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, 2000

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...................................16
      ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.......................19
      ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                  ABOUT MARKET RISK.........................................26
      ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............27
      ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.......................56

PART III....................................................................56
      ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........56
      ITEM 11.    EXECUTIVE COMPENSATION....................................57
      ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT............................................62
      ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............62

PART IV.....................................................................64
      ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
                  REPORTS ON FORM 8-K.......................................64

SIGNATURES..................................................................67




                                      -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,  2000,  Samson owned
interests in approximately  13,500 oil and gas wells located in 19 states of the
United States and the countries of Canada,  Venezuela,  and Russia.  At December
31, 2000,  Samson operated  approximately  2,700 oil and gas wells located in 14
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 February
15, 2001, Samson employed approximately 965 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."



                                      -3-
<PAGE>



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



                                      -4-
<PAGE>



      Future  Legislation --  Legislation  affecting the oil and gas industry is
under  constant  review  for  amendment  or  expansion.  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") accounted
for approximately  89.7% of the 1985-1 Program's oil and gas revenues during the
year  ended  December  31,  2000.  Purchases  of gas by El  Paso  accounted  for
approximately 68.9% of the 1985-2 Program's oil and gas revenues during the year
ended  December  31,  2000.  In the event of  interruption  of purchases by this
significant  customer 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  Mobil  Oil  Corporation  accounted  for
approximately 18.2% of the 1985-2 Program's oil and gas revenues during the year
ended December 31, 2000. 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 Programs' revenues,  net income or loss, cash flows, carrying value of
oil and gas  properties,  and  amount of oil and gas  which can be  economically
produced depend  substantially  upon the prevailing  prices for oil and gas. Oil
and gas prices (and consequently the Programs' profitability) depend on a number
of



                                      -5-
<PAGE>



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  imports of oil and
gas, the level of consumer  product  demand (which can be heavily  influenced by
weather  patterns),  the level of domestic  oil and gas  production,  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.  In
addition, 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.  Predicting future prices is not possible. Concerning
past trends,  oil and gas prices in the United States have been highly  volatile
for many years.

      Over the past ten years average yearly  wellhead gas prices have generally
been in the $1.40 to $2.40 per Mcf range.  However,  due to  unusual  supply and
demand  circumstances  gas prices are  currently  substantially  higher than 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 obtaining  transportation  services provided by
pipelines.  Spot prices for gas increased  from  approximately  $2.34 per Mcf at
December 31, 1999 to  approximately  $9.23 per Mcf at December  31,  2000.  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 three  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  $9.25 per barrel.
However, production curtailment agreements among major oil producing nations and
other supply and demand  factors 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 oil  increased  from  approximately  $22.75 per barrel at
December 31, 1999 to approximately $23.75 per barrel at December 31, 2000.

      Future  prices  for both oil and gas will  likely  be  different  from the
prices in effect on December 31, 2000. While it is impossible to predict whether
future oil and gas prices will (i)



                                      -6-
<PAGE>



stabilize, (ii) increase, or (iii) decrease,  management believes it is unlikely
that  future  oil and gas prices  will  remain as high as those  experienced  at
December 31, 2000.


      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, 2000.

                              Well Statistics(1)

                            As of December 31, 2000

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

           Gross productive wells(2):
              Oil                                  -          2
              Gas                                 15          8
                                                  --         --
                Total                             15         10

           Net productive wells(3):
              Oil                                  -        .52
              Gas                               1.74        .87
                                                ----       ----
                Total                           1.74       1.39
----------

(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.



                                      -7-
<PAGE>




(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 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 during the year ended
December 31, 2000.


      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,
                                       --------------------------------------
                                         2000           1999            1998
                                       --------       --------       --------
1985-1 Program:
--------------
   Production:
     Oil (Bbls)(1)                          308            292            283
     Gas (Mcf)(2)                       140,971        141,030        165,027

   Oil and gas sales:
     Oil                               $  8,346       $  4,543       $  3,700
     Gas                                522,168        288,770        313,020
                                        -------        -------        -------
        Total                          $530,514       $293,313       $316,720
                                        =======        =======        =======

   Total direct operating expenses(3)  $130,392       $ 91,421       $108,815
                                        =======        =======        =======

   Direct operating expenses as a
     percentage of oil and gas sales      24.6%          31.2%          34.4%

   Average sales price:
     Per barrel of oil                   $27.10         $15.56         $13.07
     Per Mcf of gas                        3.70           2.05           1.90

   Direct operating expenses per
     equivalent Mcf of gas(4)            $  .91         $  .64         $  .65







                                      -9-
<PAGE>



                                             Year Ended December 31,
                                       --------------------------------------
                                         2000            1999          1998
                                       --------       --------       --------
1985-2 Program:
--------------
   Production:
     Oil (Bbls)(1)                        1,581          2,624          2,397
     Gas (Mcf)(2)                        41,237         84,745         48,746

   Oil and gas sales:
     Oil                               $ 46,628       $ 43,843       $ 30,679
     Gas                                150,415        155,186         95,421
                                        -------        -------        -------
        Total                          $197,043       $199,029       $126,100
                                        =======        =======        =======

   Total direct operating expenses(3)  $ 40,933       $ 99,111       $ 65,880
                                        =======        =======        =======
   Direct operating expenses as a
     percentage of oil and gas sales      20.8%          49.8%          52.2%

   Average sales price:
     Per barrel of oil                   $29.49         $16.71         $12.80
     Per Mcf of gas                        3.65           1.83(5)        1.96

   Direct operating expenses per
     equivalent Mcf of gas(4)            $  .81         $  .99         $ 1.04







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

(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)  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.
(3)  Includes lease operating expenses and production taxes.
(4)  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.
(5)  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.


