SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549



                                  FORM 10-Q


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


For the quarter ended                     Commission File Number
   June 30, 1998                             2-92702    (1985-1)
                                             2-92702-01 (1985-2)


                        DYCO 1985 OIL AND GAS PROGRAM
                          (TWO LIMITED PARTNERSHIPS)
            (Exact Name of Registrant as specified in its charter)



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



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



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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                        Yes     X               No
                            ------                    ------




                                       1
<PAGE>




                        PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

             DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                                BALANCE SHEETS
                                 (Unaudited)

                                    ASSETS

                                               June 30,        December 31,
                                                 1998             1997
                                              ----------       ------------

CURRENT ASSETS:
   Cash and cash equivalents                    $ 64,246          $ 43,585
   Accrued oil and gas sales                      47,939            83,721
                                                --------          --------
      Total current assets                      $112,185          $127,306

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                          125,410           141,913

DEFERRED CHARGE                                   14,434            14,434
                                                --------          --------
                                                $252,029          $283,653
                                                ========          ========

                      LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                             $  6,569          $  6,485
   Gas imbalance payable                          13,160            13,160
                                                --------          --------
      Total current liabilities                 $ 19,729          $ 19,645

ACCRUED LIABILITY                               $ 23,955          $ 23,955

PARTNERS' CAPITAL:
   General Partner, issued and
      outstanding, 41 units                     $  2,083          $  2,400
   Limited Partners, issued and
      outstanding, 4,100 units                   206,262           237,653
                                                --------          --------
      Total Partners' capital                   $208,345          $240,053
                                                --------          --------
                                                $252,029          $283,653
                                                ========          ========





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



                                       2
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)

                                                  1998              1997
                                                --------          --------

REVENUES:
   Oil and gas sales                             $74,001           $87,389
   Interest                                          328               892
                                                 -------           -------
                                                 $74,329           $88,281

COSTS AND EXPENSES:
   Oil and gas production                        $25,479           $21,278
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   8,144             8,079
   General and administrative
      (Note 2)                                    11,507            12,922
                                                 -------           -------
                                                 $45,130           $42,279
                                                 -------           -------

NET INCOME                                       $29,199           $46,002
                                                 =======           =======
GENERAL PARTNER (1%) - net income                $   292           $   460
                                                 =======           =======
LIMITED PARTNERS (99%) - net income              $28,907           $45,542
                                                 =======           =======
NET INCOME PER UNIT                              $  7.05           $ 11.11
                                                 =======           =======
UNITS OUTSTANDING                                  4,141             4,141
                                                 =======           =======



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



                                       3
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)

                                                  1998              1997
                                                --------          --------

REVENUES:
   Oil and gas sales                            $169,022          $237,346
   Interest                                        1,121             1,925
                                                --------          --------
                                                $170,143          $239,271

COSTS AND EXPENSES:
   Oil and gas production                       $ 51,796          $ 38,350
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                  16,503            29,674
   General and administrative
      (Note 2)                                    30,027            32,692
                                                --------          --------
                                                $ 98,326          $100,716
                                                --------          --------

NET INCOME                                      $ 71,817          $138,555
                                                ========          ========
GENERAL PARTNER (1%) - net income               $    718          $  1,386
                                                ========          ========
LIMITED PARTNERS (99%) - net income             $ 71,099          $137,169
                                                ========          ========
NET INCOME PER UNIT                             $  17.34          $  33.46
                                                ========          ========
UNITS OUTSTANDING                                  4,141             4,141
                                                ========          ========


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



                                       4
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)


                                                  1998              1997
                                               ----------         --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                   $ 71,817          $138,555
   Adjustments to reconcile net
      income to net cash provided
      by operating activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                16,503            29,674
      Decrease in accrued oil and
        gas sales                                 35,782            26,209
      Increase (decrease) in accounts
        payable                                       84         (     827)
                                                --------          --------
      Net cash provided by operating
        activities                              $124,186          $193,611
                                                --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Net cash provided by investing
      activities                                $      -          $      -
                                                --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                          ($103,525)        ($248,460)
                                                --------          --------
   Net cash used by financing
      activities                               ($103,525)        ($248,460)
                                                --------          --------

NET INCREASE (DECREASE) IN CASH AND
   CASH EQUIVALENTS                             $ 20,661         ($ 54,849)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                            43,585            86,724
                                                --------          --------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                $ 64,246          $ 31,875
                                                ========          ========



