FORM 10-K405

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

For the fiscal year ended December 31, 1999

Commission File Number 2-92702    (1985-1 Program)
                       2-92702-01 (1985-2 Program)

                         DYCO 1985 OIL AND GAS PROGRAMS
                           (TWO LIMITED PARTNERSHIPS)
             (Exact name of registrant as specified in its charter)

                                            41-1498087 (1985-1 Program)
           Minnesota                        41-1498086 (1985-2 Program)
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                 Identification Number)

         Samson Plaza
   Two West Second Street
        Tulsa, Oklahoma
     (Address of principal                              74103
      executive offices)                             (Zip Code)

Registrant's telephone number, including area code: (918) 583-1791

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

Securities registered pursuant to Section 12(g) of the Act:
      Units of limited partnership interest

      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 the
filing requirements for the past 90 days. Yes [X] No [ ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of this Form 10-K405 or any  amendment to
this Form 10-K405. [X]

      The units of  limited  partnership  are not  publicly  traded,  therefore,
registrant cannot compute the aggregate market value of the voting units held by
non-affiliates of the registrant.

      DOCUMENTS INCORPORATED BY REFERENCE:  None.



                                      -1-
<PAGE>





                                  FORM 10-K405

                         DYCO 1985 OIL AND GAS PROGRAMS
                      (Two Minnesota limited partnerships)


                                TABLE OF CONTENTS
PART I.........................................................................3
      ITEM 1.   BUSINESS.......................................................3
      ITEM 2.   PROPERTIES.....................................................7
      ITEM 3.   LEGAL PROCEEDINGS.............................................14
      ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS...........14

PART II.......................................................................14
      ITEM 5.   MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP UNITS
                AND RELATED LIMITED PARTNER MATTERS...........................14
      ITEM 6.   SELECTED FINANCIAL DATA.......................................15
      ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS...........................18
      ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                ABOUT MARKET RISK.............................................25
      ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...................26
      ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE...........................49

PART III......................................................................49
      ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............49
      ITEM 11.  EXECUTIVE COMPENSATION........................................50
      ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                AND MANAGEMENT ...............................................55
      ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................55

PART IV.......................................................................57
      ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                ON FORM 8-K ..................................................57

SIGNATURES....................................................................60




                                      -2-
<PAGE>



                                     PART I

ITEM 1.    BUSINESS

      General

      The Dyco Oil and Gas  Program  1985-1  Limited  Partnership  (the  "1985-1
Program") and Dyco Oil and Gas Program 1985-2 Limited  Partnership  (the "1985-2
Program")  (collectively,  the  "Programs") are Minnesota  limited  partnerships
engaged in the  production of oil and gas. The 1985-1 Program and 1985-2 Program
commenced  operations on April 1, 1985 and August 26, 1985,  respectively,  with
the  primary   financial   objective  of  investing   their  limited   partners'
subscriptions in the drilling of oil and gas prospects and then  distributing to
their  limited  partners all  available  cash flow from the  Program's  on-going
production operations. Dyco Petroleum Corporation ("Dyco") serves as the General
Partner of the  Programs.  See "Item 2.  Properties"  for a  description  of the
Programs' reserves and properties.

      The limited partnership  agreements for each of the Programs (the "Program
Agreements")  provide that limited  partners  are  allocated  99% of all Program
costs and revenues and Dyco, as General Partner,  is allocated 1% of all Program
costs and revenues.  Included in such costs is each Program's  reimbursement  to
Dyco of the Program's proportionate share of Dyco's geological, engineering, and
general and administrative expenses.

      Dyco  currently  serves as General  Partner  of 31  limited  partnerships,
including the Program.  Dyco is a wholly-owned  subsidiary of Samson  Investment
Company.  Samson  Investment  Company  and its various  corporate  subsidiaries,
including Dyco, (collectively, "Samson") are primarily engaged in the production
and  development of and exploration for oil and gas reserves and the acquisition
and  operation of  producing  properties.  At December  31,  1999,  Samson owned
interests in approximately  14,000 oil and gas wells located in 17 states of the
United States and the countries of Canada,  Venezuela,  and Russia.  At December
31, 2000,  Samson operated  approximately  3,400 oil and gas wells located in 15
states of the United States, as well as Canada, Venezuela, and Russia.

      As limited  partnerships,  the Programs  have no officers,  directors,  or
employees. They rely instead on the personnel of Dyco and Samson. As of March 1,
2000,  Samson employed  approximately  920 persons.  No employees are covered by
collective bargaining agreements, and management believes that Samson provides a
sound employee relations  environment.  For information  regarding the executive
officers  of Dyco,  see  "Item  10.  Directors  and  Executive  Officers  of the
Registrant."

      Dyco's and the Programs'  principal place of business is located at Samson
Plaza, Two West Second Street, Tulsa, Oklahoma




                                      -3-
<PAGE>




74103, and their telephone number is (918) 583-1791 or (800) 283-1791.

      Funding

      Although the Program  Agreements  permit the Programs to incur borrowings,
each  Program's  operations  and  expenses  are  currently  funded  out of  each
Program's  revenues  from oil and gas sales.  Dyco may,  but is not required to,
advance  funds to each of the Programs for the same  purposes for which  Program
borrowings are authorized.


      Principal Products Produced and Services Rendered

      The Programs' sole business is the  development  and production of oil and
gas  with a  concentration  on  gas.  The  Programs  do not  hold  any  patents,
trademarks,  licenses,  or  concessions  and are not a party  to any  government
contracts.  The  Programs  have no backlog of orders and do not  participate  in
research and development activities. The Programs are not presently encountering
shortages of oilfield tubular goods, compressors,  production material, or other
equipment.


      Oil, Gas, and Environmental Control Regulations

      Regulation  of Production  Operations -- The  production of oil and gas is
subject to  extensive  federal and state laws and  regulations  governing a wide
variety of matters, including the drilling and spacing of wells, allowable rates
of  production,  prevention  of  waste  and  pollution,  and  protection  of the
environment.  In  addition  to the direct  costs  borne in  complying  with such
regulations,  operations and revenues may be impacted to the extent that certain
regulations limit oil and gas production to below economic levels.

      Regulation  of Sales and  Transportation  of Oil and Gas -- Sales of crude
oil and condensate are made by the Programs at market prices and are not subject
to price controls. The sale of gas may be subject to both federal and state laws
and  regulations.  The provisions of these laws and  regulations are complex and
affect all who  produce,  resell,  transport,  or purchase  gas,  including  the
Programs.  Although virtually all of the Programs' gas production is not subject
to  price  regulation,   other  regulations   affect  the  availability  of  gas
transportation services and the ability of gas consumers to continue to purchase
or use gas at current levels. Accordingly,  such regulations may have a material
effect  on the  Programs'  operations  and  projections  of  future  oil and gas
production and revenues.

      Future  Legislation --  Legislation  affecting the oil and gas industry is
under constant review for amendment or expansion.



                                      -4-
<PAGE>



Because  such laws and  regulations  are  frequently  amended or  reinterpreted,
management  is unable to  predict  what  additional  energy  legislation  may be
proposed or enacted or the future cost and impact of complying  with existing or
future regulations.

      Regulation of the  Environment -- The Programs'  operations are subject to
numerous laws and  regulations  governing  the  discharge of materials  into the
environment or otherwise relating to environmental  protection.  Compliance with
such  laws  and  regulations,   together  with  any  penalties   resulting  from
noncompliance,  may increase the cost of the Programs'  operations or may affect
the  Programs'  ability  to  timely  complete  existing  or  future  activities.
Management  anticipates  that various local,  state,  and federal  environmental
control agencies will have an increasing impact on oil and gas operations.


      Significant Customers

      Purchases  of gas by El Paso  Energy  Marketing  Company  ("El  Paso") and
Sanguine, Ltd. accounted for approximately 82.2% and 15.5%, respectively, of the
1985-1  Program's oil and gas revenues  during the year ended December 31, 1999.
Purchases  of gas by El Paso  accounted  for  approximately  66.7% of the 1985-2
Program's oil and gas revenues  during the year ended  December 31, 1999. In the
event of  interruption  of  purchases  by  these  significant  customers  or the
cessation or material change in availability  of open-access  transportation  by
the Programs' pipeline  transporters,  the Programs may encounter  difficulty in
marketing  their  gas and in  maintaining  historic  sales  levels.  Alternative
purchasers or transporters may not be readily available.

      The Programs'  principal  customers for crude oil  production are refiners
and other companies which have pipeline facilities near the producing properties
of the Programs.  Purchases of oil by EOTT Energy Operating Limited  Partnership
and  Mobil  Oil  Corporation   accounted  for  approximately  15.7%  and  13.4%,
respectively, of the 1985-2 Program's oil and gas revenues during the year ended
December  31,  1999.  In the  event  pipeline  facilities  are not  conveniently
available to  production  areas,  crude oil is usually  trucked by purchasers to
storage facilities.


      Competition and Marketing

      The  domestic  oil and gas  industry is highly  competitive,  with a large
number of companies and  individuals  engaged in the exploration and development
of oil and gas properties. The ability of the Programs to produce and market oil
and gas profitably depends on a number of factors that are beyond the control of
the Programs.  These factors include worldwide political instability (especially
in oil-producing regions), United Nations export embargoes, the supply and price
of foreign



                                      -5-
<PAGE>



imports  of oil and gas,  the level of  consumer  product  demand  (which can be
heavily influenced by weather patterns),  government  regulations and taxes, the
price and availability of alternative  fuels, the overall economic  environment,
and the availability and capacity of transportation  and processing  facilities.
The  effect of these  factors on future oil and gas  industry  trends  cannot be
accurately predicted or anticipated.

      The most important variable affecting the Programs' revenues is the prices
received for the sale of oil and gas.  Predicting future prices is not possible.
Concerning past trends,  average yearly wellhead gas prices in the United States
have been volatile for many years.  Over the past ten years such average  prices
have  generally  been in the  $1.40 to  $2.40  per Mcf  range.  Gas  prices  are
currently in the upper end of this range.

      Substantially  all of the  Programs'  gas  reserves  are being sold on the
"spot  market."  Prices on the spot  market  are  subject to wide  seasonal  and
regional pricing  fluctuations due to the highly  competitive nature of the spot
market. In addition,  such spot market sales are generally  short-term in nature
and are dependent  upon the  obtaining of  transportation  services  provided by
pipelines.  Spot prices for the Programs' gas increased from approximately $1.93
per Mcf at December  31,  1998 to  approximately  $2.24 per Mcf at December  31,
1999.  Such prices  were on an MMBTU  basis and differ from the prices  actually
received  by the  Programs  due  to  transportation  and  marketing  costs,  BTU
adjustments, and regional price and quality differences.

      For the past ten years,  average  oil prices  have  generally  been in the
$16.00 to $24.00 per barrel  range,  but have been  extremely  volatile over the
past two  years.  Due to  global  consumption  and  supply  trends  as well as a
slowdown in Asian energy demand,  oil prices in late 1997 and early 1998 reached
historically low levels,  dropping to as low as approximately  $9.00 per barrel.
However,  production  curtailment  agreements among major oil producing  nations
have  caused  recent  oil  prices  to climb to over  $30.00  per  barrel in some
markets.  It is not known  whether  this  trend  will  continue.  Prices for the
Programs' oil increased from approximately $9.50 per barrel at December 31, 1998
to approximately $22.75 per barrel at December 31, 1999.

      Future  prices  for both oil and gas will  likely  be  different  from the
prices in effect on December 31, 1999.  Management is unable to predict  whether
future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.




                                      -6-
<PAGE>




      Insurance Coverage

      The  Programs are subject to all of the risks inherent in the  exploration
for and production of oil and gas,  including  blowouts,  pollution,  fires, and
other casualties.  The Programs maintain  insurance coverage as is customary for
entities  of a  similar  size  engaged  in  operations  similar  to  that of the
Programs, but losses can occur from uninsurable risks or in amounts in excess of
existing  insurance  coverage.  The  occurrence  of an event  which is not fully
covered  by  insurance  could have a material  adverse  effect on the  Programs'
financial condition and results of operations.


ITEM 2.    PROPERTIES

      Well Statistics

      The  following  table sets forth the  numbers of gross and net  productive
wells of the Programs as of December 31, 1999.

                               Well Statistics(1)

                             As of December 31, 1999

                                         1985-1   1985-2
                                         Program  Program
                                         -------  -------

          Gross productive wells(2):
            Oil                              -        3
            Gas                             14        8
                                            --       --
              Total                         14       11

          Net productive wells(3):
            Oil                             -      1.12
            Gas                           1.73      .87
                                          ----     ----
              Total                       1.73     1.99
----------

(1)   The designation of a well as an oil well or gas well is made by Dyco based
      on the relative amount of oil and gas reserves for the well. Regardless of
      a well's oil or gas designation,  it may produce oil, gas, or both oil and
      gas.
(2)   As used  throughout  this Annual  Report on Form 10-K  ("Annual  Report"),
      "Gross  Well" refers to a well in which a working  interest is owned.  The
      number  of gross  wells is the  total  number  of wells in which a working
      interest is owned.
(3)   As used throughout this Annual Report, "Net Well" refers to the sum of the
      fractional working interests owned in gross




                                      -7-
<PAGE>




      wells. For example,  a 15% working interest in a well represents one Gross
      Well, but 0.15 Net Well.