                                      -10-
<PAGE>


      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, 2000.  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, 2000. Such prices were not escalated
except in  certain  circumstances  where  escalations  were  fixed  and  readily
determinable in accordance with applicable contract provisions. The high oil and
gas  prices at  December  31,  2000  have  caused  the  estimates  of  remaining
economically recoverable reserves, as well as the value placed on said reserves,
to be  substantially  higher  than  in  the  past  several  years,  particularly
considering the impact of depletion from production over the years. Any decrease
in these  prices would  result in a  corresponding  reduction in the estimate of
remaining reserves. 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, 2000. There can be
no assurance  that the prices used in  calculating  the net present value of the
Programs'  proved  reserves at December  31, 2000 will  actually be realized for
such  production.  Dyco  believes that it is unlikely that prices will remain at
their current high levels.

      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 these  reserve
estimates represent the most accurate assessment  possible,  the significance of
the subjective decisions required



                                      -11-
<PAGE>



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, 2000(1)

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

              Estimated proved reserves:
                Gas (Mcf)                                   748,607
                Oil and liquids (Bbls)                        1,119

              Net present value
                (discounted at 10% per annum)            $3,132,458

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

              Estimated proved reserves:
                Gas (Mcf)                                   269,805
                Oil and liquids (Bbls)                        8,062

              Net present value
                (discounted at 10% per annum)            $1,396,743

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

(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, 2000,  the 1985-1  Program's  properties  consist of 15
gross (1.74 net)  productive  wells.  The 1985-1 Program also owns a non-working
interest in one  additional  well.  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, 2000,  the 1985-2  Program's  properties  consist of 10
gross (1.39 net)  productive  wells.  The 1985-2 Program also owns a non-working
interest in one  additional  well.  Affiliates of the 1985-2  Program  operate 5
(45%) 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, 2000, the 1985-2  Program's  properties in the Anadarko
Basin  consist of 10 gross (1.39 net) wells.  Affiliates  of the 1985-2  Program
operate 4 (40%) of its wells.  As of December 31, 2000,  the 1985-2  Program had
estimated total proved reserves in the Anadarko Basin of  approximately  260,853
Mcf of gas and  approximately  8,062  barrels of crude oil, with a present value
(discounted at 10% per annum) of estimated future net cash flow of approximately
$1,354,841.


      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 2000.


                                    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.




                                      -14-
<PAGE>



                                1985-1 PROGRAM
                                --------------

                                 Repurchase Cash
                                                Price       Distributions
                                             ----------     -------------
           1999:
              First Quarter                     $ 98             $ -
              Second Quarter                      98               -
              Third Quarter                      156              25
              Fourth Quarter                     131               -

           2000:
              First Quarter                     $131             $25
              Second Quarter                     106               -
              Third Quarter                      166              30
              Fourth Quarter                     136              20


           2001:
              First Quarter                     $116             $40


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

                                 Repurchase Cash
                                                Price       Distributions
                                             ----------     -------------
           1999:
              First Quarter                     $64              $ -
              Second Quarter                     64                -
              Third Quarter                      64                -
              Fourth Quarter                     64                -

           2000:
              First Quarter                     $64              $20
              Second Quarter                     44               20
              Third Quarter                      56                -
              Fourth Quarter                     56                -

           2001:
              First Quarter                     $56              $25


      As of March 1, 2001,  the 1985-1 Program had 4,100 Units  outstanding  and
approximately  1,450 Limited  Partners of record.  The 1985-2  Program had 4,330
Units outstanding and approximately 1,400 Limited Partners of record.






                                      -15-
<PAGE>




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."





                                      -16-
<PAGE>

<TABLE>
<CAPTION>



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

                                                               December 31,
                                       --------------------------------------------------------
                                         2000        1999        1998        1997        1996
                                       --------    --------    --------    --------    --------
<S>                                    <C>         <C>         <C>         <C>         <C>
Summary of Operations:
   Oil and gas sales                   $530,514    $293,313    $316,720    $434,576    $408,826
   Total revenues                       533,940     295,675     319,820     438,162     411,171

   Lease operating expenses              93,412      70,168      86,362      58,594      63,559
   Production taxes                      36,980      21,253      22,453      35,055      29,783
   General and administrative
     expenses                            48,091      53,142      53,554      57,406      55,169
   Depreciation, depletion, and
     amortization of oil and gas
     properties                           8,007      18,737      25,912      34,859      27,369

   Net income                           347,450     132,375     131,539     252,248     235,291
     per Unit                             83.90       31.97       31.77       60.91       56.82
   Cash distributions                   310,575     103,525     207,050     351,985     186,345
     per Unit                                75          25          50          85          45

Summary Balance Sheet Data:
   Total assets                         293,289     232,383     210,519     283,653     375,408
   Partners' capital                    230,267     193,392     164,542     240,053     339,790






                                      -17-
<PAGE>




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

                                                         December 31,
                                     ----------------------------------------------------------
                                       2000         1999         1998        1997        1996
                                     --------     --------     --------    --------    --------
Summary of Operations
   Oil and gas sales                 $197,043     $199,029     $126,100    $187,883    $230,192
  Total revenues                      255,533      199,814      143,847     189,554     232,494

   Lease operating expenses            27,381       85,341       56,430      33,442      61,178
   Production taxes                    13,552       13,770        9,450      13,789      16,814
   General and administrative
     expenses                          34,202       50,768       51,504      55,613      53,296
   Depreciation, depletion, and
     amortization of oil and gas
     properties                         2,032        6,662        8,457      11,610       9,911

   Net income                         178,366       43,273       18,006      75,100      91,295
     per Unit                           40.78         9.89         4.12       17.17       20.87
   Cash distributions                 174,960          -         87,480     109,350     153,090
     per Unit                              40          -             20          25          35

