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 June 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


        9696 Skillman Street, Suite 320 - LB 42, Dallas, Texas 75243-8200
                  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 July 31, 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

                                  June 30, 1997


                                      INDEX


PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements:

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

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

          Condensed Statements of Cash Flows for the Six Months Ended
          June 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)

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

                                                           June 30,   Dec. 31,
                                                             1997       1996
                                                           --------   --------
                             ASSETS
Current assets:
    Cash and temporary cash investments ..............      $   465    $   115
    Investments - available for sale .................        3,308      2,646
    Accounts receivable, net .........................        1,640      3,054
    Prepaid expenses and other current assets ........          145        103
                                                            -------    -------
      Total current assets ...........................        5,558      5,918

Property and Equipment - at cost:                            27,115     26,442
    Less accum. depreciation, depletion and amort.....      (10,578)    (9,677)
                                                            -------   --------
      Net property and equipment .....................       16,537     16,765
                                                            -------   --------

Total Assets .........................................      $22,095    $22,683
                                                            =======    =======

              LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
    Accounts payable and other current liabilities ...      $   537    $   343
    Production and property taxes payable or accrued .          727        755
    Royalties and production payment payable .........          476      1,199
    Distributions payable to Unitholders .............        1,962      1,853
                                                            -------    -------
      Total current liabilities ......................        3,702      4,150
Long-term debt .......................................          122      3,144
                                                            -------    -------
      Total liabilities ..............................        3,824      7,294

Commitments and contingencies (Note 2)

Partnership capital
    General partners .................................          106         77
    Unitholders ......................................       18,165     15,312
                                                            -------    -------
      Total partnership capital ......................       18,271     15,389
                                                            -------    -------

Total liabilities and partnership capital ............      $22,095    $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 Six Months Ended June 30, 1997 and 1996
                            (In Thousands of Dollars)




                                       Three Months Ended      Six Months Ended
                                             June 30,              June 30,
                                       ------------------      ----------------
                                         1997       1996        1997     1996
                                       --------   -------      -------  -------

Net operating revenues:
     Natural gas sales ..............  $ 3,840    $ 4,638      $ 9,863  $ 9,302
     Other ..........................       42         33           92       66
     Production payment (ORRI) ......     (187)       -0-         (531)     -0-
     Litigation settlement adjustment      -0-        -0-          -0-      -0-
                                       -------    -------     -------- --------
Total net operating revenues .......     3,695      4,671        9,424    9,368
                                       -------    -------     -------- --------
Costs and expenses
    Operating, including prod. taxes       849        821        1,833    1,635
    Depletion, depreciation & amort.       458        353          943      734
    General and administrative .....       134        133          282      274
    Management fees ................        97        106          213      212
    Interest .......................        20         13           78       43
    Litigation settlement ..........       -0-        -0-          -0-      -0-
    Other income, net ..............       (46)       (37)         (67)     (58)
                                       -------    -------     -------- --------
Total costs and expenses ...........     1,512      1,389        3,282    2,840
                                       -------    -------     --------  -------
Net earnings .......................   $ 2,183    $ 3,282     $  6,142  $ 6,528
                                       =======    =======     ========  =======
Net earnings per Unit (in dollars) .   $  0.21    $  0.30     $   0.57  $  0.60
                                       =======    =======     ========  =======





            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 Six Months Ended June 30, 1997 and 1996
                            (In Thousands of Dollars)




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

Cash flows provided by operating activities ..........     $ 7,883      $ 8,664
                                                           -------      -------
Cash flows used in investing activities:
    Purchases of prop. & equipment, net of retirements        (746)        (717)
    Cash received on sale of other prop. & equipment..          34          -0-
                                                           -------      -------
Cash flows used in investing activities ..............        (712)        (717)
                                                           -------      -------
Cash flows used in financing activities:
    Distributions paid to Unitholders ................      (3,799)      (3,690)
    Additions to long-term debt ......................       5,200        4,766
    Reductions of long-term debt .....................      (8,222)      (6,347)
    Other ............................................         -0-          -0-
                                                           -------      -------
Cash flows used in financing activities ..............      (6,821)      (5,271)
                                                           -------      -------

Increase in cash and temp. cash investments ..........         350        2,676
Cash and temporary cash investments at January 1, ....         115          183
                                                           -------      -------
Cash and temporary cash investments at June 30, ......     $   465      $ 2,859
                                                           =======      =======












            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.

