================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


        [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         FOR THE QUARTER ENDED JUNE 30, 2004 COMMISSION FILE NO. 2-71058




                           DAWSON GEOPHYSICAL COMPANY
                           --------------------------



       INCORPORATED IN THE STATE OF TEXAS                       75-0970548
                                                            ------------------
                                                            (I.R.S. EMPLOYER
                                                            IDENTIFICATION NO.)


                 508 WEST WALL, SUITE 800, MIDLAND, TEXAS 79701
                 ----------------------------------------------
                          (PRINCIPAL EXECUTIVE OFFICE)



                         TELEPHONE NUMBER: 432-684-3000



     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 12 preceding months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes  X        No
   -----        -----

     Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes           No  X
   -----        -----

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.


                CLASS                               Outstanding at June 30, 2004
                -----                               ----------------------------

     COMMON STOCK, $.33 1/3 PAR VALUE                      5,597,544 SHARES


================================================================================
<PAGE>

                           DAWSON GEOPHYSICAL COMPANY
                           --------------------------

                                      INDEX
                                      -----


                                                                        Page No.
                                                                        --------
Part I.      Financial Information:


Item 1.      Financial Statements

             Statements of Operations --
                   Three Months and Nine Months Ended June
                   30, 2004 and 2003 ........................................  3

             Balance Sheets --
                   June 30, 2004 and September 30, 2003 .....................  4

             Statements of Cash Flows --
                   Nine Months Ended June 30, 2004 and 2003 .................  5


             Notes to Financial Statements ..................................  6




Item 2.      Management's Discussion and Analysis of
                   Financial Condition and Results of
                   Operations ...............................................  9


Item 3.      Quantitative and Qualitative Disclosures
                   About Market Risk ........................................ 12


Item 4.      Controls and Procedures ........................................ 12




Part II.     Other Information .............................................. 13






                                       -2-
<PAGE>
                           DAWSON GEOPHYSICAL COMPANY
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE><CAPTION>
                                                                Three Months Ended June 30,         Nine Months Ended June 30,
                                                              ------------------------------      ------------------------------
                                                                  2004              2003              2004              2003
                                                              ------------      ------------      ------------      ------------
<S>                                                           <C>               <C>               <C>               <C>
Operating revenues                                            $ 17,112,000      $ 11,291,000      $ 47,790,000      $ 36,897,000
Operating costs:
            Operating expenses                                  13,504,000        11,046,000        38,457,000        33,762,000
            General and administrative                             648,000           580,000         1,867,000         1,775,000
            Depreciation                                         1,156,000         1,148,000         3,381,000         3,271,000
                                                              ------------      ------------      ------------      ------------
                                                                15,308,000        12,774,000        43,705,000        38,808,000

Income (loss) from operations                                    1,804,000        (1,483,000)        4,085,000        (1,911,000)
Other income:
            Interest income                                         58,000            73,000           175,000           256,000
            Gain (loss) on disposal of assets                       (1,000)               --            (4,000)           21,000
            Gain (loss) on sale of short-term investments          (15,000)               --           (15,000)           52,000
            Other                                                  143,000             3,000           253,000           126,000
                                                              ------------      ------------      ------------      ------------
Income (loss) before income tax                                  1,989,000        (1,407,000)        4,494,000        (1,456,000)

Income tax (expense) benefit:
            Current                                                     --                --                --                --
            Deferred                                                    --                --                --                --
                                                              ------------      ------------      ------------      ------------


Net income (loss)                                             $  1,989,000      $ (1,407,000)     $  4,494,000      $ (1,456,000)
                                                              ============      ============      ============      ============

Net income (loss) per common share                            $       0.36      $      (0.26)     $       0.81      $      (0.27)
                                                              ============      ============      ============      ============

Net income (loss) per common share-assuming dilution          $       0.35      $      (0.26)     $       0.80      $      (0.27)
                                                              ============      ============      ============      ============

Weighted average equivalent common shares outstanding            5,584,442         5,487,794         5,535,741         5,483,514
                                                              ============      ============      ============      ============

Weighted average equivalent common shares
   outstanding-assuming dilution                                 5,681,372         5,487,794         5,601,703         5,483,514
                                                              ============      ============      ============      ============
</TABLE>

SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.

