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 quarterly period ended June 30, 1998.

   [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
           EXCHANGE ACT OF 1934
           
                  For the transition period from            to

                         Commission file number 0-27732

                        DAWSON PRODUCTION SERVICES, INC.
             (Exact name of registrant as specified in its charter)


           TEXAS                                       74-2231546
 (State or other jurisdiction                       (I.R.S. Employer
       or organization)                            Identification No.)

   112 E. Pecan Street, Suite 1000
       San Antonio, Texas                                78205  
(Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (210) 476-0420

                                 NOT APPLICABLE
      (Former name, former address and former fiscal year, if changed since
last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes  [X]           No  [ ]

     The number of shares outstanding of each of the issuer's classes of common
stock as of August 17, 1998: Common Stock, $0.01 par value per share- 11,100,465
shares.

<PAGE>
                        Dawson Production Services, Inc.
                               Index to Form 10-Q



                              

PART I.  FINANCIAL INFORMATION                                 PAGE

   Item 1. Financial Statements (Unaudited)

      Consolidated Balance Sheets -
      March 31, 1997 and June 30, 1998...........................1

      Consolidated Statements of Operations -
      Three Months Ended June 30, 1997 and
      June 30, 1998..............................................2

      Consolidated Statements of Cash Flows -
      Three Months Ended June 30, 1997 and
      June 30, 1998..............................................3

      Notes to Interim Condensed Consolidated Financial 
      Statements ................................................4

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations........6

PART II.  OTHER INFORMATION......................................9

SIGNATURE.......................................................11

EXHIBITS

<PAGE>
       PART I

ITEM 1.  FINANCIAL STATEMENTS(unaudited)
                                                
                                                
                        DAWSON PRODUCTION SERVICES, INC.
                                                
                           CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)
<TABLE>
<CAPTION>
ASSETS                                          
                                                                       March 31,    June 30,              
                                                                         1998         1998     
                                                                      -----------   --------
<S>                                                                   <C>          <C>      
Current assets:
     Cash and cash equivalents ....................................   $  24,964    $  30,400
     Trade receivables, substantially all pledged (net of allowance
         for doubtful accounts of $966 and $922, respectively) ....      39,632       36,779
     Other receivables ............................................         848        1,281
     Income taxes receivable ......................................       1,624          224
     Prepaid expenses and other ...................................         573        1,399
                                                                      ---------    ---------
               Total current assets ...............................      67,641       70,083
Net property and equipment ........................................     164,846      168,296
Goodwill and other assets .........................................      57,866       59,045
                                                                      ---------    ---------
               Total assets .......................................   $ 290,353    $ 297,424
                                                                      =========    =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable .............................................   $   8,444    $   8,333
     Accrued liabilities ..........................................       8,825       12,296
     Current portion of long-term debt ............................         353          403
     Current portion of obligations under capital leases ..........       1,086        1,336
                                                                      ---------    ---------
               Total current liabilities ..........................      18,708       22,368
                                                                      ---------    ---------
Long-term debt, net of current portion ............................       4,058        4,163
Obligations under capital leases, net of current portion ..........       3,145        4,444
Senior notes ......................................................     140,000      140,000
Deferred income taxes .............................................      10,943       11,594
Shareholders' equity :
    Preferred stock, no par value, 561 shares authorized, none
         issued and outstanding ...................................        --           --   
    Common stock, $.01 par value, 20,561 shares authorized,
         11,178 and 11,203 issued and 11,078 and 11,100 ...........         112          112
         outstanding, respectively
    Paid-in capital ...............................................      97,707       98,001
    Retained earnings .............................................      17,069       18,156
    Notes receivable from officers ................................        (142)        (142)
                                                                      ---------    ---------
                                                                        114,746      116,127
    Less treasury common stock, at cost ...........................      (1,247)      (1,272)
                                                                      ---------    ---------
               Total shareholders' equity .........................     113,499      114,855
Commitments and contingencies
                                                                      ---------    ---------
               Total liabilities and shareholders' equity .........   $ 290,353    $ 297,424
                                                                      =========    =========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       1