Summary Balance Sheet Data:
   Total assets                       175,316      172,887      134,196     201,447     244,561
   Partners' capital                  168,419      165,013      121,740     191,214     225,464

</TABLE>


                                      -18-
<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 Programs'  revenues,  net
income or loss, cash flows, carrying value of oil and gas properties, and amount
of oil and gas which can be economically  produced depend substantially upon the
prevailing  prices for oil and gas.  Oil and gas prices  (and  consequently  the
Programs'  profitability)  depend 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  imports  of oil and gas,  the  level of  consumer
product demand (which can be heavily influenced by weather patterns),  the level
of domestic oil and gas production,  government regulations and taxes, the price
and availability of alternative fuels, the overall economic environment, and the
availability and capacity of transportation and processing



                                      -19-
<PAGE>



facilities.  The effect of these  factors on future oil and gas industry  trends
cannot be accurately predicted or anticipated. In addition, 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.  Predicting  future prices is not possible.  Concerning past trends,
oil and gas prices in the  United  States  have been  highly  volatile  for many
years.

      Over the past ten years average yearly  wellhead gas prices have generally
been in the $1.40 to $2.40 per Mcf range.  However,  due to  unusual  supply and
demand  circumstances  gas prices are  currently  substantially  higher than 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 obtaining  transportation  services provided by
pipelines.  Spot prices for gas increased  from  approximately  $2.34 per Mcf at
December 31, 1999 to  approximately  $9.23 per Mcf at December  31,  2000.  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 three  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  $9.25 per barrel.
However, production curtailment agreements among major oil producing nations and
other supply and demand  factors 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 oil  increased  from  approximately  $22.75 per barrel at
December 31, 1999 to approximately $23.75 per barrel at December 31, 2000.

      Future  prices  for both oil and gas will  likely  be  different  from the
prices in effect on December 31, 2000. While it is impossible to predict whether
future oil and gas prices will (i) stabilize,  (ii) increase, or (iii) decrease,
management believes it is unlikely that future oil and gas prices will remain as
high as those experienced at December 31, 2000.





                                      -20-
<PAGE>



      Results of Operations

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

                     Year Ended December 31, 2000 Compared
                        to Year Ended December 31, 1999
                     -------------------------------------

      Total oil and gas sales increased  $237,201 (80.9%) in 2000 as compared to
1999. This increase was primarily related to an increase in the average price of
gas sold.  Volumes of oil sold  increased 16 barrels,  while volumes of gas sold
decreased  59 Mcf in 2000 as  compared to 1999.  The  decrease in volumes of gas
sold was  primarily  due to (i) the  1985-1  Program's  receipt  of a  decreased
percentage  of sales in 2000 due to gas  balancing  on one well and (ii)  normal
declines in production.  These decreases were substantially offset by the 1985-1
Program's  receipt of an increased  percentage  of sales on another well in 2000
due to gas balancing.  Average oil and gas prices increased to $27.10 per barrel
and $3.70 per Mcf,  respectively,  in 2000 from  $15.56 per barrel and $2.05 per
Mcf, respectively, in 1999.

      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  increased  $38,971 (42.6%) in 2000 as compared to 1999. This
increase was  primarily due to (i) an increase in  production  taxes  associated
with the increase in oil and gas sales,  (ii) subsurface  repair and maintenance
expenses  incurred on one well in 2000,  and (iii) a positive prior period lease
operating expense  adjustment made by the operator on one well during 2000. As a
percentage of oil and gas sales,  these expenses decreased to 24.6% in 2000 from
31.2% in 1999.  This  percentage  decrease was primarily due to the increases in
the average prices of oil and gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $10,730  (57.3%)  in 2000 as  compared  to 1999.  This  decrease  was
primarily  due to (i) an  increase  in the gas price  used in the  valuation  of
reserves  at December  31,  2000 as  compared  to December  31, 1999 and (ii) an
upward  revision in the estimate of remaining gas reserves at December 31, 2000.
As a percentage  of oil and gas sales,  this  expense  decreased to 1.5% in 2000
from 6.4% in 1999.  This  percentage  decrease was  primarily  due to the dollar
decrease in depreciation,  depletion,  and amortization and the increases in the
average prices of oil and gas sold.

      General and  administrative  expenses  decreased  $5,051 (9.5%) in 2000 as
compared to 1999. As a percentage of oil and gas sales, these expenses decreased
to 9.1% in 2000 from 18.1% in 1999. This  percentage  decrease was primarily due
to the increase in oil and gas sales.



                                      -21-
<PAGE>




                     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  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.





                                      -22-
<PAGE>



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

                     Year Ended December 31, 2000 Compared
                        to Year Ended December 31, 1999
                     -------------------------------------

      Total oil and gas sales  decreased  $1,986  (1.0%) in 2000 as  compared to
1999. Of this decrease,  approximately $17,000 and $80,000,  respectively,  were
related to decreases in the volumes of oil and gas sold.  These  decreases  were
substantially  offset  by  increases  of  approximately   $20,000  and  $75,000,
respectively,  related to increases  in the average  prices of oil and gas sold.
Volumes  of  oil  and  gas  sold   decreased   1,043  barrels  and  43,508  Mcf,
respectively,  in 2000 as compared to 1999.  The decrease in volumes of oil sold
was  primarily  due to the sale of one well during  early 2000.  The decrease in
volumes of gas sold was  primarily  due to a positive gas  balancing  adjustment
made by the  operator  on one  well  during  1999.  Average  oil and gas  prices
increased  to $29.49 per barrel  and $3.65 per Mcf,  respectively,  in 2000 from
$16.71 per barrel and $1.83 per Mcf in 1999.

      During 2000,  the 1985-2  Program  sold one well for $59,449  representing
approximately 11% of its total reserves.  The proceeds from this sale would have
reduced  the net book  value of oil and gas  properties  by 185%,  significantly
altering  the  capitalized   cost/proved  reserves  relationship.   Accordingly,
capitalized costs were reduced by approximately 89% with the remainder  recorded
as a gain on sale of oil and gas properties.