                                        3
<PAGE>
                           DAWSON GEOPHYSICAL COMPANY
                                 BALANCE SHEETS


<TABLE><CAPTION>
                                                                    June 30,        September 30,
                                                                      2004              2003
                                                                  ------------      ------------
                                                                   (Unaudited)
<S>                                                               <C>               <C>
                                 ASSETS

CURRENT ASSETS:
            Cash and cash equivalents                             $  3,153,000      $  3,389,000
            Short-term investments                                   4,155,000         8,623,000
            Accounts receivable, net of allowance
                for doubtful accounts of $127,000
                in each period                                      16,769,000         9,713,000
            Prepaid expenses                                           503,000           287,000
                                                                  ------------      ------------
                      Total current assets                          24,580,000        22,012,000

PROPERTY, PLANT AND EQUIPMENT                                       88,867,000        81,585,000
            Less accumulated depreciation                          (63,033,000)      (60,805,000)
                                                                  ------------      ------------

                      Net property, plant and equipment             25,834,000        20,780,000
                                                                  ------------      ------------

                                                                  $ 50,414,000      $ 42,792,000
                                                                  ============      ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
            Accounts payable                                      $  3,077,000      $  1,237,000
            Accrued liabilities:
                Payroll costs and other taxes                          941,000           478,000
                Other                                                  621,000           415,000
                                                                  ------------      ------------

                      Total current liabilities                      4,639,000         2,130,000
                                                                  ------------      ------------

STOCKHOLDERS' EQUITY:
            Preferred stock-par value $1.00 per share;
                5,000,000 shares authorized, none outstanding               --                --
            Common stock-par value $.33 1/3 per share;
                10,000,000 shares authorized, 5,597,544 and
                5,487,794 shares issued and outstanding in
                each period                                          1,866,000         1,829,000
            Additional paid-in capital                              39,661,000        38,931,000
            Other comprehensive income, net of tax                    (111,000)           37,000
            Retained earnings (deficit)                              4,359,000          (135,000)
                                                                  ------------      ------------

                      Total stockholders' equity                    45,775,000        40,662,000
                                                                  ------------      ------------

                                                                  $ 50,414,000      $ 42,792,000
                                                                  ============      ============
</TABLE>

SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.

                                        4
<PAGE>
                           DAWSON GEOPHYSICAL COMPANY
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE><CAPTION>
                                                             Nine Months Ended June 30,
                                                          ------------------------------
                                                              2004              2003
                                                          ------------      ------------
<S>                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                    $  4,494,000      $ (1,456,000)

Adjustments to reconcile net income (loss) to net
   cash provided (used) by operating activities:
     Depreciation                                            3,381,000         3,271,000
     Loss on disposal of assets                                  4,000           (21,000)
     Loss on sale of short-term investments                     15,000           (52,000)
     Non-cash compensation                                      92,000            75,000
     Other                                                     (64,000)           34,000

Change in current assets and liabilities:
     Increase in accounts receivable                        (7,056,000)          256,000
     Increase in prepaid expenses                             (216,000)         (161,000)
     Decrease in income taxes receivable                       400,000
     Increase in accounts payable                            1,840,000         1,094,000
     Increase in accrued liabilities                           669,000           234,000
                                                          ------------      ------------

Net cash provided (used) by operating activities             3,159,000         3,674,000
                                                          ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from disposal of assets                           35,000            25,000
     Capital expenditures                                   (8,475,000)       (6,039,000)
     Proceeds from sale of short-term investments            2,973,000         5,964,000
     Proceeds from maturity of short-term investments        7,550,000         4,000,000
     Acquisition of short-term investments                  (6,245,000)       (3,002,000)
                                                          ------------      ------------