      Drilling Activities

      The Programs  participated  in no drilling  activities  for the year ended
      December 31, 1999


      Oil and Gas Production, Revenue, and Price History

      The following table sets forth certain historical  information  concerning
the oil  (including  condensates)  and  gas  production,  net of all  royalties,
overriding royalties, and other third party interests, of the Programs, revenues
attributable to such production, and certain price and cost information.


                                      -8-
<PAGE>



                              Net Production Data

                                             Year Ended December 31,
                                       ------------------------------------
                                          1999        1998           1997
                                        ---------   --------       --------
1985-1 Program:
--------------
   Production:
     Oil (Bbls)(1)                          292          283           422(2)
     Gas (Mcf)(3)                       141,030      165,027       200,882

   Oil and gas sales:
     Oil                               $  4,543     $  3,700     ($ 24,012)(2)
     Gas                                288,770      313,020       458,588
                                        -------      -------       -------
       Total                           $293,313     $316,720      $434,576
                                        =======      =======       =======

   Total direct operating expenses(4)  $ 91,421     $108,815      $ 93,649
                                        =======      =======       =======

   Direct operating expenses as a
     percentage of oil and gas sales      31.2%        34.4%         21.5%

   Average sales price:
     Per barrel of oil                   $15.56       $13.07        $19.69(2)
     Per Mcf of gas                        2.05         1.90          2.28

   Direct operating expenses per
     equivalent Mcf of gas(5)            $  .64       $  .65        $  .46







                                      -9-
<PAGE>



                                             Year Ended December 31,
                                       ------------------------------------
                                          1999         1998         1997
                                        ---------    --------     --------
1985-2 Program:
--------------
   Production:
     Oil (Bbls)(1)                        2,624        2,397         2,963(6)
     Gas (Mcf)(3)                        84,745       48,746        59,797

   Oil and gas sales:
     Oil                               $ 43,843     $ 30,679      $ 44,854(6)
     Gas                                155,186       95,421       143,029
                                        -------      -------       -------
       Total                           $199,029     $126,100      $187,883
                                        =======      =======       =======

   Total direct operating expenses(4)  $ 99,111     $ 65,880      $ 47,231
                                        =======      =======       =======
   Direct operating expenses as a
     percentage of oil and gas sales      49.8%        52.2%         25.1%

   Average sales price:
     Per barrel of oil                   $16.71       $12.80        $18.87(6)
     Per Mcf of gas                        1.83(7)      1.96          2.39

   Direct operating expenses per
     equivalent Mcf of gas(5)            $  .99       $ 1.04        $  .61

-------------

(1)   As used throughout this Annual Report, "Bbls" refers to barrels of 42 U.S.
      gallons and  represents  the basic unit for  measuring  the  production of
      crude oil and condensate oil.
(2)   In  1997,  the  1985-1  Program  recognized  oil  sales  related  to  1997
      production  totaling  $8,308.  Such oil sales  were  offset by a refund of
      $32,320 made by the 1985-1  Program in 1997 to the  operators of two wells
      related to an  overpayment  for oil sales the 1985-1  Program  received in
      1995.  The oil volumes and average price per barrel listed above are based
      on actual production and sales in 1997.
(3)   As used  throughout  this Annual  Report,  "Mcf" refers to volume of 1,000
      cubic feet under  prescribed  conditions of pressure and  temperature  and
      represents the basic unit for measuring the production of gas.
(4)   Includes lease operating expenses and production taxes.
(5)   Oil production is converted to gas  equivalents at the rate of six Mcf per
      barrel, representing the estimated relative energy content of gas and oil,
      which rate is not  necessarily  indicative of the  relationship of oil and
      gas prices.  The  respective  prices of oil and gas are affected by market
      and other factors in addition to relative energy content.


                                      -10-
<PAGE>




(6)   In  1997,  the  1985-2  Program  recognized  oil  sales  related  to  1997
      production  totaling  $55,908.  Such oil sales were  offset by a refund of
      $11,054  made by the 1985-2  Program in 1997 to the  operator  of one well
      related to an  overpayment  for oil sales the 1985-2  Program  received in
      1995.  The oil volumes and average price per barrel listed above are based
      on actual production and sales in 1997.
(7)   Includes a positive gas balancing adjustment on one well at $1.54 per Mcf.
      Without  this  adjustment,  the  average gas price in 1999 would have been
      $2.12 per Mcf.

      Proved Reserves and Net Present Value

      The following table sets forth the Programs'  estimated proved oil and gas
reserves and net present value  therefrom as of December 31, 1999.  The schedule
of  quantities of proved oil and gas reserves was prepared by Dyco in accordance
with the rules prescribed by the Securities and Exchange Commission (the "SEC").
Certain reserve  information was reviewed by Ryder Scott Company,  L.P.  ("Ryder
Scott"), an independent petroleum engineering firm.
As used  throughout  this  Annual  Report,  "proved  reserves"  refers  to those
estimated  quantities of crude oil, gas, and gas liquids  which  geological  and
engineering  data  demonstrate  with  reasonable  certainty to be recoverable in
future  years from known oil and gas  reservoirs  under  existing  economic  and
operating conditions.

      Net present  value  represents  estimated  future gross cash flow from the
production and sale of proved reserves,  net of estimated oil and gas production
costs (including  production  taxes, ad valorem taxes, and operating  expenses),
and estimated future development costs, discounted at 10% per annum. Net present
value  attributable to the Programs' proved reserves was calculated on the basis
of current costs and prices at December 31, 1999. Such prices were not escalated
except in  certain  circumstances  where  escalations  were  fixed  and  readily
determinable in accordance with applicable contract provisions.  The prices used
by Dyco in  calculating  the net present  value  attributable  to the  Programs'
proved  reserves  do not  necessarily  reflect  market  prices  for  oil and gas
production  subsequent to December 31, 1999. Year-end prices have generally been
higher than prices during the rest of the year.  There can be no assurance  that
the prices used in  calculating  the net present value of the  Programs'  proved
reserves at December 31, 1999 will actually be realized for such production.

      The process of  estimating  oil and gas  reserves  is  complex,  requiring
significant  subjective  decisions in the  evaluation  of available  geological,
engineering,  and  economic  data  for  each  reservoir.  The  data  for a given
reservoir may change substantially over time as a result of, among other things,
additional development activity, production history, and viability of production
under varying economic conditions;  consequently, it is reasonably possible that
material revisions



                                      -11-
<PAGE>



to existing  reserve  estimates  may occur in the near  future.  Although  every
reasonable effort has been made to ensure that these reserve estimates represent
the most  accurate  assessment  possible,  the  significance  of the  subjective
decisions  required and variances in available data for various  reservoirs make
these  estimates  generally  less  precise  than other  estimates  presented  in
connection with financial statement disclosures.


                               Proved Reserves and
                               Net Present Values
                              From Proved Reserves

                           As of December 31, 1999(1)

          1985-1 Program:
          --------------

            Estimated proved reserves:
              Gas (Mcf)                           772,092
              Oil and liquids (Bbls)                1,435

            Net present value
              (discounted at 10% per annum)      $665,661

          1985-2 Program:
          --------------

            Estimated proved reserves:
              Gas (Mcf)                           312,855
              Oil and liquids (Bbls)               13,401

            Net present value
              (discounted at 10% per annum)      $380,798

--------------

(1)   Includes certain gas balancing adjustments which cause the gas volumes and
      net present value to differ from the reserve reports  prepared by Dyco and
      reviewed by Ryder Scott.


      No estimates of the proved  reserves of the Programs  comparable  to those
included  herein have been included in reports to any federal  agency other than
the SEC.  Additional  information  relating to the Programs'  proved reserves is
contained in Note 4 to the Programs' financial statements, included in Item 8 of
this Annual Report.



                                      -12-
<PAGE>




      Significant Properties

                                 1985-1 Program
                                 --------------

      As of December 31, 1999, the 1985-1 Program's  properties  consisted of 14
gross (1.73 net) productive  wells.  The 1985-1 Program also owned a non-working
interest in two additional  wells.  Affiliates of the 1985-1  Program  operate 7
(44%) of its total wells.  All of the 1985-1  Program's  reserves are located in
the  Anadarko  Basin of western  Oklahoma and the Texas  panhandle,  which is an
established oil and gas producing basin.

                                 1985-2 Program
                                 ---------------

      As of December 31, 1999, the 1985-2 Program's  properties  consisted of 11
gross (1.99 net) productive  wells.  The 1985-2 Program also owned a non-working
interest in two additional  wells.  Affiliates of the 1985-2  Program  operate 6
(46%) of its total wells.  All of the 1985-2  Program's  properties  are located
onshore  in the  continental  United  States.  Substantially  all of the  1985-2
Program's reserves are located in the Anadarko Basin.

      As of December 31, 1999, the 1985-2  Program's  properties in the Anadarko
Basin  consisted of 11 gross (1.99 net) wells.  The 1985-2  Program also owned a
non-working interest in one additional well in the Anadarko Basin. Affiliates of
the 1985-2  Program  operate 5 (42%) of its wells.  As of December 31, 1999, the
1985-2  Program had  estimated  total proved  reserves in the Anadarko  Basin of
approximately  308,305 Mcf of gas and approximately 13,401 barrels of crude oil,
with a present value  (discounted at 10% per annum) of estimated future net cash
flow of approximately $377,288.


      Title to Oil and Gas Properties

      Management believes that the Programs have satisfactory title to their oil
and  gas  properties.  Record  title  to  substantially  all  of  the  Programs'
properties is held by Dyco as nominee.

      Title  to the  Programs'  properties  is  subject  to  customary  royalty,
overriding  royalty,   carried,   working,   and  other  similar  interests  and
contractual  arrangements  customary in the oil and gas  industry,  to liens for
current taxes not yet due, and to other  encumbrances.  Management believes that
such burdens do not materially detract from the value of such properties or from
the Programs'  interest  therein or materially  interfere  with their use in the
operation of the Programs' business.




                                      -13-
<PAGE>





ITEM 3.    LEGAL PROCEEDINGS

      To the knowledge of the management of Dyco and the Programs, neither Dyco,
the Programs,  nor the Programs'  properties are subject to any litigation,  the
results  of which  would  have a  material  effect  on the  Programs'  or Dyco's
financial condition or operations.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF LIMITED PARTNERS

      There were no  matters  submitted  to a vote of the  limited  partners  of
either Program during 1999.


                                    PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP UNITS AND
           RELATED LIMITED PARTNER MATTERS

      The Programs do not have an established  trading market for their units of
limited  partnership  interest  ("Units").  Pursuant to the terms of the Program
Agreements,  Dyco,  as  General  Partner,  is  obligated  to  annually  issue  a
repurchase  offer which is based on the  estimated  future net revenues from the
Programs'  reserves  and is  calculated  pursuant  to the  terms of the  Program
Agreements.  Such repurchase  offer is recalculated  monthly in order to reflect
cash  distributions  made to the limited partners and extraordinary  events. The
following table sets forth, for the periods  indicated,  Dyco's repurchase offer
per Unit and the amount of the  Programs'  cash  distributions  per Unit for the
same period.  For purposes of this Annual Report,  a Unit  represents an initial
subscription of $5,000 to a Program.

                                 1985-1 PROGRAM
                                 --------------
                                       Repurchase       Cash
                                          Price     Distributions
                                       ----------   -------------
          1998:
            First Quarter                 $ 94           $25
            Second Quarter                  69             -
            Third Quarter                  123             -
            Fourth Quarter                 123            25

          1999:
            First Quarter                 $ 98           $ -
            Second Quarter                  98             -
            Third Quarter                  156            25
            Fourth Quarter                 131             -

          2000:
            First Quarter                 $131           $25




                                      -14-
<PAGE>




                                 1985-2 PROGRAM
                                 --------------

                                       Repurchase       Cash
                                          Price     Distributions
                                       ----------   -------------
          1998:
            First Quarter                 $56            $ -
            Second Quarter                 56             20
            Third Quarter                  64              -
            Fourth Quarter                 64              -

          1999:
            First Quarter                 $64            $ -
            Second Quarter                 64              -
            Third Quarter                  64              -
            Fourth Quarter                 64              -

          2000:
            First Quarter                 $64            $20

-----------

      As of March 1, 2000,  the 1985-1 Program had 4,100 Units  outstanding  and
approximately  1,500 Limited  Partners of record.  The 1985-2  Program had 4,330
Units outstanding and approximately 1,450 Limited Partners of record.


ITEM 6.    SELECTED FINANCIAL DATA

      The following  table  presents  selected  financial data for the Programs.
This data should be read in  conjunction  with the  financial  statements of the
Programs,  and the respective notes thereto,  included  elsewhere in this Annual
Report. See "Item 8. Financial Statements and Supplementary Data."