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



                                       5
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                                BALANCE SHEETS
                                 (Unaudited)

                                    ASSETS

                                              June 30,         December 31,
                                                1998              1997
                                             -----------       ------------

CURRENT ASSETS:
   Cash and cash equivalents                    $  7,165          $ 68,271
   Accrued oil and gas sales                      20,046            31,074
                                                --------          --------
      Total current assets                      $ 27,211          $ 99,345

NET OIL AND GAS PROPERTIES, utilizing
   the full cost method                           43,394            53,942

DEFERRED CHARGE                                   48,160            48,160
                                                --------          --------
                                                $118,765          $201,447
                                                ========          ========

                      LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                             $  4,718          $  2,718
                                                --------          --------
      Total current liabilities                 $  4,718          $  2,718

ACCRUED LIABILITY                               $  7,515          $  7,515

PARTNERS' CAPITAL:
   General Partner, issued and
      outstanding, 44 units                     $  1,065          $  1,912
   Limited Partners, issued and
      outstanding, 4,330 units                   105,467           189,302
                                                --------          --------
      Total Partners' capital                   $106,532          $191,214
                                                --------          --------
                                                $118,765          $201,447
                                                ========          ========


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



                                       6
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)

                                                  1998              1997
                                                --------          --------

REVENUES:
   Oil and gas sales                             $34,943          $54,036
   Interest                                          912               89
                                                 -------          -------
                                                 $35,855          $54,125

COSTS AND EXPENSES:
   Oil and gas production                        $16,051          $19,072
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   2,566            3,280
   General and administrative
      (Note 2)                                    10,910           12,380
                                                 -------          -------
                                                 $29,527          $34,732
                                                 -------          -------

NET INCOME                                       $ 6,328          $19,393
                                                 =======          =======
GENERAL PARTNER (1%) - net
   income                                        $    63          $   194
                                                 =======          =======
LIMITED PARTNERS (99%) - net
   income                                        $ 6,265          $19,199
                                                 =======          =======
NET INCOME PER UNIT                              $  1.45          $  4.43
                                                 =======          =======
UNITS OUTSTANDING                                  4,374            4,374
                                                 =======          =======




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



                                       7
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                           STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)

                                                  1998              1997
                                                --------          --------

REVENUES:
   Oil and gas sales                             $70,927          $93,632
   Interest                                        1,754              940
                                                 -------          -------
                                                 $72,681          $94,572

COSTS AND EXPENSES:
   Oil and gas production                        $35,770          $22,500
   Depreciation, depletion, and
      amortization of oil and gas
      properties                                   4,887            6,351
   General and administrative
      (Note 2)                                    29,226           32,018
                                                 -------          -------
                                                 $69,883          $60,869
                                                 -------          -------

NET INCOME                                       $ 2,798          $33,703
                                                 =======          =======
GENERAL PARTNER (1%) - net
   income                                        $    28          $   337
                                                 =======          =======
LIMITED PARTNERS (99%) - net
   income                                        $ 2,770          $33,366
                                                 =======          =======
NET INCOME PER UNIT                              $   .64          $  7.71
                                                 =======          =======
UNITS OUTSTANDING                                  4,374            4,374
                                                 =======          =======


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



                                       8
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                 (Unaudited)


                                                  1998              1997
                                                ---------         --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                    $ 2,798          $ 33,703
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Depreciation, depletion, and
        amortization of oil and gas
        properties                                 4,887             6,351
      Decrease in accrued oil and
        gas sales                                 11,028            14,917
      Increase (decrease) in accounts
        payable                                    2,000         (   1,761)
                                                 -------          --------
      Net cash provided by operating
        activities                               $20,713          $ 53,210
                                                 -------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from the sale of oil and
      gas properties                             $ 5,661          $  1,110
                                                 -------          --------
   Net cash provided by investing
      activities                                 $ 5,661          $  1,110
                                                 -------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                           ($87,480)        ($109,350)
                                                 -------          --------
   Net cash used by financing
      activities                                ($87,480)        ($109,350)
                                                 -------          --------

NET DECREASE IN CASH AND CASH
   EQUIVALENTS                                  ($61,106)        ($ 55,030)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                            68,271            86,273
                                                 -------          --------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD                                 $ 7,165          $ 31,243
                                                 =======          ========