      Oil and gas production  expenses  (including lease operating  expenses and
production  taxes)  decreased  $58,178 (58.7%) in 2000 as compared to 1999. This
decrease  was  primarily  due to (i) a  decrease  in  lease  operating  expenses
associated  with the  decrease  in  volumes of gas sold and (ii) the sale of one
well during early 2000.  As a percentage  of oil and gas sales,  these  expenses
decreased  to 20.8% in 2000 from 49.8% in 1999.  This  percentage  decrease  was
primarily due to the dollar decrease in oil and gas production  expenses and the
increases in the average prices of oil and gas sold.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
decreased  $4,630  (69.5%)  in 2000 as  compared  to  1999.  This  decrease  was
primarily  due to (i) the  decreases  in volumes of oil and gas sold and (ii) an
increase in the gas price used in the valuation of reserves at December 31, 2000
as compared to December 31, 1999.  As a  percentage  of oil and gas sales,  this
expense  decreased to 1.0% in 2000 from 3.3% in 1999. This  percentage  decrease
was  primarily  due to the  dollar  decrease  in  depreciation,  depletion,  and
amortization and the increases in the average prices of oil and gas sold.



                                      -23-
<PAGE>




      General and  administrative  expenses decreased $16,566 (32.6%) in 2000 as
compared to 1999.  This  decrease was  primarily  due to a change in  allocation
among the 1985-2 Program and other  affiliated  programs of indirect general and
administrative  expenses  reimbursed to the General Partner.  As a percentage of
oil and gas sales, these expenses decreased to 17.4% in 2000 from 25.5% in 1999.
This percentage decrease was primarily due to the dollar decrease in general and
administrative expenses.



                      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 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.

      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.



                                      -24-
<PAGE>




      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.


      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 2000 production  levels for future years,
the 1985-1 and 1985-2 Programs'  proved reserve  quantities at December 31, 2000
would have remaining lives of approximately  5.02 and 6.54 years,  respectively,
for gas reserves and 3.63 and 5.10 years, respectively,  for oil reserves. These
life of reserves  estimates are based on the current  estimates of remaining oil
and gas  reserves.  See "Item 2.  Properties"  for a discussion of these reserve
estimates.  Any  decrease  from the high oil and gas prices at December 31, 2000
may cause a decrease in the estimated life of said reserves.

      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.



                                      -25-
<PAGE>




      The 1985-2 Program's Statements of Cash Flows for the years ended December
31, 2000 and 1998 include  proceeds from the sale of oil and gas properties.  It
is possible that the 1985-2 Program's future 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 2000.
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."


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

      The Programs do not hold any market risk sensitive instruments.





                                      -26-
<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,
2000 and 1999,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  2000,  in  conformity  with
accounting principles generally accepted in the United States of America.  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 of America,
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 our opinion.







                                    PricewaterhouseCoopers LLP






Tulsa, Oklahoma
March 29, 2001



                                      -27-
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1985-1 LIMITED PARTNERSHIP
                                Balance Sheets
                          December 31, 2000 and 1999

                                    ASSETS
                                    ------
                                                           2000        1999
                                                         --------    --------
CURRENT ASSETS:
   Cash and cash equivalents                             $ 74,676    $ 68,872
   Accrued oil and gas sales                              111,904      55,595
                                                          -------     -------

     Total current assets                                $186,580    $124,467

NET OIL AND GAS PROPERTIES, utilizing the
   full cost method                                        90,269      98,289

DEFERRED CHARGE                                            16,440       9,627
                                                          -------     -------

                                                         $293,289    $232,383
                                                          =======     =======

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

CURRENT LIABILITIES:
   Accounts payable                                      $  5,920    $  5,053
   Gas imbalance payable                                    1,520        -
                                                          -------     -------
   Total current liabilities                             $  7,440    $  5,053

ACCRUED LIABILITY                                        $ 55,582    $ 33,938

PARTNERS' CAPITAL:
   General Partner, 41 general partner
     units                                               $  2,303    $  1,934
   Limited Partners, issued and
     outstanding 4,100 Units                              227,964     191,458
                                                          -------     -------

     Total Partners' capital                             $230,267    $193,392
                                                          -------     -------

                                                         $293,289    $232,383
                                                          =======     =======


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



                                      -28-
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1985-1 LIMITED PARTNERSHIP
                           Statements of Operations
             For the Years Ended December 31, 2000, 1999, and 1998


                                               2000        1999        1998
                                             --------    --------    --------

REVENUES:
   Oil and gas sales                         $530,514    $293,313    $316,720
   Interest                                     3,426       2,362       3,100
                                              -------     -------     -------

                                             $533,940    $295,675    $319,820

COSTS AND EXPENSES:
   Lease operating                           $ 93,412    $ 70,168    $ 86,362
   Production taxes                            36,980      21,253      22,453
   Depreciation, depletion, and
     amortization of oil and gas
     properties                                 8,007      18,737      25,912
   General and administrative                  48,091      53,142      53,554
                                              -------     -------     -------

                                             $186,490    $163,300    $188,281
                                              -------     -------     -------

NET INCOME                                   $347,450    $132,375    $131,539
                                              =======     =======     =======

GENERAL PARTNER (1%) - NET INCOME            $  3,475    $  1,324    $  1,315
                                              =======     =======     =======

LIMITED PARTNERS (99%) - NET INCOME          $343,975    $131,051    $130,224
                                              =======     =======     =======

NET INCOME per Unit                          $  83.90    $  31.97    $  31.77
                                              =======     =======     =======