                                      -15-
<PAGE>

<TABLE>
<CAPTION>



                                        1985-1 Program
                                        --------------
                                                            December 31,
                                          -------------------------------------------------
                                            1999      1998      1997      1996       1995
                                          --------  --------  --------  --------   --------
<S>                                       <C>       <C>       <C>       <C>        <C>
Summary of Operations:
   Oil and gas sales                      $293,313  $316,720  $434,576  $408,826   $414,166
   Total revenues                          295,675   319,820   438,162   411,171    416,689

   Lease operating expenses                 70,168    86,362    58,594    63,559    130,367
   Production taxes                         21,253    22,453    35,055    29,783     38,928
   General and administrative
     expenses                               53,142    53,554    57,406    55,169     55,314
   Depreciation, depletion, and
     amortization of oil and gas
     properties                             18,737    25,912    34,859    27,369     57,994
   Impairment provision                       -         -         -         -        45,262

   Net income                              132,375   131,539   252,248   235,291     88,824
     per Unit                                31.97     31.77     60.91     56.82      21.45
   Cash distributions                      103,525   207,050   351,985   186,345    124,230
     per Unit                                   25        50        85        45         30

Summary Balance Sheet Data:
   Total assets                            232,383   210,519   283,653   375,408    329,229
   Partners' capital                       193,392   164,542   240,053   339,790    290,844

</TABLE>






                                      -16-
<PAGE>

<TABLE>
<CAPTION>




                                        1985-2 Program
                                        --------------

                                                            December 31,
                                        ---------------------------------------------------
                                          1999       1998       1997      1996       1995
                                        --------   --------   --------  --------   --------
<S>                                     <C>        <C>        <C>       <C>        <C>
Summary of Operations
   Oil and gas sales                    $199,029   $126,100   $187,883  $230,192   $249,234
  Total revenues                         199,814    143,847    189,554   232,494    250,411
   Lease operating expenses               85,341     56,430     33,442    61,178    108,975
   Production taxes                       13,770      9,450     13,789    16,814     21,572
   General and administrative
     expenses                             50,768     51,504     55,613    53,296     53,755
   Depreciation, depletion, and
     amortization of oil and gas
     properties                            6,662      8,457     11,610     9,911     23,571

   Net income                             43,273     18,006     75,100    91,295     42,538
     per Unit                               9.89       4.12      17.17     20.87       9.73
   Cash distributions                        -       87,480    109,350   153,090       -
     per Unit                                -           20         25        35       -

Summary Balance Sheet Data:
   Total assets                          172,887    134,196    201,447   244,561    306,398
   Partners' capital                     165,013    121,740    191,214   225,464    287,259

</TABLE>



                                      -17-
<PAGE>




ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS

      Use of Forward-Looking Statements and Estimates

      This Annual Report contains certain forward-looking  statements. The words
"anticipate,"  "believe,"  "expect,"  "plan," "intend,"  "estimate,"  "project,"
"could," "may," and similar expressions are intended to identify forward-looking
statements.  Such statements reflect  management's current views with respect to
future  events and  financial  performance.  This Annual  Report  also  includes
certain information which is, or is based upon, estimates and assumptions.  Such
estimates and assumptions  are  management's  efforts to accurately  reflect the
condition and operation of the Programs.

      Use of  forward-looking  statements and estimates and assumptions  involve
risks and uncertainties which include, but are not limited to, the volatility of
oil and gas prices, the uncertainty of reserve  information,  the operating risk
associated with oil and gas properties  (including the risk of personal  injury,
death, property damage, damage to the well or producing reservoir, environmental
contamination,  and other  operating  risks),  the  prospect of changing tax and
regulatory laws, the availability and capacity of processing and  transportation
facilities,  the  general  economic  climate,  the  supply  and price of foreign
imports of oil and gas, the level of consumer product demand,  and the price and
availability  of  alternative  fuels.  Should  one or more  of  these  risks  or
uncertainties  occur  or  should  estimates  or  underlying   assumptions  prove
incorrect,  actual  conditions or results may vary materially and adversely from
those stated, anticipated, believed, estimated, or otherwise indicated.


      General Discussion

      The following  general  discussion  should be read in conjunction with the
analysis of results of operations  provided below.  The most important  variable
affecting the Programs'  revenues is the prices received for the sale of oil and
gas. Predicting future prices is not possible.  Concerning past trends,  average
yearly  wellhead  gas prices in the United  States have been  volatile  for many
years.  Over the past ten years such average  prices have  generally been in the
$1.40 to $2.40 per Mcf range.  Gas prices are currently in the upper end of this
range.

      Substantially  all of the  Programs'  gas  reserves  are being sold on the
"spot  market."  Prices on the spot  market  are  subject to wide  seasonal  and
regional pricing  fluctuations due to the highly  competitive nature of the spot
market. In addition,  such spot market sales are generally  short-term in nature
and are dependent  upon the  obtaining of  transportation  services  provided by
pipelines. Spot prices for the Programs' gas increased from




                                      -18-
<PAGE>




approximately  $1.93 per Mcf at December 31, 1998 to approximately $2.24 per Mcf
at  December  31,  1999.  Such prices were on an MMBTU basis and differ from the
prices  actually  received by the Programs due to  transportation  and marketing
costs, BTU adjustments, and regional price and quality differences.

      For the past ten years,  average  oil prices  have  generally  been in the
$16.00 to $24.00 per barrel  range,  but have been  extremely  volatile over the
past two  years.  Due to  global  consumption  and  supply  trends  as well as a
slowdown in Asian energy demand,  oil prices in late 1997 and early 1998 reached
historically low levels,  dropping to as low as approximately  $9.00 per barrel.
However,  production  curtailment  agreements among major oil producing  nations
have  caused  recent  oil  prices  to climb to over  $30.00  per  barrel in some
markets.  It is not known  whether  this  trend  will  continue.  Prices for the
Programs' oil increased from approximately $9.50 per barrel at December 31, 1998
to approximately $22.75 per barrel at December 31, 1999.

      Future  prices  for both oil and gas will  likely  be  different  from the
prices in effect on December 31, 1999.  Management is unable to predict  whether
future oil and gas prices will (i) stabilize, (ii) increase, or (iii) decrease.


      Results of Operations

                                 1985-1 Program
                                 ---------------

                      Year Ended December 31, 1999 Compared
                         to Year Ended December 31, 1998
                      -------------------------------------

      Total oil and gas sales  decreased  $23,407  (7.4%) in 1999 as compared to
1998.  Of this  decrease,  approximately  $46,000  was  related to a decrease in
volumes of gas sold.  This  decrease  was  partially  offset by an  increase  of
approximately  $21,000  related to an increase in the average price of gas sold.
Volumes of oil sold  increased 9 barrels,  while  volumes of gas sold  decreased
23,997 Mcf in 1999 as compared to 1998.  The decrease in volumes of gas sold was
primarily due to (i) the 1985-1 Program receiving a reduced  percentage of sales
in 1999 on one well  due to the  1985-1  Program's  overproduced  gas  balancing
position in that well and (ii) normal  declines in  production.  Average oil and
gas prices  increased to $15.56 per barrel and $2.05 per Mcf,  respectively,  in
1999 from $13.07 per barrel and $1.90 per Mcf, respectively, in 1998.

      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  decreased  $17,394 (16.0%) in 1999 as compared to 1998. This
decrease  was  primarily  due to (i) a  decrease  in  lease  operating  expenses
associated with the decrease




                                      -19-
<PAGE>




in volumes of gas sold and (ii) a decrease in production  taxes  associated with
the decrease in oil and gas sales.  As a percentage of oil and gas sales,  these
expenses decreased to 31.2% in 1999 from 34.4% in 1998.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $7,175  (27.7%)  in 1999 as  compared  to  1998.  This  decrease  was
primarily  due to (i) the  decrease  in  volumes  of gas  sold,  (ii) an  upward
revision in the  estimate of remaining  gas  reserves at December 31, 1999,  and
(iii) an increase in the gas price used in the valuation of reserves at December
31, 1999 as compared to December 31, 1998. As a percentage of oil and gas sales,
this  expense  decreased  to 6.4% in 1999  from  8.2% in 1998.  This  percentage
decrease was primarily due to the dollar  decrease in  depreciation,  depletion,
and amortization.

      General and administrative  expenses remained  relatively constant in 1999
as  compared  to 1998.  As a  percentage  of oil and gas sales,  these  expenses
increased to 18.1% in 1999 from 16.9% in 1998.



                      Year Ended December 31, 1998 Compared
                         to Year Ended December 31, 1997
                      -------------------------------------

      Total oil and gas sales decreased  $117,856 (27.1%) in 1998 as compared to
1997.  Of this  decrease,  approximately  $82,000  was  related to a decrease in
volumes of gas sold and  approximately  $64,000 was related to a decrease in the
average price of gas sold.  These decreases were partially offset by an increase
of  approximately  $32,000 related to the 1985-1  Program's  refund in 1997 of a
prior oil  overpayment to the  purchaser.  Volumes of oil and gas sold decreased
139  barrels  and 35,855 Mcf,  respectively,  in 1998 as  compared to 1997.  The
decrease in the  volumes of gas sold  resulted  primarily  from  positive  prior
period  volume  adjustments  made  during 1997 by the  purchaser  on four wells.
Average  oil and gas  prices  decreased  to $13.07 per barrel and $1.90 per Mcf,
respectively, in 1998 from $19.69 per barrel and $2.28, respectively, per Mcf in
1997.

      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  increased  $15,166 (16.2%) in 1998 as compared to 1997. This
increase resulted primarily from credits received during 1997 from the operators
of two sold wells for prior period lease operating  expenses.  This increase was
partially  offset by a decrease in production taxes associated with the decrease
in oil and gas  sales.  As a  percentage  of oil and gas sales,  these  expenses
increased to 34.4% in 1998 from 21.5% in 1997  primarily due to the decreases in
the  average  prices of oil and gas sold and the dollar  increase in oil and gas
production expenses.




                                      -20-
<PAGE>





      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $8,947  (25.7%) in 1998 as compared to 1997.  This decrease  resulted
primarily from the decreases in volumes of oil and gas sold and upward revisions
in the  estimates of remaining  oil and gas reserves at December 31, 1998.  As a
percentage of oil and gas sales, these expenses remained  relatively constant at
8.2% in 1998 and 8.0% in 1997.  Any increase in this  percentage  related to the
decreases in the average prices of oil and gas sold was substantially  offset by
a decrease related to the 1998 upward reserve revisions.

      General and  administrative  expenses  decreased  $3,852 (6.7%) in 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 16.9% in 1998 from 13.2% in 1997,  primarily  due to the  decrease in oil and
gas sales.


                                 1985-2 Program
                                 ---------------

                      Year Ended December 31, 1999 Compared
                         to Year Ended December 31, 1998
                      -------------------------------------

      Total oil and gas sales  increased  $72,929 (57.8%) in 1999 as compared to
1998.  Of this  increase,  approximately  $70,000  was related to an increase in
volumes of gas sold and approximately  $10,000 was related to an increase in the
average price of oil sold.  These increases were partially  offset by a decrease
of approximately $11,000 related to a decrease in the average price of gas sold.
Volumes of oil and gas sold increased 227 barrels and 35,999 Mcf,  respectively,
in 1999 as compared to 1998.  The increase in volumes of gas sold was  primarily
due to a positive gas balancing  adjustment  made during 1999 by the operator on
one well.  Average oil prices increased to $16.71 per barrel in 1999 from $12.80
per barrel in 1998.  Average gas prices  decreased to $1.83 per Mcf in 1999 from
$1.96 per Mcf in 1998.  The $1.83 per Mcf average  gas price in 1999  includes a
positive gas  balancing  adjustment  on one well at $1.54 per Mcf.  Without this
adjustment, the average gas price in 1999 would have been $2.12 per Mcf.

      During the fourth quarter of 1998, the 1985-2 Program sold for $15,938 two
wells which had no reserves that could be economically  recovered.  The proceeds
from  these  sales  would  have  reduced  the net book  value of the oil and gas
properties  by 30%,  significantly  altering  the 1985-2  Program's  capitalized
cost/proved  reserves  relationship.  Accordingly,  capitalized  costs  were not
reduced and a gain on sale of oil and gas properties of $15,938 was  recognized.
No such sales occurred during 1999.




                                      -21-
<PAGE>




      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  increased  $33,231 (50.4%) in 1999 as compared to 1998. This
increase  was  primarily  due to (i) an  increase  in lease  operating  expenses
associated  with the  increase  in volumes of gas sold and (ii) an  increase  in
production  taxes  associated  with  the  increase  in oil and gas  sales.  As a
percentage of oil and gas sales,  these expenses decreased to 49.8% in 1999 from
52.2% in 1998.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $1,795  (21.2%)  in 1999 as  compared  to  1998.  This  decrease  was
primarily due to (i) upward  revisions in the estimates of remaining oil and gas
reserves at December 31, 1999 and (ii)  increases in the oil and gas prices used
in the  valuation  of reserves at December  31, 1999 as compared to December 31,
1998. These decreases were partially  offset by an increase  associated with the
increases in volumes of oil and gas sold.  As a percentage of oil and gas sales,
this  expense  decreased  to 3.3% in 1999  from  6.7% in 1998.  This  percentage
decrease was primarily due to the dollar  decrease in  depreciation,  depletion,
and amortization.

      General  and  administrative  expenses  decreased  $736  (1.4%) in 1999 as
compared to 1998. As a percentage of oil and gas sales, these expenses decreased
to 25.5% in 1999 from 40.8% in 1998. This percentage  decrease was primarily due
to the increase in oil and gas sales.