<PAGE>
                        DAWSON PRODUCTION SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                (dollars in thousands, except per share amounts)

                                                          Three Months Ended
                                                               June 30,
                                                         ---------------------
                                                           1997          1998
                                                         --------      -------
Revenues ...........................................     $ 54,732      $ 51,798
                                                         --------      --------
Costs and expenses:
     Operating .....................................       36,104        35,336
     General and administrative ....................        7,578         5,834
     Depreciation and amortization .................        5,181         6,362
                                                         --------      --------
               Total costs and expenses ............       48,863        47,532
                                                         --------      --------
                 Operating income ..................        5,869         4,266
                                                         --------      --------
Other income and expenses:
     Interest expense ..............................        3,324         3,469
     Other expense (income), net ...................         (556)         (994)
                                                         --------      --------
               Total other income and expenses .....        2,768         2,475
                                                         --------      --------
Income before income taxes .........................        3,101         1,791
Provision for income taxes .........................        1,225           704
                                                         --------      --------
Net income .........................................     $  1,876      $  1,087
                                                         ========      ========

Earnings per common share:
     Basic .........................................     $   0.17      $   0.10
     Diluted .......................................     $   0.17      $   0.10

Weighted average common and common equivalent
  shares outstanding:
     Basic .........................................       11,126        11,099
     Diluted .......................................       11,245        11,235



          See accompanying notes to consolidated financial statements.

                                       2

<PAGE>
                        DAWSON PRODUCTION SERVICES, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                           JUNE 30,
                                                                    --------------------
                                                                       1997        1998
                                                                     --------    -------
<S>                                                                 <C>         <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income .................................................   $  1,876    $  1,087
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
 PROVIDED BY OPERATING ACTIVITIES:
     Depreciation and amortization ..............................      5,181       6,362
     Allowance for doubtful accounts ............................        (75)         44
     (Gain) loss on sale of assets ..............................       --          (686)
     Increase in deferred income taxes ..........................        166         651
     (Increase) decrease in receivables .........................    (14,615)      3,776
     Increase in prepaid expense and other ......................       (666)       (826)
     Decrease (increase) in other assets ........................       (103)       (124)
     Decrease in accounts payable ...............................     (3,747)       (111)
     Increase (decrease) in accrued expenses ....................      6,326       3,471
                                                                    --------    --------
                 Net cash provided (used) by operating activities     (5,657)     13,644

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisitions ...............................................       --        (4,356)
     Additions to property and equipment ........................     (2,157)     (4,913)
     Proceeds from sales of property ............................       --         1,344
                                                                    --------    --------
                  Net cash used in investing activities .........     (2,157)     (7,925)
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on long-term debt .................................       (108)        (96)
     Capital lease payments .....................................        (17)       (206)
     Purchase of treasury stock .................................       --           (25)
     Exercise of common stock options and warrants ..............       --            44
                                                                    --------    --------
                   Net cash used in financing activities ........       (125)       (283)
                                                                    --------    --------
                   Net decrease in cash .........................     (7,939)      5,436
      Cash and cash equivalents at the beginning of the period ..     42,330      24,964
                                                                    --------    --------
      Cash and cash equivalents at the end of the period ........   $ 34,391    $ 30,400
                                                                    ========    ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   CASH PAID FOR:
                Interest ........................................   $     96    $    183
                Income taxes ....................................         53          90
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
    Assets acquired under capital lease .........................        670       1,756
    Common Stock issued to seller in  acquisition ...............       --           250
    Issuance of note payable for acquisition ....................       --           250

</TABLE>

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
PART I--FINANCIAL INFORMATION

DAWSON PRODUCTION SERVICES, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.  GENERAL

      The unaudited consolidated financial statements included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, pursuant to such rules and
regulations. These unaudited consolidated financial statements should be read in
conjunction with Dawson Production Services, Inc. (the "Company's") audited
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended March 31, 1998.