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







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



                                      -29-
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1985-1 LIMITED PARTNERSHIP
                  Statements of Changes in Partners' Capital
             For the Years Ended December 31, 2000, 1999, and 1998


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

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
   Cash distributions                   ( 3,106)    ( 307,469)    ( 310,575)
   Net income                             3,475       343,975       347,450
                                          -----       -------       -------

Balances at Dec. 31, 2000                 2,303       227,964       230,267
                                          =====       =======       =======



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



                                      -30-
<PAGE>



                                DYCO OIL AND GAS PROGRAM
                                1985-1 LIMITED PARTNERSHIP
                                 Statements of Cash Flows
                   For the Years Ended December 31, 2000, 1999, and 1998

                                               2000         1999         1998
                                            ----------   ----------   ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                $347,450     $132,375     $131,539
   Adjustments to reconcile net
     income to net cash provided by
     operating activities:
     Depreciation, depletion, and
        amortization of oil and gas
        properties                              8,007       18,737       25,912
     (Increase) decrease in accrued
        oil and gas sales                   (  56,309)   (  14,079)      42,205
     (Increase) decrease in deferred
        charge                              (   6,813)      11,105    (   6,298)
     Increase (decrease) in accounts
        payable                                   867    (   1,740)         308
     Increase (decrease) in gas imbalance
        payable                                 1,520         -       (  13,160)
     Increase (decrease) in accrued
        liability                              21,644    (   5,246)      15,229
                                              -------      -------      -------
   Net cash provided by operating
     activities                              $316,366     $141,152     $195,735
                                              -------      -------      -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
     and gas properties                      $     13     $   -        $    492
   Additions to oil and gas properties           -            -       (   1,517)
                                              -------      -------      -------
   Net cash provided (used) by
     investing activities                    $     13     $   -       ($  1,025)
                                              -------      -------      -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                       ($310,575)   ($103,525)   ($207,050)
                                              -------      -------      -------
   Net cash used by financing activities    ($310,575)   ($103,525)   ($207,050)
                                              -------      -------      -------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                    $  5,804     $ 37,627    ($ 12,340)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                         68,872       31,245       43,585
                                              -------      -------      -------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                             $ 74,676     $ 68,872     $ 31,245
                                              =======      =======      =======

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



                                      -31-
<PAGE>



               DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                            Notes to Financial Statements
                For the Years Ended December 31, 2000, 1999, and 1998


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 1,638 (40.0%) of the Program's Units at
      December 31, 2000.

            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  obtaining   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



                                      -32-
<PAGE>



      using estimates of proved reserves.  The full cost amortization  rates per
      equivalent  Mcf of gas produced  during the years ended December 31, 2000,
      1999, and 1998 were $.06,  $0.13, and $0.16,  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, 2000 and 1999  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, 2000,  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 29,621 Mcf,  resulting in prepaid
      lease  operating  expenses of $16,440.  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.


      Accrued Liability

            The  Accrued  Liability  at December  31,  2000 and 1999  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, 2000,  cumulative  total gas sales  volumes
      for overproduced  wells exceeded the Program's pro-rata share of total gas
      production  from these wells by 100,147 Mcf,  resulting  in accrued  lease
      operating expenses of $55,582. 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.




                                      -33-
<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, 2000,  total sales exceeded the
      Program's  share of  estimated  total gas  reserves  on one well by $1,520
      (1,013  Mcf).  This  amount was  recorded  as a gas  imbalance  payable at
      December 31, 2000 in  accordance  with the sales  method.  At December 31,
      1999, 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.



                                      -34-
<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, 2000, 1999, and
      1998, such expenses totaled $48,091,  $53,142, and $53,554,  respectively,
      of which $34,644, $42,840, and $42,840, respectively,  were 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, 2000, 1999, and 1998:

        Purchaser                            2000    1999     1998
        ---------                            -----   -----    -----

        El Paso Energy
           Marketing Company                 89.7%   82.2%    79.2%
        Sanguine, Ltd.                         -     15.5%    11.3%


      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.




                                      -35-
<PAGE>




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.


      Capitalized Costs

            The  Program's  capitalized  costs  and  accumulated   depreciation,
      depletion,  amortization, and valuation allowance at December 31, 2000 and
      1999 were as follows:

                                                      December 31,
                                             -------------------------------
                                                 2000              1999
                                             -------------     -------------

      Proved properties                       $20,981,434       $20,981,447

      Less accumulated depreciation,
         depletion, amortization, and
         valuation allowance                 ( 20,891,165)     ( 20,883,158)
                                               ----------        ----------

      Net oil and gas properties              $    90,269       $    98,289
                                               ==========        ==========


      Costs Incurred

            The  Program  incurred  no  oil  and  gas  property  acquisition  or
      exploration  costs  during 2000,  1999,  and 1998.  Costs  incurred by the
      Program in connection with its oil and gas property development activities
      during 2000, 1999, and 1998 were as follows:

                                                  December 31,
                                          ----------------------------
                                           2000       1999       1998
                                          ------     ------     ------

      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,
     2000, 1999, and 1998. Proved reserves were estimated by petroleum engineers
     employed by affiliates of Dyco. Certain reserve information was reviewed by
     Ryder Scott



                                      -36-
<PAGE>



     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.