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


                                       9
<PAGE>



             DYCO OIL AND GAS PROGRAM 1985-1 LIMITED PARTNERSHIP
             DYCO OIL AND GAS PROGRAM 1985-2 LIMITED PARTNERSHIP
                   CONDENSED NOTES TO FINANCIAL STATEMENTS
                                JUNE 30, 1998
                                  (Unaudited)


1.     ACCOUNTING POLICIES
      -------------------

      The balance  sheets as of June 30, 1998,  statements of operations for the
      three and six months ended June 30, 1998 and 1997,  and statements of cash
      flows for the six months  ended June 30, 1998 and 1997 have been  prepared
      by Dyco Petroleum  Corporation  ("Dyco"),  the General Partner of the Dyco
      Oil and Gas Program 1985-1 and 1985-2 Limited Partnerships  (individually,
      the  "1985-1  Program" or the  "1985-2  Program",  as the case may be, or,
      collectively, the "Programs"), without audit. In the opinion of management
      all  adjustments   (which  include  only  normal  recurring   adjustments)
      necessary  to present  fairly the  financial  position  at June 30,  1998,
      results of operations for the three and six months ended June 30, 1998 and
      1997, and changes in cash flows for the six months ended June 30, 1998 and
      1997 have been made.

      Information  and  footnote  disclosures  normally  included  in  financial
      statements  prepared in  accordance  with  generally  accepted  accounting
      principles  have been  condensed or omitted.  It is  suggested  that these
      financial  statements be read in conjunction with the financial statements
      and notes thereto included in the Programs' Annual Report on Form 10-K for
      the year ended December 31, 1997. The results of operations for the period
      ended June 30, 1998 are not  necessarily  indicative  of the results to be
      expected for the full year.

      The  limited  partners'  net  income  or loss per unit is based  upon each
      $5,000 initial capital contribution.


      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.  The Programs'  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



                                       10
<PAGE>



      ceiling (as defined by the Securities and Exchange Commission), the excess
      is charged to expense in the period 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.

      The provision for depreciation, depletion, and amortization of oil and gas
      properties is calculated by dividing the oil and gas sales dollars  during
      the  period by the  estimated  future  gross  income  from the oil and gas
      properties and applying the resulting  rate to the net remaining  costs of
      oil and gas properties that have been  capitalized,  plus estimated future
      development costs.


2.    TRANSACTIONS WITH RELATED PARTIES
      ---------------------------------

      Under the terms of each 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 three  months  ended June 30,  1998 and 1997 the
      1985-1  Program  incurred  such  expenses  totaling  $11,507 and  $12,922,
      respectively,  of which  $10,710  was  paid  each  period  to Dyco and its
      affiliates.  During the six months ended June 30, 1998 and 1997 the 1985-1
      Program incurred such expenses totaling $30,027 and $32,692, respectively,
      of which $21,420 was paid each period to Dyco and its  affiliates.  During
      the three months ended June 30, 1998 and 1997 the 1985-2 Program  incurred
      such expenses totaling $10,910 and $12,380, respectively, of which $10,068
      was paid each  period to Dyco and its  affiliates.  During  the six months
      ended June 30, 1998 and 1997 the 1985-2  Program  incurred  such  expenses
      totaling $29,226 and $32,018, respectively, of which $20,136 was paid each
      period to Dyco and its affiliates.

      Affiliates of the Programs  operate  certain of the Programs'  properties.
      Their policy is to bill the Programs  for all  customary  charges and cost
      reimbursements associated with these activities.





                                       11
<PAGE>



ITEM 2.     MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
            RESULTS OF OPERATIONS


USE OF FORWARD-LOOKING STATEMENTS AND ESTIMATES
-----------------------------------------------

      This Quarterly 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
      Quarterly 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, and otherwise indicated.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

      Net  proceeds  from the  Programs'  operations  less  necessary  operating
      capital  are  distributed  to  investors  on a  quarterly  basis.  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 the Programs' reserves which
      would result in a positive economic impact.




                                       12
<PAGE>




      The Programs'  available capital from  subscriptions has been spent on oil
      and gas drilling  activities.  There should be no further material capital
      resource commitments in the future. The Programs have no debt commitments.
      Cash for  operational  purposes  will be  provided  by current oil and gas
      production.