Net cash provided by (used in) investing activities         (4,162,000)          948,000

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from exercise of stock options                   767,000                --

Net increase (decrease) in cash and cash equivalents          (236,000)        4,622,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR               3,389,000         1,309,000
                                                          ------------      ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                $  3,153,000      $  5,931,000
                                                          ============      ============

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for income taxes         $     14,000      $         --
                                                          ============      ============

NON CASH INVESTING ACTIVITIES:
     Unrealized gain (loss) on investments                $   (148,000)     $    169,000
                                                          ============      ============
</TABLE>

SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.

                                        5
<PAGE>
                           DAWSON GEOPHYSICAL COMPANY
                           --------------------------

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   BASIS OF PRESENTATION, OPINION OF MANAGEMENT

Although the information furnished is unaudited, in the opinion of management of
the Registrant, the accompanying financial statements reflect all adjustments,
consisting only of normal recurring accruals, necessary for a fair presentation
of the financial condition and results of operations necessary for the periods
presented. The results of operations for the three months and the nine months
ended June 30, 2004, are not necessarily indicative of the results to be
expected for the fiscal year.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q report pursuant to certain
rules and regulations of the Securities and Exchange Commission. These financial
statements should be read with the financial statements and notes included in
the Company's 2003 Form 10-K.

CRITICAL ACCOUNTING POLICIES

The following accounting policies require management assumptions and estimates
which could result in materially different amounts to be reported if conditions
or underlying circumstances were to change.

Revenue Recognition
-------------------

The Company recognizes revenues when services are performed. The Company also
receives reimbursements for certain out-of-pocket expenses under the terms of
its master contracts. Amounts billed to clients are recorded in revenue at the
gross amount including out-of-pocket expenses which will be reimbursed by the
client.

Allowance for Doubtful Accounts
-------------------------------

Management prepares its allowance for doubtful accounts receivable based on its
past experience of historical write-offs and review of past due accounts. The
inherent volatility of the energy industry's business cycle can cause swift and
unpredictable changes in the financial stability of the Company's customers.

Impairment of Long-lived Assets
-------------------------------

Long-lived assets are reviewed for impairment when triggering events occur
suggesting a deterioration in the asset's recoverability or fair value.
Recognition of an impairment is required if future expected net cash flows are
insufficient to recover the carrying value of the amounts. Management's forecast
of future cash flow used to perform impairment analysis includes estimates of
future revenues and future gross margins. If the Company is unable to achieve
these cash flows, management's estimates would be revised potentially resulting
in an impairment charge in the period of revision.

                                        6
<PAGE>
Depreciable Lives of Property, Plant and Equipment
--------------------------------------------------

Property, Plant and Equipment is capitalized at historical cost and depreciated
over the useful life of the asset. Management's estimation of this useful life
is based on circumstances that exist in the seismic industry and information
available at the time of the purchase of the asset. As circumstances change and
new information becomes available these estimates could change.

Stock-Based Compensation
------------------------

In accordance with the Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees", no compensation is recorded for stock options or
other stock-based awards that are granted to employees or non-employee directors
with an exercise price equal to or above the common stock price on the grant
date. There were stock-based awards granted in the second quarter to the outside
directors and to certain employees.

The Company accounts for stock-based compensation utilizing the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25 "Accounting for
Stock Issued to Employees" ("APB 25") and related interpretations. The following
pro forma information, as required by Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"), as
amended by Statement of Financial Accounting Standards No. 148 ("SFAS 148"),
presents net income and earnings per share information as if the stock options
issued since February 2, 1999 were accounted for using the fair value method.
The fair value of stock options issued for each year was estimated at the date
of grant using the Black-Scholes option pricing model.