                                      -37-
<PAGE>
<TABLE>
<CAPTION>







                                         2000                     1999                      1998
                                 --------------------     ---------------------      -------------------
                                    Oil         Gas          Oil         Gas            Oil         Gas
                                  (Bbls)       (Mcf)       (Bbls)       (Mcf)         (Bbls)      (Mcf)
                                 --------   ---------     ---------   ---------      --------- ---------
<S>                              <C>        <C>           <C>         <C>            <C>       <C>
Proved reserves,
   beginning of year              1,435      772,092       1,970       716,034        1,525     771,783

Revisions of previous
   estimates                     (    8)     117,486      (  243)      197,088          728     109,278


Production                       (  308)    (140,971)     (  292)     (141,030)      (  283)   (165,027)
                                  -----      -------       -----       -------        ------    -------

Proved reserves,
   end of year                    1,119      748,607       1,435       772,092        1,970     716,034
                                  =====      =======       =====       =======        ======    =======

Proved developed reserves:
   Beginning of year              1,435      772,092       1,970       716,034        1,525     771,783
                                  -----      -------       -----       -------        ------    -------
   End of year                    1,119      748,607       1,435       772,092        1,970     716,034
                                  =====      =======       =====       =======        ======    =======

</TABLE>




                                      -38-
<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,  2000 using oil and gas prices of $24.54 per barrel and $9.00 per Mcf,
      respectively.


5.    QUARTERLY FINANCIAL DATA (Unaudited)

      Summarized  unaudited  quarterly  financial  data for 2000 and 1999 are as
      follows:





                                      -39-
<PAGE>



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

                                                 2000
                         ---------------------------------------------------
                           First       Second         Third        Fourth
                          Quarter      Quarter       Quarter       Quarter
                         ---------    ---------     ---------     ---------

Total Revenues           $94,511      $110,709      $123,369      $205,351
Gross Profit (1)          69,655        88,825        91,577       153,491
Net Income                47,692        77,437        76,968       145,353
Limited Partners'
   Net Income
   Per Unit                11.52         18.70         18.58         35.10




                                                 1999
                        ---------------------------------------------------
                           First       Second         Third        Fourth
                          Quarter      Quarter       Quarter       Quarter
                         --------     ---------     ---------     ---------

Total Revenues           $53,396      $ 77,081      $ 74,729      $ 90,469
Gross Profit (1)          35,241        54,865        53,589        60,559
Net Income                11,412        38,940        39,251        42,772
Limited Partners'
   Net Income
   Per Unit                 2.76          9.40          9.48         10.33

----------------------
(1) Total revenues less oil and gas production expenses.



                                      -40-
<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,
2000 and 1999,  and the results of its operations and its cash flows for each of
the three years in the period  ended  December  31,  2000,  in  conformity  with
accounting principles generally accepted in the United States of America.  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 of America,
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 our opinion.










                                    PricewaterhouseCoopers LLP






Tulsa, Oklahoma
March 29, 2001





                                      -41-
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1985-2 LIMITED PARTNERSHIP
                                Balance Sheets
                          December 31, 2000 and 1999

                                    ASSETS
                                    ------
                                                           2000        1999
                                                         --------    --------
CURRENT ASSETS:
   Cash and cash equivalents                             $ 90,826    $ 40,962
   Accrued oil and gas sales                               35,902      82,496
                                                          -------     -------
     Total current assets                                $126,728    $123,458

NET OIL AND GAS PROPERTIES, utilizing the
   full cost method                                        27,549      33,173

DEFERRED CHARGE                                            21,039      16,256
                                                          -------     -------

                                                         $175,316    $172,887
                                                          =======     =======

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

CURRENT LIABILITIES:
   Accounts payable                                      $  2,921    $  4,647
                                                          -------     -------

     Total current liabilities                           $  2,921    $  4,647

ACCRUED LIABILITY                                        $  3,976    $  3,227

PARTNERS' CAPITAL:
   General Partner, 44 general partner
     units                                               $  1,684    $  1,650
   Limited Partners, issued and
     outstanding, 4,330 Units                             166,735     163,363
                                                          -------     -------

     Total Partners' capital                             $168,419    $165,013
                                                          -------     -------
                                                         $175,316    $172,887
                                                          =======     =======




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



                                      -42-
<PAGE>



                           DYCO OIL AND GAS PROGRAM
                          1985-2 LIMITED PARTNERSHIP
                           Statements of Operations
             For the Years Ended December 31, 2000, 1999, and 1998


                                             2000       1999         1998
                                          ---------   ---------    --------

REVENUES:
   Oil and gas sales                      $197,043    $199,029     $126,100
   Interest                                  2,634         785        1,809
   Gain on sale of
     oil and gas properties                 55,856        -          15,938
                                           -------     -------      -------

                                          $255,533    $199,814     $143,847

COSTS AND EXPENSES:
   Lease operating                          27,381      85,341       56,430
   Production taxes                         13,552      13,770        9,450
   Depreciation, depletion, and
     amortization of oil and gas
     properties                              2,032       6,662        8,457
   General and administrative               34,202      50,768       51,504
                                           -------     -------      -------

                                          $ 77,167    $156,541     $125,841
                                           -------     -------      -------

NET INCOME                                $178,366    $ 43,273     $ 18,006
                                           =======     =======      =======

GENERAL PARTNER (1%) - NET
   INCOME                                 $  1,784    $    433     $    180
                                           =======     =======      =======

LIMITED PARTNERS (99%) - NET
   INCOME                                 $176,582    $ 42,840     $ 17,826
                                           =======     =======      =======

NET INCOME per Unit                       $  40.78    $   9.89     $   4.12
                                           =======     =======      =======

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




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



                                      -43-
<PAGE>



                         DYCO OIL AND GAS PROGRAM 1985-2
                               LIMITED PARTNERSHIP
                   Statements of Changes in Partners' Capital
              For the Years Ended December 31, 2000, 1999, and 1998


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


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
   Cash distributions                   ( 1,750)    ( 173,210)    ( 174,960)
   Net income                             1,784       176,582       178,366
                                          -----       -------       -------

Balances at Dec. 31, 2000                $1,684      $166,735      $168,419
                                          =====       =======       =======



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



                                      -44-
<PAGE>




                                 DYCO OIL AND GAS PROGRAM
                                1985-2 LIMITED PARTNERSHIP
                                 Statements of Cash Flows
                   For the Years Ended December 31, 2000, 1999, and 1998