      The 1985-2 Program's Statement of Cash Flows for the six months ended June
      30, 1998 includes  proceeds from the sale of oil and gas properties during
      the first  quarter of 1998.  These  proceeds  were  included in the 1985-2
      Program's  cash  distributions  paid in June 1998. It is possible that the
      1985-2 Program's  repurchase  values and future cash  distributions  could
      decline as a result of the disposition of these  properties.  On the other
      hand,  the General  Partner  believes  there will be beneficial  operating
      efficiencies related to the 1985-2 Program's remaining properties. This is
      primarily due to the fact that the properties sold generally bore a higher
      ratio of  operating  expenses  as  compared  to  reserves  than the 1985-2
      Program's remaining properties.


RESULTS OF OPERATIONS
---------------------

      GENERAL DISCUSSION

      The following  general  discussion  should be read in conjunction with the
      analysis  of results of  operations  provided  below.  The most  important
      variable  affecting the Programs'  revenues is the prices received for the
      sale  of  oil  and  gas.  Predicting  future  prices  is  very  difficult.
      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. Such spot market sales are generally short-term in nature and
      are dependent upon the obtaining of  transportation  services  provided by
      pipelines. In addition, crude oil prices are at or near their lowest level
      in the past  decade  due  primarily  to the  global  surplus of crude oil.
      Management is unable to predict whether future oil and gas prices will (i)
      stabilize, (ii) increase, or (iii) decrease.




                                       13
<PAGE>




      1985-1 PROGRAM

      THREE  MONTHS  ENDED JUNE 30, 1998 AS COMPARED TO THE THREE  MONTHS  ENDED
      JUNE 30, 1997.

                                            Three Months Ended June 30,
                                            ---------------------------
                                                   1998             1997
                                                  -------          ------
      Oil and gas sales                           $74,001          $87,389
      Oil and gas production expenses             $25,479          $21,278
      Barrels produced                                 78              338
      Mcf produced                                 41,890           48,895
      Average price/Bbl                           $ 12.47          $ 17.62
      Average price/Mcf                           $  1.74          $  2.33

      As shown in the table  above,  total oil and gas sales  decreased  $13,388
      (15.3%) for the three  months ended June 30, 1998 as compared to the three
      months ended June 30, 1997.  Of this  decrease,  approximately  $5,000 and
      $16,000, respectively, were related to decreases in volumes of oil and gas
      sold and  approximately  $24,000  was related to a decrease in the average
      price of gas sold, which decreases were partially offset by an increase of
      approximately  $32,000  related  to a refund of prior oil sales the 1985-1
      Program  paid  during  1997.  Volumes  of oil and gas sold  decreased  260
      barrels and 7,005 Mcf,  respectively,  for the three months ended June 30,
      1998 as compared to the three months ended June 30, 1997.  The decrease in
      the volumes of gas sold was primarily due to normal declines in production
      from diminished gas reserves on four  significant  wells.  Average oil and
      gas prices decreased to $12.47 per barrel and $1.74 per Mcf, respectively,
      for the three  months ended June 30, 1998 from $17.62 per barrel and $2.33
      per Mcf, respectively, for the three months ended June 30, 1997.

      Oil and gas production  expenses  (including lease operating  expenses and
      production taxes) increased $4,201 (19.7%) for the three months ended June
      30,  1998 as  compared  to the three  months  ended  June 30,  1997.  This
      increase was primarily due to increased maintenance and repair expenses on
      two  wells  during  the  three  months  ended  June 30,  1998 and a refund
      received  during the three months ended June 30, 1997 from the operator on
      one well related to prior period  expenses.  This  increase was  partially
      offset by the decrease in  production  taxes due to decreased  oil and gas
      sales during the three  months  ended June 30, 1998  compared to the three
      months ended June 30, 1997.  As a percentage  of oil and gas sales,  these
      expenses  increased to 34.4% for the three months ended June 30, 1998 from
      24.3% for the three months ended June 30, 1997. This  percentage  increase
      was  primarily due to the decrease in the average price of gas sold during
      the three months ended June 30, 1998 as



                                       14
<PAGE>



      compared to the three months  ended June 30, 1997 and the dollar  increase
      in oil and gas production expenses discussed above.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      increased  $65 (0.8%) for the three months ended June 30, 1998 as compared
      to the three months ended June 30, 1997.  This  increase was primarily due
      to a decrease in the gas prices used in the  valuation of reserves at June
      30,  1998 as  compared to March 31, 1998 and an increase in the gas prices
      used in the  valuation  of  reserves at June 30, 1997 as compared to March
      31,  1997.  This  increase  was  partially  offset by (i) the  decrease in
      volumes of oil and gas sold and (ii)  significant  upward revisions in the
      estimates  of remaining  oil and gas  reserves at December 31, 1997.  As a
      percentage of oil and gas sales,  this expense  increased to 11.0% for the
      three months ended June 30, 1998 from 9.2% for the three months ended June
      30, 1997.