                      Year Ended December 31, 1998 Compared
                         to Year Ended December 31, 1997
                      -------------------------------------

      Total oil and gas sales  decreased  $61,783 (32.9%) in 1998 as compared to
1997. Of this decrease,  approximately $11,000 and $26,000,  respectively,  were
related to  decreases in volumes of oil and gas sold and  approximately  $15,000
and $21,000,  respectively,  were related to decreases in the average  prices of
oil and gas sold.  These  decreases  were  partially  offset by an  increase  of
approximately  $11,000 related to a refund in 1997 of a prior oil overpayment by
the 1985-2 Program. Volumes of oil and gas sold decreased 566 barrels and 11,051
Mcf,  respectively,  in 1998 as compared to 1997. The decrease in volumes of oil
sold resulted primarily from the curtailment of oil sales on one well due to low
oil prices.  The decrease in volumes of gas sold resulted primarily from (i) the
sale of two wells during  1998,  (ii) the 1985-2  Program  receiving a decreased
percentage  of  sales  on one  well  during  1998  due to its  overproduced  gas
balancing  position  in that  well,  and  (iii)  positive  prior  period  volume
adjustments made during 1997 by purchasers on several wells. Average oil and gas
prices decreased to $12.80 per barrel and $1.96 per Mcf,  respectively,  in 1998
from $18.87 per barrel and $2.39 per Mcf, respectively, in 1997.




                                      -22-
<PAGE>





      As discussed in "Liquidity and Capital Resources" below, during the fourth
quarter of 1998 the  1985-2  Program  sold for  $15,938  two wells  which had no
reserves  that could be  economically  recovered.  The proceeds from these sales
would  have  reduced  the net book value of the oil and gas  properties  by 30%,
significantly  altering the 1985-2 Program's  capitalized  cost/proved  reserves
relationship. Accordingly, capitalized costs were not reduced and a gain on sale
of oil and gas  properties  of $15,938 was  recognized.  No such sales  occurred
during 1997.

      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  increased  $18,649 (39.5%) in 1998 as compared to 1997. This
percentage  increase  resulted  primarily from credits received during 1997 from
the operator on one sold well for prior period lease  operating  expenses.  As a
percentage of oil and gas sales,  these expenses increased to 52.2% in 1998 from
25.1% in 1997. This percentage increase was primarily due to the dollar increase
in oil and gas  production  expenses and the decreases in the average  prices of
oil and gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $3,153  (27.2%) in 1998 as compared to 1997.  This decrease  resulted
primarily  from the decreases in volumes of oil and gas sold. As a percentage of
oil and gas sales, this expense increased to 6.7% in 1998 from 6.2% in 1997.

      General and  administrative  expenses  decreased  $4,109 (7.4%) in 1998 as
compared to 1997. As a percentage of oil and gas sales, these expenses increased
to 40.8% in 1998 from 29.6% in 1997. This percentage  increase was primarily due
to the decrease in oil and gas sales.


      Liquidity and Capital Resources

      Net  proceeds  from  operations  less  necessary   operating  capital  are
distributed to the limited  partners on a quarterly  basis.  See "Item 5. Market
for the  Registrant's  Limited  Partnership  Units and Related  Limited  Partner
Matters."  The net proceeds  from  production  are not  reinvested in productive
assets, except to the extent that producing wells are improved, or where methods
are employed to permit more efficient recovery of reserves, thereby resulting in
a positive  economic impact.  Assuming 1999 production  levels for future years,
the 1985-1 and 1985-2 Programs'  proved reserve  quantities at December 31, 1999
would have remaining lives of approximately 5.5 and 3.7 years, respectively, for
gas reserves and 4.9 and 5.1 years,  respectively,  for oil  reserves.  However,
since  the  Programs'  reserve  estimates  are  based on oil and gas  prices  at
December 31, 1999, it is possible that a significant decrease in oil and gas




                                      -23-
<PAGE>




prices from  December  31, 1999  levels  will  reduce  such  reserves  and their
corresponding life-span.

      The Programs'  available capital from the limited partners'  subscriptions
has been spent on oil and gas drilling activities and there should be no further
material capital resource commitments in the future.  Occasional expenditures by
the Programs for well completions or workovers, however, may reduce or eliminate
cash available for a particular  quarterly cash distribution.  The Programs have
no debt commitments.  Cash for operational  purposes has generally been provided
by current oil and gas  production.  Management  believes that cash for ordinary
operational purposes will be provided by current oil and gas production.

      The 1985-2 Program's Statements of Cash Flows for the years ended December
31, 1998 and 1997 include  proceeds from the sale of oil and gas properties.  It
is  possible  that the  1985-2  Program's  repurchase  values  and the amount or
likelihood  of future  cash  distributions  could be  reduced as a result of the
disposition of these properties.

      There can be no  assurance as to the amount of the  Programs'  future cash
distributions.   The  Programs'  ability  to  make  cash  distributions  depends
primarily  upon the level of  available  cash flow  generated  by the  Programs'
operating  activities,  which will be affected (either positively or negatively)
by many factors  beyond the control of the Programs,  including the price of and
demand for oil and gas and other market and economic conditions.  Even if prices
and costs remain  stable,  the amount of cash available for  distributions  will
decline  over  time (as the  volume  of  production  from  producing  properties
declines) since the Programs are not replacing  production through  acquisitions
of producing properties and drilling.


      Inflation and Changing Prices

      Prices obtained for oil and gas production  depend upon numerous  factors,
including the extent of domestic and foreign production, foreign imports of oil,
market  demand,  domestic  and  foreign  economic  conditions  in  general,  and
governmental  regulations  and tax laws.  The general  level of inflation in the
economy did not have a material effect on the operations of the Program in 1999.
Oil and gas prices have  fluctuated  during recent years and generally  have not
followed the same pattern as  inflation.  See "Item 2.  Properties - Oil and Gas
Production, Revenue, and Price History."





                                      -24-
<PAGE>





      Year 2000 Computer Issues

      The year  2000  issue  refers  to the  inability  of  computer  and  other
information  technology  systems to properly process date and time  information,
stemming from the earlier  programming  practice of using two digits rather than
four to represent the year in a date.  To the knowledge of the General  Partner,
the Programs have not experienced any material effects from the year 2000 issue.
Costs incurred by the Programs in order to ensure year 2000  compatibility  were
not material to the Programs.


ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK.

      The Programs do not hold any market risk sensitive instruments.






                                      -25-
<PAGE>




ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



                  REPORT OF INDEPENDENT ACCOUNTANTS



TO THE PARTNERS

DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP


      In our opinion, the accompanying balance sheets and the related statements
of operations,  changes in partners'  capital and cash flows present fairly,  in
all material  respects,  the financial  position of the Dyco Oil and Gas Program
1985-1 Limited  Partnership,  a Minnesota limited  partnership,  at December 31,
1999 and 1998,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  1999,  in  conformity  with
accounting  principles  generally accepted in the United States. These financial
statements   are  the   responsibility   of  the   Program's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits. We conducted our audits of these financial  statements in accordance
with auditing standards  generally accepted in the United States,  which require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.



                               PricewaterhouseCoopers LLP










Tulsa, Oklahoma
March 24, 2000




                                      -26-
<PAGE>




                      DYCO OIL AND GAS PROGRAM
                     1985-1 LIMITED PARTNERSHIP
                           Balance Sheets
                     December 31, 1999 and 1998

                               ASSETS
                               ------
                                                   1999      1998
                                                 --------  --------
CURRENT ASSETS:
   Cash and cash equivalents                     $ 68,872  $ 31,245
   Accrued oil and gas sales                       55,595    41,516
                                                  -------   -------

     Total current assets                        $124,467  $ 72,761

NET OIL AND GAS PROPERTIES, utilizing the
   full cost method                                98,289   117,026

DEFERRED CHARGE                                     9,627    20,732
                                                  -------   -------

                                                 $232,383  $210,519
                                                  =======   =======

                  LIABILITIES AND PARTNERS' CAPITAL
                  ---------------------------------

CURRENT LIABILITIES:
   Accounts payable                              $  5,053  $  6,793
                                                  -------   -------
   Total current liabilities                     $  5,053  $  6,793

ACCRUED LIABILITY                                $ 33,938  $ 39,184

PARTNERS' CAPITAL:
   General Partner, 41 general partner
     units                                       $  1,934  $  1,645
   Limited Partners, issued and
     outstanding 4,100 Units                      191,458   162,897
                                                  -------   -------

     Total Partners' capital                     $193,392  $164,542
                                                  -------   -------

                                                 $232,383  $210,519
                                                  =======   =======



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




                                      -27-
<PAGE>




                      DYCO OIL AND GAS PROGRAM
                     1985-1 LIMITED PARTNERSHIP
                      Statements of Operations
        For the Years Ended December 31, 1999, 1998, and 1997


                                         1999      1998      1997
                                       --------  --------  --------

REVENUES:
   Oil and gas sales                   $293,313  $316,720  $434,576
   Interest                               2,362     3,100     3,586
                                        -------   -------   -------

                                       $295,675  $319,820  $438,162

COSTS AND EXPENSES:
   Lease operating                     $ 70,168  $ 86,362  $ 58,594
   Production taxes                      21,253    22,453    35,055
   Depreciation, depletion, and
     amortization of oil and gas
     properties                          18,737    25,912    34,859
   General and administrative            53,142    53,554    57,406
                                        -------   -------   -------

                                       $163,300  $188,281  $185,914
                                        -------   -------   -------

NET INCOME                             $132,375  $131,539  $252,248
                                        =======   =======   =======

GENERAL PARTNER (1%) - NET INCOME      $  1,324  $  1,315  $  2,522
                                        =======   =======   =======

LIMITED PARTNERS (99%) - NET INCOME    $131,051  $130,224  $249,726
                                        =======   =======   =======

NET INCOME per Unit                    $  31.97  $  31.77  $  60.91
                                        =======   =======   =======

UNITS OUTSTANDING                         4,141     4,141     4,141
                                        =======   =======   =======


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




                                      -28-
<PAGE>




                            DYCO OIL AND GAS PROGRAM
                           1985-1 LIMITED PARTNERSHIP
                   Statements of Changes in Partners' Capital
             For the Years Ended December 31, 1999, 1998, and 1997


                                   General     Limited
                                   Partner     Partners     Total
                                  --------   ----------  ----------

Balances at Dec. 31, 1996          $3,398     $336,392    $339,790
   Cash distributions             ( 3,520)   ( 348,465)  ( 351,985)
   Net income                       2,522      249,726     252,248
                                    -----      -------     -------

Balances at Dec. 31, 1997          $2,400     $237,653    $240,053
   Cash distributions             ( 2,070)   ( 204,980)  ( 207,050)
   Net income                       1,315      130,224     131,539
                                    -----      -------     -------

Balances at Dec. 31, 1998          $1,645     $162,897    $164,542
   Cash distributions             ( 1,035)   ( 102,490)  ( 103,525)
   Net income                       1,324      131,051     132,375
                                    -----      -------     -------

Balances at Dec. 31, 1999          $1,934     $191,458    $193,392
                                    =====      =======     =======



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




                                      -29-
<PAGE>




                          DYCO OIL AND GAS PROGRAM
                          1985-1 LIMITED PARTNERSHIP
                           Statements of Cash Flows
             For the Years Ended December 31, 1999, 1998, and 1997

                                               1999        1998       1997
                                            ----------  ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                $132,375    $131,539   $252,248
   Adjustments to reconcile net
     income to net cash provided by
     operating activities:
     Depreciation, depletion, and
       amortization of oil and gas
       properties                              18,737      25,912     34,859
     (Increase) decrease in accrued
       oil and gas sales                    (  14,079)     42,205     11,737
     (Increase) decrease in deferred
       charge                                  11,105   (   6,298)     1,085
     Increase (decrease) in accounts
       Payable                              (   1,740)        308        569
     Increase (decrease) in gas imbalance
       Payable                                   -      (  13,160)    13,160
     Increase (decrease) in accrued
       Liability                            (   5,246)     15,229  (   5,747)
                                              -------     -------    -------
   Net cash provided by operating
     activities                              $141,152    $195,735   $307,911
                                              -------     -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
     and gas properties                      $   -       $    492   $    935
   Additions to oil and gas properties           -      (   1,517)      -
                                              -------     -------    -------
   Net cash provided (used) by
     investing activities                    $   -      ($  1,025)  $    935
                                              -------     -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash Distributions                       ($103,525)  ($207,050) ($351,985)
                                              -------     -------    -------
   Net cash used by financing activities    ($103,525)  ($207,050) ($351,985)
                                              -------     -------    -------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                    $ 37,627   ($ 12,340) ($ 43,139)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                         31,245      43,585     86,724
                                              -------     -------    -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                             $ 68,872    $ 31,245   $ 43,585
                                              =======     =======    =======

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




                                      -30-
<PAGE>




               DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                          Notes to Financial Statements
              For the Years Ended December 31, 1999, 1998, and 1997


1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Nature of Operations

           The  Dyco  Oil  and  Gas  Program  1985-1  Limited  Partnership  (the
      "Program"), a Minnesota limited partnership, commenced operations on April
      1, 1985. Dyco Petroleum Corporation ("Dyco") is the General Partner of the
      Program.  Affiliates of Dyco owned 1,531 (37.3%) of the Program's Units at
      December 31, 1999.