The SFAS 123 pro forma information for the three months and the nine months
ended June 30, 2004 and 2003 is as follows:

<TABLE><CAPTION>
                                                          Three Months Ended June 30          Nine Months Ended June 30
                                                         -----------------------------      -----------------------------
                                                             2004             2003              2004             2003
                                                         ------------     ------------      ------------     ------------
<S>                                                      <C>              <C>               <C>              <C>
Net income (loss), as reported                           $  1,989,000     $ (1,407,000)     $  4,494,000     $ (1,456,000)
Add: Stock-based employee compensation expense
     included in net income (loss), net of tax                     --               --            73,000           75,000
Deduct: Stock-based employee compensation expense
     determined under fair value based method (SFAS
     123), net of tax                                         (79,000)         (76,000)         (310,000)        (358,000)
                                                         ------------     ------------      ------------     ------------
     Net income (loss), pro forma                        $  1,910,000     $(41,483,000)     $  4,257,000     $ (1,739,000)
                                                         ============     ============      ============     ============

Basic:
     Net income (loss) per common share, as reported     $       0.36     $      (0.26)     $       0.81     $      (0.27)
                                                         ============     ============      ============     ============
     Net income (loss) per common share, pro forma       $       0.34     $      (0.27)     $       0.77     $      (0.32)
                                                         ============     ============      ============     ============

Diluted:
     Net income (loss) per common share, as reported     $       0.35     $      (0.26)     $       0.80     $      (0.27)
                                                         ============     ============      ============     ============
     Net income (loss) per common share, pro forma       $       0.34     $      (0.27)     $       0.76     $      (0.32)
                                                         ============     ============      ============     ============
</TABLE>


                                        7
<PAGE>
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) has announced it will require
all public companies to expense the fair value of employee stock awards. The
final requirements will be effective for fiscal years beginning after December
31, 2004. The impact to the Company's financial statements will be in the form
of additional compensation expense upon the award of any stock options. The
amount of the compensation expense recognized by the Company is dependent on the
value of the Company's common stock and the number of options awarded.

2.   NET INCOME PER COMMON SHARE

The Company accounts for earnings per share in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("Statement 128").
Statement 128 replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share. All earnings per
share amounts for all periods have been presented to conform to the Statement
128 requirements.

The following table sets forth the computation of basic and diluted net income
(loss) per common share:
<TABLE><CAPTION>
                                                       Three Months Ended June 30          Nine Months Ended June 30
                                                      -----------------------------      -----------------------------
                                                          2004             2003              2004             2003
                                                      ------------     ------------      ------------     ------------
<S>                                                   <C>              <C>               <C>              <C>
NUMERATOR:
     Net income and numerator for basic and
     diluted net income per common share-income
     available to common stockholders                 $  1,989,000     $ (1,407,000)     $  4,494,000     $ (1,456,000)
                                                      ------------     ------------      ------------     ------------
DENOMINATOR:
     Denominator for basic net income (loss) per
     common share-weighted average common shares         5,584,442        5,487,794         5,535,741        5,483,514
         Effect of dilutive securities-employee
           stock options                                    96,930               --            65,962               --
                                                      ------------     ------------      ------------     ------------
         Denominator for diluted net income per
           common share-adjusted weighted average
           common shares and assumed conversions         5,681,372        5,487,794         5,601,703        5,483,514

         Net income (loss) per common share           $        .36     $       (.26)     $        .81     $       (.27)
                                                      ============     ============      ============     ============

         Net income (loss) per common share-
           assuming dilution                          $        .35     $       (.26)     $        .80     $       (.27)
                                                      ============     ============      ============     ============
</TABLE>

     Employee stock options to purchase shares of common stock were outstanding
during fiscal year 2004 and 2003 but were not included in the computation of
diluted net income (loss) per share because either (i) the employee stock
options' exercise price was greater than the average market price of the common
stock of the Company, or (ii) the Company had a net loss from continuing
operations and, therefore, the effect would be antidilutive.