      General and administrative expenses decreased $1,415 (11.0%) for the three
      months  ended June 30, 1998 as compared to the three months ended June 30,
      1997.  This decrease  resulted  primarily from a decrease in  professional
      fees during the three  months ended June 30, 1998 as compared to the three
      months ended June 30, 1997.  As a percentage  of oil and gas sales,  these
      expenses remained  relatively constant at 15.5% for the three months ended
      June 30, 1998 and 14.8% for the three months ended June 30, 1997.

      SIX MONTHS  ENDED JUNE 30, 1998 AS  COMPARED TO THE SIX MONTHS  ENDED JUNE
      30, 1997.
 
                                                  Six Months Ended June 30,
                                                  -------------------------
                                                     1998           1997
                                                   --------       --------
      Oil and gas sales                            $169,022       $237,346
      Oil and gas production expenses              $ 51,796       $ 38,350
      Barrels produced                                  152            338
      Mcf produced                                   85,773        119,520
      Average price/Bbl                            $  13.90       $  17.62
      Average price/Mcf                            $   1.95       $   2.21

      As shown in the table  above,  total oil and gas sales  decreased  $68,324
      (28.8%)  for the six months  ended June 30,  1998 as  compared  to the six
      months ended June 30, 1997. Of this  decrease,  approximately  $74,000 was
      related to a decrease in volumes of gas sold and approximately $22,000 was
      related to a decrease in the average  price of gas sold,  which  decreases
      were partially offset by an increase of approximately $32,000 related to a
      refund of prior oil sales the 1985-1 Program paid during 1997.  Volumes of
      oil and gas sold decreased 186 barrels and 33,747 Mcf,  respectively,  for
      the six months ended June 30, 1998 as compared to the six



                                       15
<PAGE>



      months  ended June 30,  1997.  The decrease in the volumes of gas sold was
      primarily  due  to  positive  prior  period  volume  adjustments  made  by
      purchasers  on several wells during the six months ended June 30, 1997 and
      normal  declines  in  production  from  diminished  gas  reserves  on  one
      significant  well during the six months ended June 30,  1998.  Average oil
      and gas  prices  decreased  to  $13.90  per  barrel  and  $1.95  per  Mcf,
      respectively,  for the six  months  ended  June 30,  1998 from  $17.62 per
      barrel and $2.21 per Mcf, respectively,  for the six months ended June 30,
      1997.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes) increased $13,446 (35.1%) for the six months ended June
      30, 1998 as compared to the six months ended June 30, 1997.  This increase
      resulted  primarily  from credits  received from the operators on two sold
      wells  during the six months  ended June 30, 1997 for prior  period  lease
      operating  expenses.  As a percentage of oil and gas sales, these expenses
      increased  to 30.6% for the six months  ended June 30, 1998 from 16.2% for
      the six months ended June 30, 1997. This percentage increase was primarily
      due to the decrease in the average price of gas sold during the six months
      ended June 30, 1998 as compared to the six months  ended June 30, 1997 and
      the  dollar  increase  in the oil and gas  production  expenses  discussed
      above.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $13,171  (44.4%)  for the six  months  ended  June 30,  1998 as
      compared to the six months ended June 30,  1997.  This  decrease  resulted
      primarily  from  decreases  in volumes  of gas sold  during the six months
      ended June 30, 1998 as compared to the six months  ended June 30, 1997 and
      significant  upward  revisions in the  estimates of remaining  oil and gas
      reserves at December 31, 1997. As a percentage of oil and gas sales, these
      expenses  decreased  to 9.8% for the six months  ended June 30,  1998 from
      12.5% for the six months ended June 30, 1997. This percentage decrease was
      primarily  due to the upward  revisions in the  estimates of remaining oil
      and gas reserves discussed above.