           The Program's sole business is the  development and production of oil
      and gas with a concentration  on gas.  Substantially  all of the Program's
      gas reserves are being sold  regionally  in the "spot  market." Due to the
      highly  competitive  nature of the spot market,  prices on the spot market
      are  subject  to wide  seasonal  and  regional  pricing  fluctuations.  In
      addition,  such spot market sales are  generally  short-term in nature and
      are dependent upon the obtaining of  transportation  services  provided by
      pipelines.  The prices  received for the Program's oil and gas are subject
      to influences such as global consumption and supply trends.


      Cash and Cash Equivalents

           The Program  considers all highly liquid  investments with a maturity
      of three  months  or less  when  purchased  to be cash  equivalents.  Cash
      equivalents  are not  insured,  which  cause the  Program to be subject to
      risk.


      Credit Risk

           Accrued oil and gas sales which are due from a variety of oil and gas
      purchasers  subject the Program to a concentration of credit risk. Some of
      these purchasers are discussed in Note 3 - Major Customers.


      Oil and Gas Properties

           Oil and gas  operations  are accounted for using the full cost method
      of accounting. All productive and non-productive costs associated with the
      acquisition,  exploration,  and  development  of oil and gas  reserves are
      capitalized.  Capitalized  costs are depleted on the gross revenue  method
      using estimates of proved reserves. The full cost




                                      -31-
<PAGE>




      amortization  rates per  equivalent  Mcf of gas produced  during the years
      ended  December 31, 1999,  1998,  and 1997 were $0.13,  $0.16,  and $0.17,
      respectively.  The Program's calculation of depreciation,  depletion,  and
      amortization  includes  estimated  future  expenditures  to be incurred in
      developing  proved  reserves and estimated  dismantlement  and abandonment
      costs, net of estimated  salvage values. In the event the unamortized cost
      of oil and gas properties  being  amortized  exceeds the full cost ceiling
      (as defined by the Securities and Exchange  Commission ("SEC")) the excess
      is charged to expense in the year during which such excess  occurs.  Sales
      and  abandonments  of  properties  are  accounted  for as  adjustments  of
      capitalized costs with no gain or loss recognized, unless such adjustments
      would significantly  alter the relationship  between capitalized costs and
      proved oil and gas reserves.


      Deferred Charge

           The Deferred  Charge at December 31, 1999 and 1998  represents  costs
      deferred for lease  operating  expenses  incurred in  connection  with the
      Program's  underproduced  gas  imbalance  positions.   The  rate  used  in
      calculating  the deferred  charge is the average of the annual  production
      costs per Mcf. At December 31, 1999,  cumulative  total gas sales  volumes
      for  underproduced  wells were less than the Program's  pro-rata  share of
      total gas production from these wells by 21,345 Mcf,  resulting in prepaid
      lease operating expenses of $9,627. At December 31, 1998, cumulative total
      gas sales  volumes for  underproduced  wells were less than the  Program's
      pro-rata  share of total gas  production  from these  wells by 45,465 Mcf,
      resulting in prepaid lease operating expenses of $20,732.


      Accrued Liability

           The  Accrued  Liability  at  December  31,  1999 and 1998  represents
      charges accrued for lease operating  expenses  incurred in connection with
      the  Program's  overproduced  gas  imbalance  positions.  The rate used in
      calculating the accrued  liability is the average of the annual production
      costs per Mcf. At December 31, 1999,  cumulative  total gas sales  volumes
      for overproduced  wells exceeded the Program's pro-rata share of total gas
      production  from these wells by 75,250  Mcf,  resulting  in accrued  lease
      operating expenses of $33,938. At December 31, 1998,  cumulative total gas
      sales volumes for overproduced wells exceeded the Program's pro-rata share
      of total gas  production  from these  wells by 85,930  Mcf,  resulting  in
      accrued lease operating expenses of $39,184.



                                      -32-
<PAGE>




      Oil and Gas Sales and Gas Imbalance Payable

           The Program's oil and  condensate  production is sold,  title passed,
      and revenue  recognized  at or near the Program's  wells under  short-term
      purchase  contracts at prevailing  prices in accordance with  arrangements
      which are  customary in the oil industry.  Sales of gas  applicable to the
      Program's interest in producing oil and gas leases are recorded as revenue
      when the gas is metered  and title  transferred  pursuant to the gas sales
      contracts  covering the Program's  interest in gas  reserves.  During such
      times as the  Program's  sales of gas exceed its pro rata  ownership  in a
      well,  such sales are recorded as revenue unless total sales from the well
      have  exceeded  the  Program's  share  of  estimated  total  gas  reserves
      underlying  the  property  at which  time  such  excess is  recorded  as a
      liability. The rates per Mcf used to calculate this liability are based on
      the  average  gas  prices  received  for  the  volumes  at  the  time  the
      overproduction  occurred.  At December 31, 1999 or December  31, 1998,  no
      such liability was recorded.


      Use of Estimates in Financial Statements

           The preparation of financial  statements in conformity with generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenues and expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.  Further,  the deferred charge, the gas imbalance payable,  and
      the accrued  liability all involve estimates which could materially differ
      from the actual amounts ultimately  realized or incurred in the near term.
      Oil and gas reserves (see Note 4) also involve significant estimates which
      could materially differ from the actual amounts ultimately realized.


      Income Taxes

           Income or loss for income tax  purposes is  includable  in the income
      tax returns of the partners. Accordingly, no recognition has been given to
      income taxes in the accompanying financial statements.




                                      -33-
<PAGE>



2.    TRANSACTIONS WITH RELATED PARTIES

           Under  the  terms of the  Program's  partnership  agreement,  Dyco is
      entitled to receive a  reimbursement  for all direct  expenses and general
      and  administrative,  geological,  and  engineering  expenses it incurs on
      behalf of the Program. During the years ended December 31, 1999, 1998, and
      1997, such expenses totaled $53,142,  $53,554, and $57,406,  respectively,
      of which $42,840 was paid each year to Dyco and its affiliates.

           Affiliates   of  the  Program   operate   certain  of  the  Program's
      properties.  Their policy is to bill the Program for all customary charges
      and cost  reimbursements  associated with these activities,  together with
      any  compressor  rentals,  consulting,  or other services  provided.  Such
      charges are  comparable to third party charges in the area where the wells
      are located and are the same as charged to other working  interest  owners
      in the wells.

3.    MAJOR CUSTOMERS

           The following  purchasers  individually  accounted for 10% or more of
      the  combined  oil and gas  revenues  of the  Program  for the years ended
      December 31, 1999, 1998, and 1997:

       Purchaser                       1999   1998   1997
       ---------                       -----  -----  -----

       El Paso Energy
          Marketing Company            82.2%  79.2%  74.1%
       Sanguine, Ltd.                  15.5%  11.3%  15.5%


           In the  event of  interruption  of  purchases  by  these  significant
      customers  or  the  cessation  or  material   change  in  availability  of
      open-access  transportation by the Program's  pipeline  transporters,  the
      Program may encounter  difficulty in marketing its gas and in  maintaining
      historic sales levels.  Alternative  purchasers or transporters may not be
      readily available.


4.    SUPPLEMENTAL OIL AND GAS INFORMATION

           The  following  supplemental  information  regarding  the oil and gas
      activities  of  the  Program  is  presented  pursuant  to  the  disclosure
      requirements promulgated by the SEC.



                                      -34-
<PAGE>



      Capitalized Costs

           The  Program's   capitalized  costs  and  accumulated   depreciation,
      depletion,  amortization, and valuation allowance at December 31, 1999 and
      1998 were as follows:

                                               December 31,
                                       ----------------------------
                                           1999           1998
                                       -------------  -------------

      Proved properties                $20,981,447     $20,981,447

      Less accumulated depreciation,
        depletion, amortization, and
        valuation allowance           ( 20,883,158)   ( 20,864,421)
                                        ----------      ----------

      Net oil and gas properties       $    98,289     $   117,026
                                        ==========      ==========


      Costs Incurred

           The  Program  incurred  no  oil  and  gas  property   acquisition  or
      exploration  costs  during 1999,  1998,  and 1997.  Costs  incurred by the
      Program in connection with its oil and gas property development activities
      during 1999, 1998, and 1997 were as follows:

                                          December 31,
                                    -------------------------
                                     1999      1998     1997
                                    ------    ------   ------

      Development costs             $  -      $1,517   $  -
                                     =====     =====    =====

      Quantities of Proved Oil and Gas Reserves - Unaudited

            Set forth below is a summary of the changes in the net quantities of
      the Program's proved oil and gas reserves for the years ended December 31,
      1999,  1998,  and  1997.  Proved  reserves  were  estimated  by  petroleum
      engineers employed by affiliates of Dyco. Certain reserve  information was
      reviewed  by  Ryder  Scott  Company,   L.P.,  an   independent   petroleum
      engineering firm. All of the Program's  reserves are located in the United
      States  and  there  are no  proved  undeveloped  reserves.  The  following
      information includes certain gas balancing adjustments which cause the gas
      volumes  to  differ  from the  reserve  information  prepared  by Dyco and
      reviewed by Ryder Scott.





                                      -35-
<PAGE>


<TABLE>
<CAPTION>



                                             1999                  1998                   1997
                                      -------------------   -------------------    -------------------
                                         Oil       Gas         Oil       Gas          Oil       Gas
                                       (Bbls)     (Mcf)      (Bbls)     (Mcf)       (Bbls)     (Mcf)
                                      -------- ---------    --------- ---------    --------- ---------
<S>                                   <C>      <C>          <C>       <C>          <C>       <C>
Proved reserves,
   beginning of year                   1,970    716,034      1,525     771,783      1,975     732,477

Revisions of previous
   estimates                          (  243)   197,088        728     109,278     (   28)    240,188


Production                            (  292)  (141,030)    (  283)   (165,027)    (  422)   (200,882)
                                       -----    -------      -----     -------      ------    -------

Proved reserves,
   end of year                         1,435    772,092      1,970     716,034      1,525     771,783
                                       =====    =======      =====     =======      ======    =======

Proved developed reserves:
   Beginning of year                   1,970    716,034      1,525     771,783      1,975     732,477
                                       -----    -------      -----     -------      ------    -------
   End of year                         1,435    772,092      1,970     716,034      1,525     771,783
                                       =====    =======      =====     =======      ======    =======


</TABLE>




                                      -36-
<PAGE>




           The process of estimating oil and gas reserves is complex,  requiring
      significant   subjective   decisions  in  the   evaluation   of  available
      geological,  engineering,  and economic data for each reservoir.  The data
      for a given reservoir may change  substantially  over time as a result of,
      among other things,  additional development activity,  production history,
      and  viability  of   production   under   varying   economic   conditions;
      consequently,  it  is  reasonably  possible  that  material  revisions  to
      existing  reserve  estimates may occur in the near future.  Although every
      reasonable  effort  has been made to  ensure  that the  reserve  estimates
      reported  herein  represent the most  accurate  assessment  possible,  the
      significance  of  the  subjective  decisions  required  and  variances  in
      available data for various reservoirs make these estimates  generally less
      precise  than other  estimates  presented  in  connection  with  financial
      statement disclosures.  The Program's reserves were determined at December
      31,  1998 using oil and gas prices of $22.75 per barrel and $2.24 per Mcf,
      respectively.



                                      -37-
<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS



TO THE PARTNERS

DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP

      In our opinion, the accompanying balance sheets and the related statements
of operations,  changes in partners'  capital and cash flows present fairly,  in
all material  respects,  the financial  position of the Dyco Oil and Gas Program
1985-2 Limited  Partnership,  a Minnesota limited  partnership,  at December 31,
1999 and 1998,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  1999,  in  conformity  with
accounting  principles  generally accepted in the United States. These financial
statements   are  the   responsibility   of  the   Program's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits. We conducted our audits of these financial  statements in accordance
with auditing standards  generally accepted in the United States,  which require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.