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  $218,000  has been accrued for the period from March 1, 1997
     through June 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 (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,
     is  currently  pursuing  regulatory  relief  with  respect to this  matter.
     Additional interest of $17,000 has been accrued through June, 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 August 6, 1997. All amounts borrowed under this facility will become due
     and  payable  on July 31,  1999.  As of August 6,  1997,  letters of credit
     totaling  $25,000  were  issued  under the credit  facility  and the amount
     borrowed was  $900,000.  The weighted  average  amount  borrowed  under the
     credit  facility was  approximately  $400,000  during the second 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 six months ended
June 30,  1997  were  $3,157,000  and  $7,883,000  compared  to  $5,614,000  and
$8,664,000 for the same period of 1996. Second quarter cash flows from operating
activities  were  impacted by lower  natural gas market  prices  compared to the
second quarter of 1996 as well as lower gas sales volumes compared to the second
quarter of 1996 as shown in the table below. Six 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.

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  were  settled  during  the third
quarter of 1996. In  connection  with the  settlement,  the  Partnership  paid a
production  payment on May 15, 1997 of $1,034,472.39 for the year ended February
28, 1997. An additional  amount of  approximately  $218,000 has been accrued for
the period from March 1, 1997 through June 30, 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 August 6, 1997, letters of credit
totaling  $25,000 were issued under the credit  facility and the amount borrowed
was $900,000. The weighted average amount borrowed under the credit facility was
approximately   $400,000   during  the  second   quarter  of  1997  compared  to
approximately $2,400,000 for the first 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           Six Months Ended
                               ----------------------------    -----------------
                                   June 30,                         June 30,
                               ----------------     Mar. 31,   -----------------
                                1997       1996       1997      1997       1996
Sales Volumes - MMCF:          -----      -----      -----     -----      -----
   Oklahoma ...............    1,387      1,579      1,491     2,878      3,302
   Kansas .................      491        564        500       991      1,172
                               -----      -----      -----     -----      -----
Total MMCF ................    1,878      2,143      1,991     3,869      4,474
                               =====      =====      =====     =====      =====
Weighted Average Sales Prices - $/MCF:
   Oklahoma ...............    $2.04      $2.19      $3.02     $2.55      $2.10
   Kansas .................     2.06       2.11       3.03      2.55       2.03
Overall Weighted Avg - $/MCF   $2.04      $2.16      $3.03      2.55       2.08

Oklahoma gas sales volumes were lower during the 1997 second quarter compared to
the previous  1997 quarter and compared to the 1996 second  quarter  partly as a
result of  different  well  shut-in  scheduling  for  routine  state well tests.
Shut-in of wells for Oklahoma test  scheduling had a similar effect in comparing
the six months  results of 1997 to 1996.  Additional  Oklahoma  gas sales volume
decreases  are a result of  natural  reservoir  changes.  Kansas  1997 gas sales
volumes  during the second  quarter were almost the same as the first quarter of
1997.  Compared  to 1996,  Kansas  1997 gas sales  volumes  were  lower than the
comparable  1996  second  quarter  and the 1996  same  six  month  period.  Such
decreases are primarily a result of declining reservoir pressures experienced by
the  Partnership  and other  producers in the area. The Partnership is currently
completing   design  of  additional  gas  gathering   pipeline  and  compression
facilities to help overcome such lower pressures.



<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)



As  announced  July 28, 1997,  the  Partnership  is pleased  with the  favorable
preliminary results of the Matter No. 2A gas well test of the Fort Riley portion
of the geological  formation  comprising the Oklahoma  Guymon-Hugoton  Field. At
present, the Partnership is making arrangements to complete the Matter No. 2A to
produce gas from both the Fort Riley zone and the zones from which the  existing
Matter  No. 2 well  produces.  Prior to  producing  the  Matter  No.  2A,  state
regulatory   rules   require  the  Matter  No.  2  gas  well  to  be  abandoned.
Consequently,  it is expected to be several  weeks  before the Matter No. 2A gas
well can be in actual  operation.  Additionally,  the Partnership  believes that
continued  operation  of the Matter No. 2A for perhaps  several  months could be
necessary to determine the  probability  of attempting  additional  wells in the
Fort  Riley.  No  estimate  is  currently  possible  of the  ultimate  number of
additional  wells, if any, that may be attempted to test the Fort Riley zone. No
estimate of the amount of increased reserves, if any, is currently possible. The
Partnership  also  completed  an  additional  100% owned  Kansas  well to better
compete with adjoining wells of others for the existing gas reserves.

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:  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.


     Item 6. Exhibits  and  Reports  on Form 8-K:
         a)  Exhibit   3 -  Certificate of Amendment
             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:August 8, 1997                    /s/ Kathleen A. Rawlings
                                       Kathleen A. Rawlings
                                       Controller (Principal Accounting Officer)