                                        8
<PAGE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's
financial statements. In addition, in reviewing the Company's financial
statements it should be noted that the Company's revenues fluctuate in response
to activity levels in the oil and gas exploration and production sector and
additionally fluctuations in the Company's results of operations may occur due
to commodity prices, weather, land use permitting and other factors.

FORWARD LOOKING STATEMENTS

All statements other than statements of historical fact included in this report,
including without limitation, statements under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and plans and objectives of
management of the Company for future operations, are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. When used in this report, words such as
"anticipate", "believe", "estimate", "expect", "intend", and similar
expressions, as they relate to the Company or its management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. Actual results
could differ materially from those contemplated by the forward-looking
statements as a result of certain factors, including but not limited to
dependence upon energy industry spending, weather problems, inability to obtain
land use permits, the volatility of oil and gas prices, and the availability of
capital resources. Such statements reflect the current views of the Company with
respect to future events and are subject to these and other risks, uncertainties
and assumptions relating to the operations, results of operations, growth
strategy and liquidity of the Company. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by this paragraph. The Company
assumes no obligation to update any such forward-looking statements.

OVERVIEW

The Company's continued improved performance was due to increased petroleum
industry demand for the Company's high resolution 3-D seismic surveys, its
expanded operations, modest price increases along with increased payments for
lost time due to weather. The Company has been and is currently involved in the
application of high resolution techniques over previously surveyed areas.

The Company's order book exceeds six months of operations. The stability in the
order book is the result of improving market conditions, the Company's
reputation throughout the industry as a quality provider of leading edge
technology, technical expertise and experience in the field of geophysics, and
an industry model Health, Safety and Environmental program. Six data acquisition
crews have operated continuously throughout the fiscal year with a seventh crew
placed into operations late in the second quarter. Seven crews worked during the
Company's third quarter with an eighth crew being placed into service on July
12, 2004. The Company's data channels and supporting equipment are fully
deployed.

The Company has responded to opportunities to increase its data channel count
through the open market at favorable prices. By responding to these
opportunities, the Company's capital expenditures increased in fiscal 2003, and
the fiscal 2004 number reflects the same strategy to satisfy client demand for
increased channel count. The Company has increased its data channel capacity
more than 50 percent in the last five years. In addition the fiscal 2004 capital
expenditures include deployment of two recording crews, energy sources, and
vehicles. Capital expenditures in fiscal 2003 and 2004 have been funded with
operating cash flow and existing cash reserves.

                                        9
<PAGE>
Even though demand for the Company's services is related to crude oil and
natural gas prices, production results are enhanced by favorable weather and
timely permits for rights-of-way.


RESULTS OF OPERATIONS

The Company's operating revenues for the first nine months of fiscal 2004
increased 29.5% from $36,897,000 to $47,790,000. For the three months ended June
30, 2004, operating revenues totaled $17,112,000 versus $11,291,000 for the same
period of fiscal 2003, a 51.6% increase. Revenues have been positively impacted
in the first nine months of fiscal 2004 by stable pricing with modest
improvement and the continuous operations of its crews.

Operating expenses for the nine months ended June 30, 2004 totaled $38,457,000
versus $33,762,000 for the same period of fiscal 2003, an increase of 13.9%. For
the quarter ended June 30, 2004, operating expenses totaled $13,504,000 versus
$11,046,000. In fiscal 2003 the Company began with five crews in operation and
expanded to six in November 2002. In fiscal 2004 the Company began with six
crews and expanded to seven in March 2004. The Company has eight crews operating
beginning July 12, 2004. The increase in operating expenses consists primarily
of costs associated with the increase in personnel necessary for its crews.

General and administrative expenses for the nine months ended June 30, 2004
totaled $1,867,000, an increase of $92,000 from the same period of fiscal 2003.
For the quarter ended June 30, 2004 general and administrative expenses totaled
$648,000 an increase of $68,000 compared to the same quarter of fiscal 2003.
General and administrative expenses represent approximately 4% of revenues. The
dollar increase is due to Sarbanes Oxley compliance and to increased personnel
for seven crews.