                               PricewaterhouseCoopers LLP












Tulsa, Oklahoma
March 24, 2000






                                      -38-
<PAGE>




                            DYCO OIL AND GAS PROGRAM
                           1985-2 LIMITED PARTNERSHIP
                                 Balance Sheets
                           December 31, 1999 and 1998

                                     ASSETS
                                     ------
                                                   1999      1998
                                                 --------  --------
CURRENT ASSETS:
   Cash and cash equivalents                     $ 40,962  $ 26,412
   Accrued oil and gas sales                       82,496    13,786
                                                  -------   -------
     Total current assets                        $123,458  $ 40,198

NET OIL AND GAS PROPERTIES, utilizing the
   full cost method                                33,173    39,823

DEFERRED CHARGE                                    16,256    54,175
                                                  -------   -------

                                                 $172,887  $134,196
                                                  =======   =======

                        LIABILITIES AND PARTNERS' CAPITAL
                        ---------------------------------

CURRENT LIABILITIES:
   Accounts payable                              $  4,647  $  4,238
                                                  -------   -------

     Total current liabilities                   $  4,647  $  4,238

ACCRUED LIABILITY                                $  3,227  $  8,218

PARTNERS' CAPITAL:
   General Partner, 44 general partner
     units                                       $  1,650  $  1,217
   Limited Partners, issued and
     outstanding, 4,330 Units                     163,363   120,523
                                                  -------   -------

     Total Partners' capital                     $165,013  $121,740
                                                  -------   -------
                                                 $172,887  $134,196
                                                  =======   =======





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




                                      -39-
<PAGE>




                            DYCO OIL AND GAS PROGRAM
                           1985-2 LIMITED PARTNERSHIP
                            Statements of Operations
              For the Years Ended December 31, 1999, 1998, and 1997


                                       1999      1998       1997
                                    ---------  ---------  --------

REVENUES:
   Oil and gas sales                $199,029   $126,100    $187,883
   Interest                              785      1,809       1,671
   Gain on sale of
     oil and gas properties             -        15,938        -
                                     -------    -------     -------

                                    $199,814   $143,847    $189,554

COSTS AND EXPENSES:
   Lease operating                    85,341     56,430    $ 33,442
   Production taxes                   13,770      9,450      13,789
   Depreciation, depletion, and
     amortization of oil and gas
     properties                        6,662      8,457      11,610
   General and administrative         50,768     51,504      55,613
                                     -------    -------     -------

                                    $156,541   $125,841    $114,454
                                     -------    -------     -------

NET INCOME                          $ 43,273   $ 18,006    $ 75,100
                                     =======    =======     =======

GENERAL PARTNER (1%) - NET
   INCOME                           $    433   $    180    $    751
                                     =======    =======     =======

LIMITED PARTNERS (99%) - NET
   INCOME                           $ 42,840   $ 17,826    $ 74,349
                                     =======    =======     =======

NET INCOME per Unit                 $   9.89   $   4.12    $  17.17
                                     =======    =======     =======

UNITS OUTSTANDING                      4,374      4,374       4,374
                                     =======    =======     =======



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




                                      -40-
<PAGE>




                        DYCO OIL AND GAS PROGRAM 1985-2
                              LIMITED PARTNERSHIP
                   Statements of Changes in Partners' Capital
             For the Years Ended December 31, 1999, 1998, and 1997


                                   General    Limited
                                   Partner    Partners     Total
                                  --------   ----------  ----------

Balances at Dec. 31, 1996          $2,254     $223,210    $225,464
   Cash distributions             ( 1,093)   ( 108,257)  ( 109,350)
   Net income                         751       74,349      75,100
                                    -----      -------     -------

Balances at Dec. 31, 1997          $1,912     $189,302    $191,214
   Cash distributions             (   875)   (  86,605)  (  87,480)
   Net income                         180       17,826      18,006
                                    -----      -------     -------

Balances at Dec. 31, 1998          $1,217     $120,523    $121,740
   Net income                         433       42,840      43,273
                                    -----      -------     -------

Balances at Dec. 31, 1999          $1,650     $163,363    $165,013
                                    =====      =======     =======




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



                                      -41-
<PAGE>



                            DYCO OIL AND GAS PROGRAM
                           1985-2 LIMITED PARTNERSHIP
                            Statements of Cash Flows
              For the Years Ended December 31, 1999, 1998, and 1997

                                               1999        1998       1997
                                            ----------  ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                $43,273     $18,006    $ 75,100
   Adjustments to reconcile net
     income to net cash provided
     by operating activities:
     Depreciation, depletion, and
       amortization of oil and gas
       properties                              6,662       8,457      11,610
     Gain on sale of oil and
       gas properties                           -       ( 15,938)       -
     (Increase) decrease in accrued
       oil and gas sales                    ( 68,710)     17,288      15,471
     (Increase) decrease in
       deferred charge                        37,919    (  6,015)  (   8,633)
     Increase (decrease) in
       accounts payable                          409       1,520   (   3,480)
     Increase (decrease) in
       accrued liability                    (  4,991)        703   (   5,384)
                                              ------      ------     -------
   Net cash provided by operating
     activities                              $14,562     $24,021    $ 84,684
                                              ------      ------     -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
     and gas properties                      $  -        $21,600    $  6,664
   Additions to oil and gas
     properties                             (     12)       -           -
                                              ------      ------     -------
   Net cash provided (used) by
     investing activities                   ($    12)    $21,600    $  6,664
                                              ------      ------     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                        $  -       ($87,480)  ($109,350)
                                              ------      ------     -------
   Net cash used by financing
     activities                              $  -       ($87,480)  ($109,350)
                                              ------      ------     -------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                      $14,550    ($41,859)  ($ 18,002)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                        26,412      68,271      86,273
                                              ------      ------     -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                             $40,962     $26,412    $ 68,271
                                              ======      ======     =======

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



                                      -42-
<PAGE>



               DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                          Notes to Financial Statements
              For the Years Ended December 31, 1999, 1998, and 1997



1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Nature of Operations

           The  Dyco  Oil  and  Gas  Program  1985-2  Limited  Partnership  (the
      "Program"),  a Minnesota  limited  partnership,  commenced  operations  on
      August 26,  1985.  Dyco  Petroleum  Corporation  ("Dyco")  is the  General
      Partner of the  Program.  Affiliates  of Dyco owned  1,692  (39.1%) of the
      Program's Units at December 31, 1999.

           The Program's sole business is the  development and production of oil
      and gas with a concentration  on gas.  Substantially  all of the Program's
      gas reserves are being sold  regionally  in the "spot  market." Due to the
      highly  competitive  nature of the spot market,  prices on the spot market
      are  subject  to wide  seasonal  and  regional  pricing  fluctuations.  In
      addition,  such spot market sales are  generally  short-term in nature and
      are dependent upon the obtaining of  transportation  services  provided by
      pipelines.  The prices  received for the Program's oil and gas are subject
      to influences such as global consumption and supply trends.


      Cash and Cash Equivalents

           The Program  considers all highly liquid  investments with a maturity
      of three  months  or less  when  purchased  to be cash  equivalents.  Cash
      equivalents  are not  insured,  which  cause the  Program to be subject to
      risk.


      Credit Risk

           Accrued oil and gas sales which are due from a variety of oil and gas
      purchasers  subject the Program to a concentration of credit risk. Some of
      these purchasers are discussed in Note 3 - Major Customers.


      Oil and Gas Properties

           Oil and gas  operations  are accounted for using the full cost method
      of accounting. All productive and non-productive costs associated with the
      acquisition,  exploration,  and  development  of oil and gas  reserves are
      capitalized. Capitalized costs are depleted on the gross revenue method




                                      -43-
<PAGE>




      using estimates of proved reserves.  The full cost amortization  rates per
      equivalent  Mcf of gas produced  during the years ended December 31, 1999,
      1998, and 1997 were $0.07, $0.13, and $0.15,  respectively.  The Program's
      calculation  of  depreciation,   depletion,   and  amortization   includes
      estimated future expenditures to be incurred in developing proved reserves
      and  estimated  dismantlement  and  abandonment  costs,  net of  estimated
      salvage  values.  In  the  event  the  unamortized  cost  of oil  and  gas
      properties  being  amortized  exceeds the full cost ceiling (as defined by
      the  Securities and Exchange  Commission("SEC"))  the excess is charged to
      expense  in  the  year  during  which  such  excess   occurs.   Sales  and
      abandonments of properties are accounted for as adjustments of capitalized
      costs  with no gain or loss  recognized,  unless  such  adjustments  would
      significantly alter the relationship  between capitalized costs and proved
      oil and gas reserves.  During the fourth quarter of 1998, the Program sold
      for $15,938 two wells  which had no  reserves  that could be  economically
      recovered.  The proceeds  from these sales would have reduced the net book
      value of the oil and gas  properties  by 30%,  significantly  altering the
      Program's  capitalized  cost/proved  reserves  relationship.  Accordingly,
      capitalized  costs  were  not  reduced  and a gain  on sale of oil and gas
      properties of $15,938 was recognized.


      Deferred Charge

           The Deferred  Charge at December 31, 1999 and 1998  represents  costs
      deferred for lease  operating  expenses  incurred in  connection  with the
      Program's  underproduced  gas  imbalance  positions.   The  rate  used  in
      calculating  the deferred  charge is the average of the annual  production
      costs per Mcf. At December 31, 1999,  cumulative  total gas sales  volumes
      for  underproduced  wells were less than the Program's  pro-rata  share of
      total gas production from these wells by 75,829 Mcf,  resulting in prepaid
      lease  operating  expenses of $36,079.  At December 31,  1998,  cumulative
      total  gas  sales  volumes  for  underproduced  wells  were  less than the
      Program's  pro-rata  share of total gas  production  from  these  wells by
      78,973 Mcf, resulting in prepaid lease operating expenses of $54,175.


      Accrued Liability

           The  Accrued  Liability  at  December  31,  1999 and 1998  represents
      charges accrued for lease operating  expenses  incurred in connection with
      the  Program's  overproduced  gas  imbalance  positions.  The rate used in
      calculating the accrued  liability is the average of the annual production
      costs per Mcf. At December 31, 1999,  cumulative  total gas sales  volumes
      for overproduced wells exceeded the Program's




                                      -44-
<PAGE>




      pro-rata  share of total gas  production  from  these  wells by 6,782 Mcf,
      resulting in accrued lease operating  expenses of $3,227.  At December 31,
      1998,  cumulative total gas sales volumes for overproduced  wells exceeded
      the Program's  pro-rata share of total gas production  from these wells by
      11,980 Mcf, resulting in accrued lease operating expenses of $8,218.


      Oil and Gas Sales

           The Program's oil and  condensate  production is sold,  title passed,
      and revenue  recognized  at or near the Program's  wells under  short-term
      purchase  contracts at prevailing  prices in accordance with  arrangements
      which are  customary in the oil industry.  Sales of gas  applicable to the
      Program's interest in producing oil and gas leases are recorded as revenue
      when the gas is metered and title  transferred to the gas sales  contracts
      covering the Program's interest in gas reserves.  During such times as the
      Program's sales of gas exceed its pro rata ownership in a well, such sales
      are recorded as revenue unless total sales from the well have exceeded the
      Program's share of estimated total gas reserves underlying the property at
      which time such excess is recorded as a  liability.  At December  31, 1999
      and 1998, no such liability was recorded.


      Use of Estimates in Financial Statements

           The preparation of financial  statements in conformity with generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenues and expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.  Further, the deferred charge and the accrued liability involve
      estimates which could materially differ from the actual amounts ultimately
      realized or incurred in the near term.  Oil and gas reserves  (see Note 4)
      also involve significant  estimates which could materially differ from the
      actual amounts ultimately realized.


      Income Taxes

           Income or loss for income tax  purposes is  includable  in the income
      tax returns of the partners. Accordingly, no recognition has been given to
      income taxes in the accompanying financial statements.




                                      -45-
<PAGE>





2.    TRANSACTIONS WITH RELATED PARTIES

           Under the terms of the Program Agreement, Dyco is entitled to receive
      a reimbursement  for all direct  expenses and general and  administrative,
      geological,  and engineering  expenses it incurs on behalf of the Program.
      During the years ended December 31, 1999,  1998,  and 1997,  such expenses
      totaled $50,768, $51,504, and $55,613,  respectively, of which $40,272 was
      paid each year to Dyco and its affiliates.

           Affiliates   of  the  Program   operate   certain  of  the  Program's
      properties.  Their policy is to bill the Program for all customary charges
      and cost  reimbursements  associated with these activities,  together with
      any  compressor  rentals,  consulting,  or other services  provided.  Such
      charges are  comparable to third party charges in the area where the wells
      are located and are the same as charged to other working  interest  owners
      in the wells.

3.    MAJOR CUSTOMERS

           The following  purchasers  individually  accounted for 10% or more of
      the  combined  oil and gas  revenues  of the  Program  for the years ended
      December 31, 1999, 1998, and 1997:

          Purchaser                1999    1998   1997
          ---------                -----   -----  -----
          El Paso Energy
            Marketing Company      66.7%   54.6%  52.7%
          EOTT Energy
            Operating LP           15.7%     -      - %
          Mobil Oil Corporation    13.4%   12.6%  15.0%
          Koch Oil Company           - %   11.4%  14.1%

           In the  event of  interruption  of  purchases  by  these  significant
      customers  or  the  cessation  or  material   change  in  availability  of
      open-access  transportation by the Program's  pipeline  transporters,  the
      Program may encounter  difficulty in marketing its gas and in  maintaining
      historic sales levels.  Alternative  purchasers or transporters may not be
      readily available.


4.    SUPPLEMENTAL OIL AND GAS INFORMATION

           The  following  supplemental  information  regarding  the oil and gas
      activities  of  the  Program  is  presented  pursuant  to  the  disclosure
      requirements promulgated by the SEC.




                                      -46-
<PAGE>




      Capitalized Costs

           The  Program's   capitalized  costs  and  accumulated   depreciation,
      depletion,  amortization, and valuation allowance at December 31, 1999 and
      1998 were as follows:

                                               December 31,
                                      -----------------------------
                                           1999           1998
                                       -------------  -------------

     Proved properties                  $22,431,141    $22,431,129

     Less accumulated depreciation,
       depletion, amortization, and
       valuation allowance             ( 22,397,968)  ( 22,391,306)
                                         ----------     ----------

     Net oil and gas properties         $    33,173    $    39,823
                                         ==========     ==========


      Costs Incurred

           The  Program  incurred  no  oil  and  gas  property   acquisition  or
      exploration  costs  during 1999,  1998,  and 1997.  Costs  incurred by the
      Program in connection with its oil and gas property development activities
      during 1999, 1998, and 1997 were as follows:

                                              December 31,
                                       ---------------------------
                                        1999      1998       1997

           Development costs           $  12     $   -      $   -
                                        =====     =====      =====


      Quantities of Proved Oil and Gas Reserves - Unaudited

           Set forth below is a summary of the changes in the net  quantities of
      the Program's proved oil and gas reserves for the years ended December 31,
      1999,  1998,  and  1997.  Proved  reserves  were  estimated  by  petroleum
      engineers employed by affiliates of Dyco. Certain reserve  information was
      reviewed  by  Ryder  Scott  Company,   L.P.,  an   independent   petroleum
      engineering firm. All of the Program's  reserves are located in the United
      States.   The  following   information   includes  certain  gas  balancing
      adjustments  which  cause  the gas  volumes  to  differ  from the  reserve
      information prepared by Dyco and reviewed by Ryder Scott.