      General and  administrative  expenses  decreased $2,665 (8.2%) for the six
      months  ended June 30, 1998 as  compared to the six months  ended June 30,
      1997. As a percentage of oil and gas sales,  these  expenses  increased to
      17.8% for the six months ended June 30, 1998 from 13.8% for the six months
      ended June 30, 1997.  This  percentage  increase was  primarily due to the
      decrease in oil and gas sales discussed above.



                                       16
<PAGE>




      1985-2 PROGRAM

      THREE  MONTHS  ENDED JUNE 30, 1998 AS COMPARED TO THE THREE  MONTHS  ENDED
      JUNE 30, 1997.

                                               Three Months Ended June 30,
                                               ---------------------------
                                                1998              1997
                                               -------           -------
      Oil and gas sales                        $34,943           $54,036
      Oil and gas production expenses          $16,051           $19,072
      Barrels produced                             734             1,556
      Mcf produced                              13,310            15,417
      Average price/Bbl                        $ 12.81           $ 19.29
      Average price/Mcf                        $  1.92           $  2.34

      As shown in the table  above,  total oil and gas sales  decreased  $19,093
      (35.3%) for the three  months ended June 30, 1998 as compared to the three
      months ended June 30, 1997. Of this  decrease,  approximately  $15,000 and
      $5,000, respectively,  were related to decreases in volumes of oil and gas
      sold and approximately  $5,000 and $5,000,  respectively,  were related to
      decreases in the average prices of oil and gas sold,  which decreases were
      partially  offset by an increase  of  approximately  $11,000  related to a
      refund of prior oil sales the 1985-2 Program paid during 1997.  Volumes of
      oil and gas sold  decreased 822 barrels and 2,107 Mcf,  respectively,  for
      the three months ended June 30, 1998 as compared to the three months ended
      June 30, 1997. The decrease in the volumes of oil sold resulted  primarily
      from positive prior period volume  adjustments  made by a purchaser on one
      well during the three months ended June 30, 1997.  The decrease in volumes
      of gas sold was primarily due to positive prior period volume  adjustments
      made by a purchaser  on one well for the three months ended June 30, 1997.
      Average  oil and gas prices  decreased  to $12.81 per barrel and $1.92 per
      Mcf,  respectively,  for the three  months ended June 30, 1998 from $19.29
      per barrel and $2.34 per Mcf,  respectively,  for the three  months  ended
      June 30, 1997.

      Oil and gas production  expenses  (including lease operating  expenses and
      production taxes) decreased $3,021 (15.8%) for the three months ended June
      30,  1998 as  compared  to the three  months  ended  June 30,  1997.  This
      decrease  resulted  primarily  from the decrease in volumes of oil and gas
      sold and the decrease in  production  taxes due to the decrease in oil and
      gas sales for the three  months  ended June 30,  1998 as  compared  to the
      three months ended June 30,  1997.  As a percentage  of oil and gas sales,
      these expenses increased to 45.9% for the three months ended June 30, 1998
      from 35.3% for the three  months  ended  June 30,  1997.  This  percentage
      increase was primarily  due to the decreases in the average  prices of oil
      and gas sold during the three months ended



                                       17
<PAGE>



      June 30, 1998 as compared to the three months ended June 30, 1997.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $714  (21.8%)  for the  three  months  ended  June 30,  1998 as
      compared to the three months ended June 30, 1997.  This decrease  resulted
      primarily  from the  decrease  in volumes  of oil and gas sold  during the
      three months  ended June 30, 1998 as compared  with the three months ended
      June 30, 1997. This decrease was partially offset by a decrease in the gas
      prices used in the  valuation  of reserves at June 30, 1998 as compared to
      March 31, 1998 and an increase in the gas prices used in the  valuation of
      reserves at June 30, 1997 as compared to March 31,  1997.  As a percentage
      of oil and gas sales,  this expense increased to 7.3% for the three months
      ended June 30, 1998 from 6.1% for the three months ended June 30, 1997.

      General and administrative expenses decreased $1,470 (11.9%) for the three
      months  ended June 30, 1998 as compared to the three months ended June 30,
      1997.  This decrease  resulted  primarily from a decrease in  professional
      fees during the three  months ended June 30, 1998 as compared to the three
      months ended June 30, 1997.  As a percentage  of oil and gas sales,  these
      expenses  increased to 31.2% for the three months ended June 30, 1998 from
      22.9% for the three months ended June 30, 1997. This  percentage  increase
      was primarily due to the decrease in oil and gas sales discussed above.