Depreciation for the nine months ended June 30, 2004 totaled $3,381,000 as
compared to $3,271,000 for the nine months ended June 30, 2003. There was
virtually no change in depreciation for the quarter ended June 30, 2004 as
compared to the same period of the prior year. Assets purchased during the years
with relatively large capital expenditures before the restricted budgets
beginning in fiscal 1999 are becoming fully depreciated. Conversely, capital
expenditures purchased in fiscal 2003 and in fiscal 2004 reflect the strategy to
satisfy client demand for increased channel count by responding to opportunities
in the open market at favorable prices.

Total operating costs for the first nine months of fiscal 2004 were $43,705,000,
an increase of 12.6%, from the same period of fiscal 2003 due to the factors
described above. For the quarter ended June 30, 2004, total operating costs of
$15,308,000 represent a 19.8% increase as compared to the same period of the
prior fiscal year. There is a high proportion of relatively fixed total
operating costs (including personnel costs of active crews and depreciation
costs) inherent in the Company's business. Margins are improved in fiscal 2004
due to the demand for the Company's services resulting in improved pricing and
improved productivity.

For the first nine months of 2004, no income tax expense was recorded due to the
anticipated utilization of net operating loss carryforward and the uncertainty
of future profitability due to the cyclical nature of the business.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

Net cash provided by operating activities of $3,159,000 for the nine months
ended June 30, 2004 primarily reflects net income and changes in components of
working capital. The increase in accounts receivable of $7,056,000 for the first
nine months of fiscal 2004 is a direct result of the increase in revenues. The
Company considers its accounts receivable, net of the allowance for doubtful
accounts, collectible.

                                       10
<PAGE>
Net cash used in investing activities in the first nine months of fiscal 2004
represents management of short-term investments and use of proceeds for capital
expenditures and working capital.

The exercise of stock options which occurred during fiscal 2004 were made by
officers of the Company and other employees granted options in 1999 and 2001
from an incentive stock option plan.


CAPITAL EXPENDITURES

The Company continually strives to supply market demand with technologically
advanced 3-D data acquisition recording systems and leading edge data processing
capabilities. The Company maintains equipment in and out of service in
anticipation of increased future demand of the Company's services. In addition,
the Company continues to monitor the development of the three-component seismic
approach. The Company believes that it is in position to respond to demand for
this technological advancement of the seismic industry.

CAPITAL RESOURCES

The Company believes that its capital resources, including its short-term
investments and cash flow from operations are adequate to meet its current
operational needs and finance capital needs as determined by market demand and
technological developments. The Company is currently not subject to any
financing arrangements; however, it believes that financing through traditional
sources is available, if necessary.


CRITICAL ACCOUNTING POLICIES

The following accounting policies require management assumptions and estimates
which could result in materially different amounts to be reported if conditions
or underlying circumstances were to change.

Revenue Recognition
-------------------

The Company recognizes revenues when services are performed. The Company also
receives reimbursements for certain out-of-pocket expenses under the terms of
its master contracts. Amounts billed to clients are recorded in revenue at the
gross amount including out-of-pocket expenses which will be reimbursed by the
client.

Allowance for Doubtful Accounts
-------------------------------

Management prepares its allowance for doubtful accounts receivable based on its
past experience of historical write-offs and review of past due accounts. The
inherent volatility of the energy industry's business cycle can cause swift and
unpredictable changes in the financial stability of the Company's customers.

Impairment of Long-lived Assets
-------------------------------

Long-lived assets are reviewed for impairment when triggering events occur
suggesting a deterioration in the asset's recoverability or fair value.
Recognition of an impairment is required if future expected net cash flows are
insufficient to recover the carrying value of the amounts. Management's forecast
of future cash flow used to perform impairment analysis includes estimates of
future revenues and future gross margins. If the Company is unable to achieve
these cash flows, management's estimates would be revised potentially resulting
in an impairment charge in the period of revision.