      The unaudited consolidated financial information included herein reflects
all adjustments, consisting only of normal recurring adjustments, which are
necessary, in the opinion of management, for a fair presentation of the
Company's financial position and results of operations for the interim periods
presented. The interim information contained herein is not necessarily
indicative of the results to be expected for the full year.

2.  ACQUISITIONS

          In April 1998, the Company acquired the assets of a small liquid
service company in Texas. The aggregate purchase price was approximately $2.2
million.

3.  COMMITMENTS AND CONTINGENCIES

      The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position or results of operations.

4.  RECLASSIFICATION

      Certain amounts, as previously presented, have been reclassified to
conform with the current period consolidated financial statement presentation.

5.   EARNINGS PER SHARE

      In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share (FAS
128)," which establishes standards for computing and presenting earnings per
share. The Company has adopted this Standard for the period ended June 30, 1998.
Prior period amounts have been recalculated to conform with the reporting
requirements of FAS 128.

                                       4
<PAGE>
      Basic earnings per share is computed by deducting preferred dividends from
net income in order to determine net income attributable to common shareholders.
This amount is then divided by the weighted average number of common shares
outstanding. Diluted earnings per share is determined by dividing net income
plus tax effected convertible debt interest by the weighted average number of
common shares outstanding during the year after giving effect for dilutive
potential common shares arising from stock options, convertible debt, and/or
preferred stock assumed converted to common stock.

The computation of shares used in diluted earnings per share is as follows:

                                                         THREE MONTHS
                                                         ENDED JUNE 30, 
                                                      -------------------
                                                        1997        1998
                                                       ------      ------
Weighted average outstanding common shares ........    11,126      11,099
Effect of dilutive securities-stock options .......       119         136
                                                       ------      ------
Shares used in earnings per share computation .....    11,245      11,235
                                                       ======      ======

6.  NEW PRONOUNCEMENTS

      In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130 "Reporting
Comprehensive Income," which establishes standards for reporting and display of
comprehensive income and its components in the financial statements. SFAS No.
130 is effective for fiscal years beginning after December 15, 1997. The Company
had no other comprehensive income. The FASB also issued in June 1997 SFAS No.
131 "Disclosures About Segments of an Enterprise and Related Information," which
establishes new standards for the way public companies disclose information
about operating segments, products and services, geographic areas and major
customers. SFAS No. 131 is effective for financial statements for fiscal years
beginning after December 15, 1997.  The Company believes SFAS 131 will not have
a material impact on its financial statements and disclosures.

      In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes standards of accounting
and reporting for derivative instruments and for hedging activities. It requires
that all derivatives be recognized as either assets and liabilities in the
statement of financial position and measures these instruments at fair value.
This statement is effective for financial statements for years beginning after
June 15, 1999. The Company believes SFAS No. 133 will not have a material impact
on its financial statements and disclosures.

7.  SUBSEQUENT EVENTS


       On August 11, 1998, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") between the Company, Midland Acquisition Corp.
("Midland") and Key Energy Group, Inc. ("Key"). The Merger Agreement provides
for the tender offer (the "Offer") by Midland to purchase for cash all
outstanding shares of the Company's Common Stock at $17.50 per share. The Merger
Agreement also provides, among other things, that following consummation of the
Offer and satisfaction or waiver of the conditions set forth in the Merger
Agreement, Midland will be merged with and into the Company, the separate
corporate existence of Midland will cease and the Company will continue as the
surviving corporation and a directly wholly owned subsidiary of Key.

      On or about August 14, 1998, the Company entered into an Asset Purchase
Agreement pursuant to which it has agreed, subject to the satisfaction of
certain post-closing covenants, including due diligence, to purchase
substantially all of the operating assets of Hellums Services II, Inc., Superior
Completion Services, Inc., South Texas Disposal, Inc. and Elsik II, Inc. (the
"Hellums Group") in exchange for $46,000,000 in cash (the "Hellums
Transaction"). The parties have agreed to close the Hellums Transaction on or
about the date of the closing of the transactions contemplated by the Merger
Agreement with Key (the "Key Transaction"); provided, however, that if the Key
Transaction does not close, the Company has the option of paying $11,000,000 of
the purchase price for the Hellums Group in the form of 880,000 shares of the
Company's common stock. If the Key Transaction does not close, the Company
anticipates that, in order to close the Hellums Transaction, it will be required
to borrow funds to pay the cash portion of the purchase price by drawing down on
its bank line of credit. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations- Liquidity and Capital Resources; -Credit
Facilities and Long Term Debt."