                                               2000          1999         1998
                                            ----------    ----------   ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                $178,366      $43,273      $18,006
   Adjustments to reconcile net
     income to net cash provided
     by operating activities:
     Depreciation, depletion, and
        amortization of oil and gas
        properties                              2,032        6,662        8,457
     Gain on sale of oil and
        gas properties                      (  55,856)        -        ( 15,938)
     (Increase) decrease in accrued
        oil and gas sales                      46,594     ( 68,710)      17,288
     (Increase) decrease in
       deferred charge                      (   4,783)      37,919     (  6,015)
     Increase (decrease) in
        accounts payable                    (   1,726)         409        1,520
     Increase (decrease) in
        accrued liability                         749     (  4,991)         703
                                              -------       ------       ------
   Net cash provided by operating
     activities                              $165,376      $14,562      $24,021
                                              -------       ------       ------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil
     and gas properties                      $ 59,448      $  -         $21,600
   Additions to oil and gas
     properties                                  -        (     12)        -
                                              -------       ------       ------
   Net cash provided (used) by
     investing activities                    $ 59,448     ($    12)     $21,600
                                              -------       ------       ------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                       ($174,960)     $  -        ($87,480)
                                              -------       ------       ------
   Net cash used by financing
     activities                             ($174,960)     $  -        ($87,480)
                                              -------       ------       ------





                                      -45-
<PAGE>




NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                      $ 49,864      $14,550     ($41,859)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                         40,962       26,412       68,271
                                              -------       ------       ------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                             $ 90,826      $40,962      $26,412
                                              =======       ======       ======






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


                                      -46-
<PAGE>



               DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                         Notes to Financial Statements
             For the Years Ended December 31, 2000, 1999, and 1998



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  1,771  (40.9%) of the
      Program's Units at December 31, 2000.

            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  obtaining   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.



                                      -47-
<PAGE>



      Capitalized costs are depleted on the gross revenue method using estimates
      of proved reserves. The full cost amortization rates per equivalent Mcf of
      gas produced  during the years ended  December 31, 2000,  1999,  and 1998,
      were $0.04, $0.07, and $0.13,  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 second  quarter of 2000,  the Program sold one well for $59,449
      representing  approximately  11% of its total reserves.  The proceeds from
      this  sale  would  have  reduced  the net  book  value  of the oil and gas
      properties by 185%,  significantly  altering the  capitalized  cost/proved
      reserves  relationship.  Accordingly,  capitalized  costs were  reduced by
      approximately 11% with the remainder recorded as a gain on sale of oil and
      gas  properties.  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, 2000 and 1999  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, 2000,  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 36,026 Mcf,  resulting in prepaid
      lease  operating  expenses of $21,039.  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
      34,167 Mcf, resulting in prepaid lease operating expenses of $16,256.




                                      -48-
<PAGE>




      Accrued Liability

            The  Accrued  Liability  at December  31,  2000 and 1999  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, 2000,  cumulative  total gas sales  volumes
      for overproduced  wells exceeded the Program's pro-rata share of total gas
      production  from these  wells by 6,808  Mcf,  resulting  in accrued  lease
      operating  expenses of $3,976. 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 6,782  Mcf,  resulting  in
      accrued lease operating expenses of $3,227.


      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, 2000
      and 1999, 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.




                                      -49-
<PAGE>




      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.


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, 2000, 1999, and 1998,
      such expenses  totaled $34,202,  $50,768,  and $51,504,  respectively,  of
      which $20,568, $40,272, and $40,272, respectively,  were 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, 2000, 1999, and 1998:

           Purchaser                     2000     1999    1998
           ---------                     -----    -----   -----
           El Paso Energy
             Marketing Company           68.9%    66.7%   54.6%
           EOTT Energy
             Operating LP                  -      15.7%     -
           Mobil Oil Corporation         18.2%    13.4%   12.6%
           Koch Oil Company                -        -     11.4%

      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.




                                      -50-
<PAGE>




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.

      Capitalized Costs

            The  Program's  capitalized  costs  and  accumulated   depreciation,
      depletion,  amortization, and valuation allowance at December 31, 2000 and
      1999 were as follows:

                                                      December 31,
                                             -------------------------------
                                                 2000              1999
                                             -------------     -------------

     Proved properties                        $22,427,549       $22,431,141

     Less accumulated depreciation,
       depletion, amortization, and
       valuation allowance                   ( 22,400,000)     ( 22,397,968)
                                               ----------        ----------

     Net oil and gas properties               $    27,549       $    33,173
                                               ==========        ==========


      Costs Incurred

            The  Program  incurred  no  oil  and  gas  property  acquisition  or
      exploration  costs  during 2000,  1999,  and 1998.  Costs  incurred by the
      Program in connection with its oil and gas property development activities
      during 2000, 1999, and 1998 were as follows:

                                                     December 31,
                                             ---------------------------
                                              2000      1999      1998
                                              -----     -----     -----
            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,
      2000,  1999,  and  1998.  Proved  reserves  were  estimated  by  petroleum
      engineers employed by



                                      -51-
<PAGE>



      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.



