).  Preliminary
results do not appear as  favorable  as the 1997 test well  although  evaluation
will  continue.  It is not known how many wells  should be attempted to evaluate
the potential of the Fort Riley  formation.  The outcome of such  exploration is
unpredictable.  Unrelated to the Fort Riley zone,  the two  Oklahoma  wells that
have been  fracture  treated  continue  to  produce  at  approximately  the same
increased volumes and pressures. Additional fracture treatments are planned.

As  previously  discussed in the 1997 Annual Report on Form 10-K, on February 4,
1998 the Oklahoma  Corporation  Commission ("OCC"),  which administers state oil
and gas conservation,  adopted rules that will essentially  remove limits on all
gas well production volume in mid-1998 in the Guymon Hugoton field including gas
from  the  Partnership's  wells.  The OCC  specifically  provided  that the rule
changes have no bearing on the question of infill drilling which must be decided
separately.  Infill drilling,  if adopted,  would likely allow one well for each
320 acres (as in the  Partnership's  Kansas  properties)  versus the present one
well for each 640 acres.  Both infill  drilling and  elimination  of field rules
could require  considerable  capital  expenditures.  THE OUTCOME AND THE COST OF
SUCH ACTIVITIES IS UNPREDICTABLE.

While the Partnership has not repurchased and retired any of its publicly traded
Units to  date,  the  previously  announced  program  is  still  in  place.  The
Partnership  anticipates  no material  impact on  operations or on the financial
statements due to Year 2000 computer issues.

As previously  discussed in the 1997 Annual Report on Form 10-K, the Partnership
is reviewing  its  strategic  alternatives  in light of the various  mergers and
other business  transactions  occurring in the natural gas and energy  industry.
Although no decision to sell or combine the  Partnership's  business with others
has been made,  the  Partnership  anticipates  possible  discussions  with third
parties which could result in such a decision.  The Partnership has no timetable
for any such  discussions,  and there is no assurance that any such  discussions
will lead to a transaction.  As discussed in Note 4, during the first quarter of
1998 the  Partnership  adopted a  severance  policy  which  would  provide up to
approximately $2.8 million of severance payments if such obligations occur.
 <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: On April 3, 1998 the Partnership amended Section
          3.08(a) of the  Restated  Certificate  and  Agreement  to provide  for
          reasonable severance payments for the General Partners.

     Item 6. Exhibits and Reports on Form 8-K:
          a)   Exhibit 3.02 - Amendment to the Partnership Agreement dated April
               3, 1998
          b)   Exhibit 27 - Financial Data Schedule
          c)   Reports on Form 8-K - On April 7, 1998, the Partnership announced
               that it had  changed  its  principal  accountant  from  Coopers &
               Lybrand, L.L.P. to Grant Thornton, LLP effective April 3, 1998.


                                   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:  April 30, 1998                  /s/ Kathleen A. Rawlings
                                       Kathleen A. Rawlings
                                       Controller (Principal Accounting Officer)