                                       5
<PAGE>
ITEM  2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
           CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

   This Quarterly Report on Form 10-Q includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical information provided herein are
forward-looking and may contain information about financial results, economic
conditions, trends and known uncertainties. The Company cautions the reader that
actual results could differ materially from those expected by the Company
depending on the outcome of certain factors, including without limitation (i)
fluctuations in the price of oil and natural gas, competition, operating risk,
acquisition risk, liquidity and capital requirements and the effect of
government and environmental regulations and (ii) adverse changes in the market
for the Company's services. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to release publicly the results of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereon, including without limitation,
changes in the Company's business strategy or planned capital expenditures, or
to reflect the occurrence of unanticipated events.

Subsequent Events

      On August 11, 1998, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") between the Company, Midland Acquisition Corp.
("Midland") and Key Energy Group, Inc. ("Key"). The Merger Agreement provides
for the tender offer (the "Offer") by Midland to purchase for cash all
outstanding shares of the Company's Common Stock at $17.50 per share. The Merger
Agreement also provides, among other things, that following consummation of the
Offer and satisfaction or waiver of the conditions set forth in the Merger
Agreement, Midland will be merged with and into the Company, the separate
corporate existence of Midland will cease and the Company will continue as the
surviving corporation and a directly wholly owned subsidiary of Key.

      On or about August 14, 1998, the Company entered into an Asset Purchase
Agreement pursuant to which it has agreed, subject to the satisfaction of
certain post-closing covenants, including due diligence, to purchase
substantially all of the operating assets of Hellums Services II, Inc., Superior
Completion Services, Inc., South Texas Disposal, Inc. and Elsik II, Inc. (the
"Hellums Group") in exchange for $46,000,000 in cash (the "Hellums
Transaction"). The parties have agreed to close the Hellums Transaction on or
about the date of the closing of the transactions contemplated by the Merger
Agreement with Key (the "Key Transaction"); provided, however, that if the Key
Transaction does not close, the Company has the option of paying $11,000,000 of
the purchase price for the Hellums Group in the form of 880,000 shares of the
Company's common stock. If the Key Transaction does not close, the Company
anticipates that, in order to close the Hellums Transaction, it will be required
to borrow funds to pay the cash portion of the purchase price by drawing down on
its bank line of credit. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations- Liquidity and Capital Resources; -Credit
Facilities and Long Term Debt."


Results of Operations - Quarters Ended June 30, 1998 and 1997

   Revenues. Revenues were $51.8 million in the quarter ended June 30, 1998, a
5% decrease compared with revenues of $54.7 million in the quarter ended June
30, 1997. Compared to the same period in 1997, revenues in the quarter ended
June 30, 1998 decreased by 11% in the workover line of business, while the
liquid and production services lines of business increased 6%. The overall
decrease in revenues is primarily attributable to the decline in the price of
crude oil. The decline in oil prices has decreased utilization primarily in the
Gulf Coast and Permian Basin Regions.

   Operating Costs. Operating costs for the quarter ended June 30, 1998 were
$35.3 million, a decrease of 2% from $36.1 million for the quarter ended June
30, 1997. This decrease corresponds with the decline in revenue. Operating costs
as a percent of revenue increased to 68% for the quarter ended June 30, 1998 as
compared to 66% for the quarter ended June 30, 1997.

                                       6
<PAGE>
   General and Administrative Expenses. General and administrative expenses for
the quarter ended June 30, 1998 were $5.8 million, a decrease of 23% from $7.6
million for the quarter ended June 30, 1997. This decrease was due primarily to
the Company responding to the decrease in revenue by reducing administrative
costs. As a percentage of revenues, general and administrative expenses 
decreased to 11% for the quarter ended June 30, 1998, compared to 14% for the 
quarter ended June 30, 1997.