                                       11
<PAGE>
Depreciable Lives of Property, Plant and Equipment
--------------------------------------------------

Property, Plant and Equipment is capitalized at historical cost and depreciated
over the useful life of the asset. Management's estimation of this useful life
is based on circumstances that exist in the seismic industry and information
available at the time of the purchase of the asset. As circumstances change and
new information becomes available these estimates could change.

Stock-Based Compensation
------------------------

In accordance with the Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, no compensation is recorded for stock options or
other stock-based awards that are granted to employees or non-employee directors
with an exercise price equal to or above the common stock price on the grant
date.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) has announced it will require
all public companies to expense the fair value of employee stock awards. The
final requirements will be effective for fiscal years beginning after December
31, 2004. The impact to the Company's financial statements will be in the form
of additional compensation expense upon the award of any stock options. The
amount of the compensation expense recognized by the Company is dependent on the
value of the Company's common stock and the number of options awarded.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The primary sources of market risk include fluctuations in commodity prices
which effect demand for and pricing of the Company's services and interest rate
fluctuations. At June 30, 2004 the Company had no indebtedness. The Company's
short-term investments were fixed-rate and the Company does not necessarily
intend to hold them to maturity, and therefore, the short-term investments
expose the Company to the risk of earnings or cash flow loss due to changes in
market interest rates. As of June 30, 2004, the carrying value of the
investments approximate fair value. The Company has not entered into any hedge
arrangements, commodity swap agreements, commodity futures, options or other
derivative financial instruments. The Company does not currently conduct
business internationally so it is generally not subject to foreign currency
exchange rate risk.


Item 4.  CONTROLS AND PROCEDURES

Within the 90 day period prior to the filing date of this Quarterly Report on
Form 10-Q, the Company, under the supervision, and with the participation, of
its management, including its principal executive officer and principal
financial officer, performed an evaluation of the design and operation of the
Company's disclosure controls and procedures (as defined in Securities and
Exchange Act Rule 13a-14(c)). Based on that evaluation, the Company's principal
executive officer and principal financial officer concluded that such disclosure
controls and procedures are effective to ensure that material information
relating to the Company is accumulated and communicated to the Company's
management and made known to the principal executive officer and principal
financial officer, particularly during the period for which this periodic report
was being prepared.

No significant changes were made in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date
the controls were evaluated as discussed above.


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<PAGE>

Part II.                        OTHER INFORMATION


Item 6.           Exhibits and Reports on Form 8-K

                  During the quarter ended June 30, 2004:

                  A Form 8-K was filed by the Company on June 6, 2004 to
                  announce the Company's intention to field an additional
                  seismic data acquisition crew.

                  A Form 8-K was filed by the Company on May 25, 2004 to file
                  the Dawson Geophysical Company Code of Business Conduct and
                  Ethics.

                  A Form 8-K was filed by the Company on April 29, 2004 to
                  announce operating results for the second quarter ended March
                  31, 2004.















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<PAGE>

                                    SIGNATURE


          Pursuant to the requirements of the Securities Exchange Act of 1934,
          the Registrant has duly caused this report to be signed on its behalf
          by the undersigned, thereunto duly authorized.




                                          DAWSON GEOPHYSICAL COMPANY
                                          --------------------------
                                                 (REGISTRANT)



                                          By:  /s/ L. Decker Dawson
                                               ----------------------
                                          L. Decker Dawson
                                          Chairman of the Board of Directors and
                                          Chief Executive Officer



                                          /s/ Christina W. Hagan
                                          ---------------------------
                                          Christina W. Hagan
                                          Executive Vice President, Treasurer,
                                          Secretary and Chief Financial Officer




DATE:  July 27, 2004
       -------------







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