                                      -52-
<PAGE>
<TABLE>
<CAPTION>







                                           2000                         1999                        1998
                                    ---------------------       ---------------------       ---------------------
                                       Oil         Gas             Oil         Gas             Oil         Gas
                                     (Bbls)       (Mcf)          (Bbls)       (Mcf)          (Bbls)       (Mcf)
                                    --------    ---------       --------    ---------       --------    ---------
<S>                                 <C>         <C>             <C>         <C>             <C>         <C>
Proved reserves,
   beginning of year                 13,401      312,855          7,743      264,024         10,595      307,346

Revisions of previous
   estimates                            367       13,225          8,282      133,576        (   455)       5,803

Sales of reserves                   ( 4,125)    ( 15,038)          -            -              -        (    379)

Production                          ( 1,581)    ( 41,237)       ( 2,624)    ( 84,745)       ( 2,397)    ( 48,746)
                                     ------      -------         ------      -------         ------      -------

Proved reserves,
   end of year                        8,062      269,805         13,401      312,855          7,743      264,024
                                     ======      =======         ======      =======         ======      =======

Proved developed reserves:
   Beginning of year                 13,401      312,855          7,743      264,024         10,595      307,346
                                     ------      -------         ------      -------         ------      -------
   End of year                        8,062      269,805         13,401      312,855          7,743      264,024
                                     ======      =======         ======      =======         ======      =======
--------------------

</TABLE>


                                      -53-
<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, 2000 using oil and gas prices of $23.75 per barrel and $9.19 per Mcf,
       respectively.


5.    QUARTERLY FINANCIAL DATA (Unaudited)

      Summarized  unaudited  quarterly  financial  data for 2000 and 1999 are as
      follows:





                                      -54-
<PAGE>



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

                                              2000
                        ---------------------------------------------------
                          First        Second         Third        Fourth
                         Quarter       Quarter       Quarter       Quarter
                        ---------     ---------     ---------     ---------

Total Revenues           $36,814      $103,253       $55,654       $59,812
Gross Profit (1)          24,206        96,276        44,559        49,559
Net Income                 9,623        89,359        35,844        43,540
Limited Partners'
   Net Income
   Per Unit                 2.20         20.43          8.19          9.96




                                              1999
                        ---------------------------------------------------
                          First        Second         Third        Fourth
                         Quarter       Quarter       Quarter       Quarter
                        ---------     ---------     ---------     ---------

Total Revenues           $25,147      $ 33,200       $41,502       $99,965
Gross Profit (1)           6,586        22,431        27,105        44,581
Net Income (Loss)       ( 13,099)       10,279        14,537        31,556
Limited Partners'
   Net Income (Loss)
   Per Unit                (2.99)         2.35          3.32          7.21

--------------------
(1) Total revenues less oil and gas production expenses.




                                      -55-
<PAGE>





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        49   President and Director

      Patrick M. Hall        42   Chief Financial Officer

      Judy K. Fox            50   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.

      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



                                      -56-
<PAGE>



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 2000 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, 2000:









                                      -57-
<PAGE>



             Compensation/Reimbursement to Dyco and its affiliates
                      Three Years Ended December 31, 2000

Type of Compensation/Reimbursement(1)                      Expense
-------------------------------------           -----------------------------
                                                 2000       1999       1998
                                                -------    -------    -------

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

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

   Reimbursements:
     General and Administrative,
       Geological, and Engineering
       Expenses and Direct
       Expenses(3)                              $34,644    $42,840    $42,840

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

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

   Reimbursements:
     General and Administrative,
       Geological, and Engineering
       Expenses and Direct
       Expenses(3)                              $20,568    $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



                                      -58-
<PAGE>



      connection  with their  management  and  operation  of the  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, 2000:



                                      -59-
<PAGE>

<TABLE>
<CAPTION>




                                                  Salary Reimbursement
                                           Three Years Ended December 31, 2000

                                                     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)          1998      -           -         -           -               -            -           -
                      1999      -           -         -           -               -            -           -
                      2000      -           -         -           -               -            -           -

All Executive
Officers,
Directors,
and Employees
as a group(2)         1998    $25,353       -         -           -               -            -           -
                      1999    $26,167       -         -           -               -            -           -
                      2000    $20,561       -         -           -               -            -           -
----------
(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>



                                      -60-
<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)          1998      -           -         -           -               -            -           -
                      1999      -           -         -           -               -            -           -
                      2000      -           -         -           -               -            -           -

All Executive
Officers,
Directors,
and Employees
as a group(2)         1998    $23,833       -         -           -               -            -           -
                      1999    $24,598       -         -           -               -            -           -
                      2000    $12,207       -         -           -               -            -           -
----------
(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>


                                      -61-
<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, 2001 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                     1,693  (40.0%)

        All directors, officers, and
           affiliates of Dyco as a group
           and Dyco (5 persons)                      1,693  (40.0%)

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

        Samson Resources Company                     1,771  (40.9%)

        All directors, officers, and
           affiliates of Dyco as a group
           and Dyco (5 persons)                      1,771  (40.9%)



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



                                      -62-
<PAGE>



and  drilling  opportunities  and the  nature of the  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.






                                      -63-
<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,  2000 and 1999 and for the
                  years ended  December  31, 2000,  1999,  and 1998 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.



                                      -64-
<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.

                  All other Exhibits are omitted as inapplicable.


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




                                      -65-
<PAGE>




      (b)   Reports on Form 8-K filed during the fourth quarter of 2000:

                  None.




                                      -66-
<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 29, 2001


                                    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 29, 2001
      -------------------     Director (Principal
         Dennis R. Neill      Executive Officer)

      /s/ Patrick M. Hall     Chief Financial                March 29, 2001
      -------------------     Officer (Principal
         Patrick M. Hall      Financial and
                              Accounting Officer)

      /s/ Judy K. Fox         Secretary                      March 29, 2001
      -------------------
         Judy K. Fox



                                      -67-
<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 29, 2001


                                    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 29, 2001
      -------------------     Director (Principal
         Dennis R. Neill      Executive Officer)

      /s/ Patrick M. Hall     Chief Financial                March 29, 2001
      -------------------     Officer (Principal
         Patrick M. Hall      Financial and
                              Accounting Officer)

      /s/ Judy K. Fox         Secretary                      March 29, 2001
      -------------------
         Judy K. Fox




                                      -68-
<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.



                                      -69-
<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.


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


                                      -70-