   Depreciation and Amortization. Depreciation and amortization expense for the
quarter ended June 30, 1998 was $6.4 million, an increase of 23% from $5.2
million for the quarter ended June 30, 1997. This increase was due to a
substantial increase in the Company's asset base resulting from acquisitions in
fiscal 1998.

   Interest Expense. Interest expense in the first quarter of 1998 was $3.5
million compared to $3.3 million in the first quarter of 1997. This increase is
substantially due to additional debt incurred for acquisitions in fiscal 1998.

   Other Income. Other income and expense (net) in the first quarter of 1998,
was $1.0 million compared to $0.6 million in the first quarter of 1997. This
increase is attributable primarily to gain on sale of assets due to an auction.

   Net Income. For the quarter ended June 30, 1998, the Company had net income
of $1.1 million, a 42% decrease in earnings over the $1.9 million for the
quarter ended June 30, 1997. The decrease in earnings is attributed to the
decline in the price of crude oil, which reduced utilization of the Company's
services.

Liquidity and Capital Resources

   Cash Flows. The Company had cash and cash equivalents of $30.4 million at
June 30, 1998 compared to $25.0 million at March 31, 1998. Working capital was
$47.7 million and $48.9 million at June 30, 1998 and March 31, 1998,
respectively. The Company used $9.3 million and $2.1 million for investing
activities for capital expenditures for the three months ended June 30, 1998 and
1997, respectively. The Company anticipates that fiscal 1999 capital
expenditures will consist of approximately $21.7 million for improvements to its
existing equipment and expanding capital additions. Acquisitions of additional
assets and businesses are expected to continue to be an important part of the
Company's strategy for growth. The Company would, under certain circumstances,
need to obtain additional financing to fund such acquisitions. If the Company is
unable to locate suitable acquisitions or to obtain financing on acceptable
terms, the Company's growth will be adversely affected. While the Company
believes it will be able to negotiate favorable acquisitions and financing,
there can be no assurance that this will be the case.

   Credit Facilities and Long-term Debt. The Company has available a bank line
of credit to finance temporary working capital requirements and to support the
issuance of letters of credit. The maximum availability is the lesser of (i)
$50.0 million or (ii) a calculated amount based on a percentage of accounts
receivable meeting a certain criteria. This line of credit is secured by a first
lien security interest on the Company's accounts receivable. Borrowings under
this line of credit mature on February 20, 1999. The Company had not drawn
against the Working Line as of June 30, 1998, but has used the line to secure
letters of credit totaling $1.8 million related to its worker's compensation
insurance program.

YEAR 2000 ISSUE

The Year 2000 issue is a result of computer programs being written using two
digits rather than four to define the applicable year. The Company has conducted
a preliminary review of its computer systems to identify those that could be
affected by the Year 2000 issue and has developed an informal implementation
plan to resolve the issue. The Company is utilizing both internal and external
resources to correct or reprogram and test the systems for the Year 2000
compliance. It is anticipated that all remediation efforts will be completed by
December 31, 1998, allowing adequate time for testing. The Company is also in
the process of communicating to primary processing vendors and customers
(including customers that utilize Electronic Data Interchange [EDI]) to help the
Company identify and resolve any Year 2000 issues. However, no estimates can be
made as to the potential adverse impact that may result from the failure of the
Company's vendors, customers and others with which it conducts business to
become Year 2000 compliant. The Company does not expect the amounts required to
be expensed for any Year 2000 issues over the next two years to have a material
effect on its financial position of results of operations.


                                       7

<PAGE>
Inflation

   Inflation has not had a significant impact on the Company's operations to
date.


                                       8
<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         See note 3 herein to the Notes to the Unaudited Consolidated

Financial Statements.

ITEM 2.  CHANGES IN SECURITIES

         Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters have been submitted to a vote of security holders
         during the quarter ended June 30, 1998.