                                      -47-
<PAGE>




<TABLE>
<CAPTION>




                                      1999                    1998                    1997
                               -------------------     -------------------     -------------------
                                  Oil        Gas          Oil       Gas           Oil       Gas
                                (Bbls)      (Mcf)       (Bbls)     (Mcf)        (Bbls)     (Mcf)
                               --------   ---------    --------  ---------     --------  ---------

<S>                            <C>        <C>          <C>       <C>           <C>       <C>
Proved reserves,
   beginning of year             7,743     264,024      10,595    307,346       18,235    338,081

Revisions of previous
   estimates                     8,282     133,576     (   455)     5,803      ( 4,677)    29,062

Sales of reserves                 -           -           -      (    379)        -          -

Production                     ( 2,624)   ( 84,745)    ( 2,397)  ( 48,746)     ( 2,963)  ( 59,797)
                                ------     -------      ------    -------       ------    -------

Proved reserves,
   end of year                  13,401     312,855       7,743    264,024       10,595    307,346
                                ======     =======      ======    =======       ======    =======

Proved developed reserves:
   Beginning of year             7,743     264,024      10,595    307,346       18,235    338,081
                                ------     -------      ------    -------       ------    -------
   End of year                  13,401     312,855       7,743    264,024       10,595    307,346
                                ======     =======      ======    =======       ======    =======
--------------------

</TABLE>



                                      -48-
<PAGE>




           The process of estimating oil and gas reserves is complex,  requiring
      significant   subjective   decisions  in  the   evaluation   of  available
      geological,  engineering,  and economic data for each reservoir.  The data
      for a given reservoir may change  substantially  over time as a result of,
      among other things,  additional development activity,  production history,
      and  viability  of   production   under   varying   economic   conditions;
      consequently,  it  is  reasonably  possible  that  material  revisions  to
      existing  reserve  estimates may occur in the near future.  Although every
      reasonable  effort  has been made to  ensure  that the  reserve  estimates
      reported  herein  represent the most  accurate  assessment  possible,  the
      significance  of  the  subjective  decisions  required  and  variances  in
      available data for various reservoirs make these estimates  generally less
      precise  than other  estimates  presented  in  connection  with  financial
      statement disclosures.  The Program's reserves were determined at December
      31,  1999 using oil and gas prices of $22.75 per barrel and $2.24 per Mcf,
      respectively.


ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE

      None.



                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The Programs are limited  partnerships  and have no directors or executive
officers.  The following  individuals  are  directors and executive  officers of
Dyco, the General Partner.  The business address of such directors and executive
officers is Two West Second Street, Tulsa, Oklahoma 74103.

            NAME        AGE         POSITION WITH DYCO
      ----------------  ---  --------------------------------
      Dennis R. Neill    48  President and Director

      Patrick M. Hall    41  Chief Financial Officer

      Judy K. Fox        49  Secretary

      The  director   will  hold  office  until  the  next  annual   meeting  of
shareholders of Dyco or until his successor has been duly elected and qualified.
All executive officers serve at the discretion of the Board of Directors.




                                      -49-
<PAGE>




      Dennis R. Neill joined Samson in 1981, was named Senior Vice President and
Director of Dyco on June 18, 1991,  and was named  President of Dyco on June 30,
1996. Prior to joining Samson,  he was associated with a Tulsa law firm,  Conner
and  Winters,  where his  principal  practice  was in the  securities  area.  He
received a Bachelor of Arts degree in  political  science  from  Oklahoma  State
University and a Juris Doctorate  degree from the University of Texas. Mr. Neill
also  serves as  Senior  Vice  President  of Samson  Investment  Company  and as
President and Director of Samson Properties  Incorporated,  Samson  Hydrocarbons
Company, Berry Gas Company,  Circle L Drilling Company,  Compression,  Inc., and
Geodyne Resources, Inc. and its subsidiaries.

      Patrick M. Hall joined Samson in 1983,  was named a Vice President of Dyco
on June 18,  1991,  and was named  Chief  Financial  Officer of Dyco on June 30,
1996. Prior to joining Samson he was a senior  accountant with Peat Marwick Main
& Co. in Tulsa.  He holds a  Bachelor  of  Science  degree  in  accounting  from
Oklahoma State  University and is a Certified Public  Accountant.  Mr. Hall also
serves as Senior Vice President - Controller of Samson Investment Company.

      Judy K. Fox joined Samson in 1990 and was named  Secretary of Dyco on June
30, 1996.  Prior to joining Samson,  she served as Gas Contract  Manager for Ely
Energy  Company.  Ms.  Fox is also  Secretary  of Berry  Gas  Company,  Circle L
Drilling  Company,  Compression,   Inc.,  Samson  Hydrocarbons  Company,  Samson
Properties Incorporated, and Geodyne Resources, Inc. and its subsidiaries.


      Section 16(a) Beneficial Ownership Reporting Compliance

      To the best  knowledge of the  Programs and Dyco,  there were no officers,
directors,  or ten  percent  owners who were  delinquent  filers  during 1999 of
reports required under Section 16(a) of the Securities and Exchange Act of 1934.


ITEM 11.   EXECUTIVE COMPENSATION

      The Programs are limited partnerships and, therefore,  have no officers or
directors.  The following  table  summarizes the amounts paid by the Programs as
compensation and  reimbursements  to Dyco and its affiliates for the three years
ended December 31, 1999:





                                      -50-
<PAGE>




              Compensation/Reimbursement to Dyco and its affiliates
                       Three Years Ended December 31, 1999

Type of Compensation/Reimbursement(1)              Expense
-------------------------------------     -------------------------
                                           1999     1998     1997
                                          -------  -------  -------

1985-1 Program
--------------

   Compensation:
     Operations                             (2)      (2)      (2)

   Reimbursements:
     General and Administrative,
       Geological, and Engineering
       Expenses and Direct
       Expenses(3)                        $42,840  $42,840  $42,840

1985-2 Program
--------------

   Compensation:
     Operations                             (2)      (2)      (2)

   Reimbursements:
     General and Administrative,
       Geological, and Engineering
       Expenses and Direct
       Expenses(3)                        $40,272  $40,272  $40,272

----------

(1)   The  authority  for  all of such  compensation  and  reimbursement  is the
      Program Agreements. With respect to the Operations activities noted in the
      table, management believes that such compensation is equal to or less than
      that  charged by  unaffiliated  persons in the same  geographic  areas and
      under the same conditions.
(2)   Affiliates of the Programs  serve as operator of a significant  portion of
      the  Programs'  wells.  Dyco,  as  General  Partner,  contracts  with such
      affiliates  for  services  as  operator of the wells.  As  operator,  such
      affiliates are  compensated at rates provided in the operating  agreements
      in effect and charged to all parties to such agreement.  The dollar amount
      of such compensation paid by the Programs to such affiliates is impossible
      to quantify as of the date of this Annual Report.
(3)   The  Programs  reimburse  Dyco  and  its  affiliates  for  reasonable  and
      necessary general and administrative, geological, and engineering expenses
      and direct  expenses  incurred in  connection  with their  management  and
      operation of the




                                      -51-
<PAGE>




      Programs.  The  directors,   officers,  and  employees  of  Dyco  and  its
      affiliates  receive no direct  remuneration  from the  Programs  for their
      services to the Programs.  See "Salary  Reimbursement  Table"  below.  The
      allocable general and administrative, geological, and engineering expenses
      are apportioned on a reasonable  basis between the Programs'  business and
      all other oil and gas  activities  of Dyco and its  affiliates,  including
      Dyco's  management  and  operation  of  affiliated  oil  and  gas  limited
      partnerships.  The  allocation  to the  Programs of these costs is made by
      Dyco as General Partner.


      As noted in the  Compensation/Reimbursement  Table above,  the  directors,
officers,  and  employees  of  Dyco  and  their  affiliates  receive  no  direct
remuneration from the Programs for their services.  However,  to the extent such
services represent direct  involvement with the Programs,  as opposed to general
corporate  functions,  such persons' salaries are allocated to and reimbursed by
the  Programs.  Such  allocation to the  Programs'  general and  administrative,
geological, and engineering expenses of the salaries of directors, officers, and
employees of Dyco and its affiliates is based on internal records  maintained by
Dyco and its affiliates,  and represents investor relations,  legal, accounting,
data  processing,  management,  gas  marketing,  and  other  functions  directly
attributable  to the Programs'  operations.  When actual costs incurred  benefit
other  partnerships  and  affiliates,  the  allocation  of costs is based on the
relationship  of the  Program's  reserves  tot the total  reserves  owned by all
partnerships  and  affiliates.  The following  table  indicates the  approximate
amount of general and administrative  expense reimbursement  attributable to the
salaries of the  directors,  officers,  and employees of Dyco and its affiliates
for the three years ended December 31, 1999:



                                      -52-
<PAGE>

<TABLE>
<CAPTION>


                                          Salary Reimbursement
                                   Three Years Ended December 31, 1999
                                             1985-1 Program
                                             --------------
                                                           Long Term Compensation
                                                       -------------------------------
                             Annual Compensation              Awards            Payouts
                          -------------------------    ---------------------    -------
                                                                     Securi-
                                              Other                   ties                  All
     Name                                     Annual   Restricted    Under-                Other
      and                                    Compen-     Stock       lying       LTIP     Compen-
   Principal              Salary     Bonus   sation     Award(s)    Options/    Payouts   sation
   Position        Year     ($)       ($)      ($)        ($)        SARs(#)      ($)       ($)
---------------    ----   -------   -------  -------   ----------   --------    -------   -------
<S>                <C>    <C>       <C>        <C>       <C>          <C>         <C>       <C>
Dennis R. Neill,
President(1)       1997     -         -        -         -            -           -         -
                   1998     -         -        -         -            -           -         -
                   1999     -         -        -         -            -           -         -

All Executive
Officers,
Directors,
and Employees
as a group(2)      1997   $25,593     -        -         -            -           -         -
                   1998   $25,353     -        -         -            -           -         -
                   1999   $26,167     -        -         -            -           -         -
----------
(1)   The general and  administrative  expenses  paid by the 1985-1  Program and  attributable  to salary
      reimbursements do not include any salary or other compensation attributable to Mr. Neill.
(2)   No  officer  or  director  of Dyco or its  affiliates  provides  full-time  services  to the  1985-1
      Program  and no  individual's  salary  or  other compensation  reimbursement  from the  1985-1
      Program  equals or  exceeds $100,000 per annum.

</TABLE>



                                      -53-
<PAGE>

<TABLE>
<CAPTION>



                                             1985-2 Program
                                             --------------
                                                           Long Term Compensation
                                                       -------------------------------
                             Annual Compensation              Awards            Payouts
                          -------------------------    ---------------------    -------
                                                                     Securi-
                                              Other                   ties                  All
     Name                                     Annual   Restricted    Under-                Other
      and                                    Compen-     Stock       lying       LTIP     Compen-
   Principal              Salary     Bonus   sation     Award(s)    Options/    Payouts   sation
   Position        Year     ($)       ($)      ($)        ($)        SARs(#)      ($)       ($)
---------------    ----   -------   -------  -------   ----------   --------    -------   -------
<S>                <C>    <C>       <C>        <C>       <C>          <C>         <C>       <C>
Dennis R. Neill
President(1)       1997     -         -        -         -            -           -         -
                   1998     -         -        -         -            -           -         -
                   1999     -         -        -         -            -           -         -

All Executive
Officers,
Directors,
and Employees
as a group(2)      1997   $24,058     -        -         -            -           -         -
                   1998   $23,833     -        -         -            -           -         -
                   1999   $24,598     -        -         -            -           -         -
----------
(1)   The general and  administrative  expenses  paid by the 1985-2  Program and  attributable  to salary
      reimbursements do not include any salary or other compensation attributable to Mr. Neill.
(2)   No  officer  or  director  of Dyco or its  affiliates  provides  full-time services  to the  1985-2
      Program  and no  individual's  salary  or  other compensation  reimbursement  from the  1985-2
      Program  equals or  exceeds $100,000 per annum.

</TABLE>



                                      -54-
<PAGE>




      Samson  maintains  necessary  inventories of new and used field equipment.
Samson may have provided some of this  equipment for wells in which the Programs
have an  interest.  This  equipment  was provided at prices or rates equal to or
less than those normally  charged in the same or comparable  geographic  area by
unaffiliated  persons or companies  dealing at arm's  length.  The  operators of
these  wells  bill the  Programs  for a portion  of such  costs  based  upon the
Programs' interest in the well.


ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table provides information as to the beneficial ownership of
the Programs' Units as of March 1, 2000 by each beneficial owner of more than 5%
of  the  issued  and  outstanding  Units  and by the  directors,  officers,  and
affiliates  of Dyco.  The address of each of such persons is Samson  Plaza,  Two
West Second Street, Tulsa, Oklahoma 74103.


                                              Number of Units
                                               Beneficially
                                              Owned (Percent
              Beneficial Owner                of Outstanding)
      ---------------------------------      -----------------

      1985-1 Program:
      --------------

        Samson Resources Company             1,532     (37.4%)

        All directors, officers, and
          affiliates of Dyco as a group
          and Dyco (5 persons)               1,532     (37.4%)

      1985-2 Program:
      --------------

        Samson Resources Company             1,693     (39.1%)

        All directors, officers, and
          affiliates of Dyco as a group
          and Dyco (5 persons)               1,693     (39.1%)



ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Certain affiliates of Dyco engage in oil and gas activities  independently
of the Programs  which  result in  conflicts of interest  that cannot be totally
eliminated.  The allocation of acquisition  and drilling  opportunities  and the
nature of the



                                      -55-
<PAGE>



compensation  arrangements  between the Programs and such affiliates also create
potential conflicts of interest.  An affiliate of Dyco owns a significant amount
of the  Programs'  Units and  therefore  has an identity of interest  with other
limited partners with respect to the operations of the Programs.

      In order to attempt to assure  limited  liability for limited  partners as
well as an orderly conduct of business,  management of the Programs is exercised
solely by Dyco. The Program Agreements grant Dyco broad discretionary  authority
with  respect  to  the  Programs'   participation  in  drilling   prospects  and
expenditure and control of funds,  including  borrowings.  These  provisions are
similar to those contained in prospectuses and partnership  agreements for other
public oil and gas  partnerships.  Broad discretion as to general  management of
the Programs  involves  circumstances  where Dyco has  conflicts of interest and
where it must allocate costs and expenses, or opportunities,  among the Programs
and other competing interests.

      Dyco does not devote all of its time, efforts,  and personnel  exclusively
to the  Programs.  Furthermore,  the  Programs  do not have any  employees,  but
instead  rely on the  personnel of Samson.  The  Programs  thus compete with the
Samson  Companies  (including  other  oil and gas  programs)  for the  time  and
resources  of such  personnel.  Samson  devotes  such time and  personnel to the
management  of the  Programs as are  indicated by the  circumstances  and as are
consistent with Dyco's fiduciary duties.

      Affiliates  of the Program  are solely  responsible  for the  negotiation,
administration,  and  enforcement of oil and gas sales  agreements  covering the
Programs'  leasehold  interests.  Because  affiliates of the Program who provide
services to the  Program  have  fiduciary  or other  duties to other  members of
Samson,  contract  amendments and  negotiating  positions taken by them in their
effort to enforce  contracts with purchasers may not  necessarily  represent the
positions  that a Program would take if it were to administer  its own contracts
without involvement with other members of Samson. On the other hand,  management
believes that the Programs'  negotiating strength and contractual positions have
been enhanced by virtue of its affiliation with Samson.

      Samson  Resources  Company,  an  affiliate  of  Dyco,  ("Resources")  owns
approximately  37% and 39%,  respectively,  of the 1985-1  and 1985-2  Programs'
outstanding  Units as of March 1, 2000. The Program  Agreements permit Resources
to  independently  vote its Units.  Resources'  significant  Unit ownership will
therefore likely determine the outcome of any matter submitted for a vote of the
Limited Partners.




                                      -56-
<PAGE>



                                    PART IV


ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


      (a)  Financial Statements, Financial Statement Schedules, and Exhibits.

           (1)  Financial Statements: The following financial statements for the
                Programs  as of  December  31,  1999 and 1998 and for the  years
                ended  December  31, 1999,  1998,  and 1997 are filed as part of
                this report:

                     Reports of Independent Accountants
                     Balance Sheets
                     Statements of Operations
                     Statements of Changes in Partners' Capital
                     Statements of Cash Flows
                     Notes to Financial Statements

           (2)  Financial Statement Schedules:

                     None.

           (3)  Exhibits:

                4.1  Drilling Agreement dated April 1, 1985 for Dyco Oil and Gas
                     Program  1985-1  by and  between  Dyco Oil and Gas  Program
                     1985-1, Dyco Petroleum Corporation,  and Jaye F. Dyer filed
                     as Exhibit  4.1 to Annual  Report on Form 10-K for the year
                     ended  December  31,  1991 on April 8,  1992 and is  hereby
                     incorporated by reference.

                4.2  Program  Agreement dated April 1, 1985 for Dyco Oil and Gas
                     Program  1985-1 by and between Dyco  Petroleum  Corporation
                     and the Participants  filed as Exhibit 4.2 to Annual Report
                     on Form 10-K for the year ended  December 31, 1991 on April
                     8, 1992 and is hereby incorporated by reference.

                4.3  Amendment to Program Agreement for Dyco Oil and Gas Program
                     1985-1  dated  February  9, 1989  filed as  Exhibit  4.3 to
                     Annual  Report on Form 10K for the year ended  December 31,
                     1991  on  April  8,  1992  and is  hereby  incorporated  by
                     reference.



                                      -57-
<PAGE>




                4.4  Certificate of Limited  Partnership,  as amended,  for Dyco
                     Oil and Gas Program  1985-1  Limited  Partnership  filed as
                     Exhibit  4.4 to  Annual  Report  on Form  10-K for the year
                     ended  December  31,  1991 on April 8,  1992 and is  hereby
                     incorporated by reference.

                4.5  Drilling  Agreement  dated August 26, 1985 for Dyco Oil and
                     Gas Program  1985-2 by and between Dyco Oil and Gas Program
                     1985-2, Dyco Petroleum Corporation,  and Jaye F. Dyer filed
                     as Exhibit  4.5 to Annual  Report on Form 10-K for the year
                     ended  December  31,  1991 on April 8,  1992 and is  hereby
                     incorporated by reference.

                4.6  Program  Agreement  dated  August 26, 1985 for Dyco Oil and
                     Gas   Program   1985-2  by  and  between   Dyco   Petroleum
                     Corporation  and the  Participants  filed as Exhibit 4.6 to
                     Annual Report on Form 10-K for the year ended  December 31,
                     1991  on  April  8,  1992  and is  hereby  incorporated  by
                     reference.

                4.7  Amendment to Program Agreement for Dyco Oil and Gas Program
                     1985-2  dated  February  9, 1989  filed as  Exhibit  4.7 to
                     Annual Report on Form 10-K for the year ended  December 31,
                     1991  on  April  8,  1992  and is  hereby  incorporated  by
                     reference.

                4.8  Certificate of Limited  Partnership,  as amended,  for Dyco
                     Oil and Gas Program  1985-2  Limited  Partnership  filed as
                     Exhibit  4.8 to  Annual  Report  on Form  10-K for the year
                     ended  December  31,  1991 on April 8,  1992 and is  hereby
                     incorporated by reference.

              *23.1  Consent of Ryder Scott  Company,  L.P. for Dyco Oil and Gas
                     Program  1985-1  Limited Partnership.

              *23.2  Consent of Ryder Scott  Company,  L.P. for Dyco Oil and Gas
                     Program  1985-2  Limited Partnership.

              *27.1  Financial  Data  Schedule   containing   summary  financial
                     information  extracted  from the  Dyco Oil and Gas  Program
                     1985-1  Limited  Partnership's  financial  statements as of
                     December 31, 1999 and for the year ended December 31, 1999.



                                      -58-
<PAGE>




               *27.2 Financial  Data  Schedule   containing   summary  financial
                     information  extracted  from the  Dyco Oil and Gas  Program
                     1985-2  Limited  Partnership's  financial  statements as of
                     December 31, 1999 and for the year ended December 31, 1999.




                All other Exhibits are omitted as inapplicable.


                -----------------
                *  Filed herewith.


      (b)  Reports on Form 8-K filed during the fourth quarter of 1999:

                None.




                                      -59-
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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 organized.

                               DYCO OIL AND GAS PROGRAM 1985-1
                               LIMITED PARTNERSHIP

                               By:  DYCO PETROLEUM CORPORATION
                                    General Partner

                                     March 28, 2000


                               By:   //s// Dennis R. Neill
                                    ------------------------------
                                    Dennis R. Neill
                                    President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities on the dates indicated.

By:   //s// Dennis R. Neill   President and              March 28, 2000
      ---------------------   Director (Principal
         Dennis R. Neill      Executive Officer)

      //s// Patrick M. Hall   Chief Financial            March 28, 2000
      ---------------------   Officer (Principal
         Patrick M. Hall      Financial and
                              Accounting Officer)

      //s// Judy K. Fox       Secretary                  March 28, 2000
      ---------------------
         Judy K. Fox



                                      -60-
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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 organized.

                               DYCO OIL AND GAS PROGRAM 1985-2
                               LIMITED PARTNERSHIP

                               By:  DYCO PETROLEUM CORPORATION
                                    General Partner

                                     March 28, 2000


                               By:   //s// Dennis R. Neill
                                    ------------------------------
                                    Dennis R. Neill
                                    President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities on the dates indicated.

By:    //s// Dennis R. Neill  President and              March 28, 2000
      ---------------------   Director (Principal
         Dennis R. Neill      Executive Officer)

      //s// Patrick M. Hall   Chief Financial            March 28, 2000
      ---------------------   Officer (Principal
         Patrick M. Hall      Financial and
                              Accounting Officer)

      //s// Judy K. Fox       Secretary                  March 28 , 2000
      ---------------------
         Judy K. Fox




                                      -61-
<PAGE>



                          INDEX TO EXHIBITS


Exhibit
Number     Description
-------    -----------

4.1        Drilling  Agreement  dated April 1, 1985 for Dyco Oil and Gas Program
           1985-1 by and between Dyco Oil and Gas Program 1985-1, Dyco Petroleum
           Corporation,  and Jaye F. Dyer filed as Exhibit 4.1 to Annual  Report
           on Form 10-K for the year ended  December  31,  1991 on April 8, 1992
           and is hereby incorporated by reference.

4.2        Program  Agreement  dated  April 1, 1985 for Dyco Oil and Gas Program
           1985-1 by and between Dyco Petroleum Corporation and the Participants
           filed as Exhibit 4.2 to Annual Report on Form 10-K for the year ended
           December  31,  1991 on April 8,  1992 and is hereby  incorporated  by
           reference.

4.3        Amendment to Program  Agreement  for Dyco Oil and Gas Program  1985-1
           dated  February 9, 1989 filed as Exhibit 4.3 to Annual Report on Form
           10-K for the year  ended  December  31,  1991 on April 8, 1992 and is
           hereby incorporated by reference.

4.4        Certificate of Limited Partnership,  as amended, for Dyco Oil and Gas
           Program  1985-1  Limited  Partnership  filed as Exhibit 4.4 to Annual
           Report on Form 10-K for the year ended  December 31, 1991 on April 8,
           1992 and is hereby incorporated by reference.

4.5        Drilling Agreement dated August 26, 1985 for Dyco Oil and Gas Program
           1985-2 by and between Dyco Oil and Gas Program 1985-2, Dyco Petroleum
           Corporation,  and Jaye F. Dyer filed as Exhibit 4.5 to Annual  Report
           on Form 10-K for the year ended  December  31,  1991 on April 8, 1992
           and is hereby incorporated by reference.

4.6        Program  Agreement dated August 26, 1985 for Dyco Oil and Gas Program
           1985-2 by and between Dyco Petroleum Corporation and the Participants
           filed as Exhibit 4.6 to Annual Report on Form 10-K for the year ended
           December  31,  1991 on April 8,  1992 and is hereby  incorporated  by
           reference.

4.7        Amendment to Program  Agreement  for Dyco Oil and Gas Program  1985-2
           Limited  Partnership  dated  February 9, 1989 filed as Exhibit 4.7 to
           Annual  Report on Form 10-K for the year ended  December  31, 1991 on
           April 8, 1992 and is hereby incorporated by reference.



                                      -62-
<PAGE>




4.8        Certificate of Limited Partnership,  as amended, for Dyco Oil and Gas
           Program  1985-2  Limited  Partnership  filed as Exhibit 4.8 to Annual
           Report on Form 10-K for the year ended  December 31, 1991 on April 8,
           1992 and is hereby incorporated by reference.

*23.1      Consent  of  Ryder  Scott  Company, L.P. for Dyco Oil and Gas Program
           1985-1 Limited Partnership.

*23.2      Consent  of  Ryder  Scott  Company, L.P. for Dyco Oil and Gas Program
           1985-2 Limited Partnership.

*27.1      Financial  Data Schedule  containing  summary  financial  information
           extracted   from  the  Dyco  Oil  and  Gas  Program   1985-1  Limited
           Partnership's  financial  statements  as of December 31, 1999 and for
           the year ended December 31, 1999.

*27.2      Financial  Data Schedule  containing  summary  financial  information
           extracted   from  the  Dyco  Oil  and  Gas  Program   1985-2  Limited
           Partnership's  financial  statements  as of December 31, 1999 and for
           the year ended December 31, 1999.


------------------
*  Filed herewith.


                                      -63-