ITEM 5.  OTHER INFORMATION

       On August 11, 1998, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") between the Company, Midland Acquisition Corp.
("Midland") and Key Energy Group, Inc. ("Key"). The Merger Agreement provides
for the tender offer (the "Offer") by Midland to purchase for cash all
outstanding shares of the Company's Common Stock at $17.50 per share. The Merger
Agreement also provides, among other things, that following consummation of the
Offer and satisfaction or waiver of the conditions set forth in the Merger
Agreement, Midland will be merged with and into the Company, the separate
corporate existence of Midland will cease and the Company will continue as the
surviving corporation and a directly wholly owned subsidiary of Key.

      On or about August 14, 1998, the Company entered into an Asset Purchase
Agreement pursuant to which it has agreed, subject to the satisfaction of
certain post-closing covenants, including due diligence, to purchase
substantially all of the operating assets of Hellums Services II, Inc., Superior
Completion Services, Inc., South Texas Disposal, Inc. and Elsik II, Inc. (the
"Hellums Group") in exchange for $46,000,000 in cash (the "Hellums
Transaction"). The parties have agreed to close the Hellums Transaction on or
about the date of the closing of the transactions contemplated by the Merger
Agreement with Key (the "Key Transaction"); provided, however, that if the Key
Transaction does not close, the Company has the option of paying $11,000,000 of
the purchase price for the Hellums Group in the form of 880,000 shares of the
Company's common stock. If the Key Transaction does not close, the Company
anticipates that, in order to close the Hellums Transaction, it will be required
to borrow funds to pay the cash portion of the purchase price by drawing down on
its bank line of credit. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations- Liquidity and Capital Resources; -Credit
Facilities and Long Term Debt."

                                       9
<PAGE>
ITEM 6.  EXHIBITS


      a.    10.27  Form Indemnification Agreement

            10.28  Amendment No. 1 to Executive Employment Agreement dated as of
                   April 1, 1998 between the Company and Michael E. Little

            10.29  Amendment No. 2 to Executive Employment Agreement dated
                   August 10, 1998 by and between the Company and Michael E.
                   Little

            10.30  Executive Employment Agreement dated July 1, 1998 between the
                   Company and James J. Byerlotzer

            10.31  Amendment No. 1 to Executive Employment Agreement dated as of
                   August 10, 1998 by and between the Company and James J.
                   Byerlotzer

            10.32  Executive Employment Agreement dated as of April 1, 1998
                   between the Company and P. Mark Stark

            10.33  Amendment No. 1 to Executive Employment Agreement dated as of
                   August 10, 1998 by and between the Company and P. Mark Stark

            10.34  Amendment No. 1 to Executive Employment Agreement dated as of
                   August 10, 1998 by and between the Company and Joseph Eustace

            10.35  Dawson Production Services, Inc. Employee Severance Pay Plan

            10.36  Resolution of the Board of Directors of the Company dated
                   August 7, 1998 amending the Rights Agreement

            10.37  Agreement and Plan of Merger dated on or about August 11,
                   1998 by and between the Company, Midland Acquisition Corp.
                   and Key Energy Group

            10.38  Asset Purchase Agreement dated August 14, 1998 by and between
                   Dawson Production Partners, L.P., Dawson Production Services,
                   Inc., Hellums Services II, Inc., Superior Completion
                   Services, Inc., South Texas Disposal, Inc., Elsik II, Inc.
                   and Roger D. Hellums, Charles C. Forbes, Jr., Robert W.
                   Radle, Jr. Ronald D. Brieden, John E. Crisp, Charles Talley
                   and James J. Acker.

            11.1   Earnings per share computations.


      b.     Reports on Form 8-K
            In a Current Report on Form 8-K dated July 30, 1998, the Company
      reported four resolutions amending the bylaws of the corporation.

                                       10

<PAGE>
     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, thereto duly authorized.


                                      DAWSON PRODUCTION SERVICES, INC.



                                      By: /s/ MICHAEL E. LITTLE
                                              Michael E. Little 
                                              Chief Executive Officer



                                      Date:   August 19, 1998