      SIX MONTHS  ENDED JUNE 30, 1998 AS  COMPARED TO THE SIX MONTHS  ENDED JUNE
      30, 1997.

                                                 Six Months Ended June 30,
                                                 -------------------------
                                                   1998             1997
                                                  -------          -------
      Oil and gas sales                           $70,927          $93,632
      Oil and gas production expenses             $35,770          $22,500
      Barrels produced                              1,419            1,697
      Mcf produced                                 26,373           32,617
      Average price/Bbl                           $ 13.38          $ 19.31
      Average price/Mcf                           $  1.97          $  2.23

      As shown in the table  above,  total oil and gas sales  decreased  $22,705
      (24.2%)  for the six months  ended June 30,  1998 as  compared  to the six
      months ended June 30, 1997.  Of this  decrease,  approximately  $5,000 and
      $14,000, respectively, were related to decreases in volumes of oil and gas
      sold and approximately  $8,000 and $7,000,  respectively,  were related to
      decreases in the average prices of oil and gas sold,  which decreases were
      partially  offset by an increase  of  approximately  $11,000  related to a
      refund of prior oil sales the 1985-2 Program paid during 1997.  Volumes of
      oil and gas sold decreased 278 barrels and



                                       18
<PAGE>



      6,244  Mcf,  respectively,  for the six  months  ended  June  30,  1998 as
      compared to the six months ended June 30, 1997. The decrease in volumes of
      gas sold resulted  primarily from positive prior period volume adjustments
      made by  purchasers  on several  wells for the six  months  ended June 30,
      1997.  Average oil and gas prices decreased to $13.38 per barrel and $1.97
      per Mcf, respectively,  for the six months ended June 30, 1998 from $19.31
      per barrel and $2.23 per Mcf, respectively,  for the six months ended June
      30, 1997.

      Oil and gas production  expenses  (including lease operating  expenses and
      production  taxes) increased $13,270 (59.0%) for the six months ended June
      30, 1998 as compared to the six months ended June 30, 1997.  This increase
      resulted  primarily  from credits  received  from the operator on one well
      during the six months ended June 30, 1997 for prior period lease operating
      expenses.  As a percentage of oil and gas sales,  these expenses increased
      to 50.4% for the six  months  ended  June 30,  1998 from 24.0% for the six
      months ended June 30, 1997. This percentage  increase was primarily due to
      the dollar increase in oil and gas production expenses and the decrease in
      the average  prices of oil and gas sold  during the six months  ended June
      30, 1998 as compared to the six months ended June 30, 1997.

      Depreciation,  depletion,  and  amortization  of oil  and  gas  properties
      decreased  $1,464  (23.1%)  for the six  months  ended  June  30,  1998 as
      compared to the six months ended June 30,  1997.  This  decrease  resulted
      primarily  from the decrease in volumes of oil and gas sold during the six
      months  ended June 30, 1998 as  compared to the six months  ended June 30,
      1997 and  decreases  in the oil and gas prices  used in the  valuation  of
      reserves at June 30, 1998 as compared to June 30, 1997. As a percentage of
      oil and gas sales, this expense remained  relatively  constant at 6.9% for
      the six months  ended June 30, 1998 and 6.8% for the six months ended June
      30, 1997.

      General and  administrative  expenses  decreased $2,792 (8.7%) for the six
      months  ended June 30, 1998 as  compared to the six months  ended June 30,
      1997. As a percentage of oil and gas sales,  these  expenses  increased to
      41.2% for the six months ended June 30, 1998 from 34.2% for the six months
      ended June 30, 1997.  This  percentage  increase was  primarily due to the
      decrease in oil and gas sales discussed above.




                                       19
<PAGE>



                          PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)    Exhibits

             27.1       Financial  Data Schedule  containing  summary  financial
                        information   extracted   from  the   1985-1   Program's
                        financial statements as of June 30, 1998 and for the six
                        months ended June 30, 1998, filed herewith.

             27.2       Financial  Data Schedule  containing  summary  financial
                        information   extracted   from  the   1985-2   Program's
                        financial statements as of June 30, 1998 and for the six
                        months ended June 30, 1998, filed herewith.

                        All other exhibits are omitted as inapplicable.

      (b) Reports on Form 8-K.

            None.





                                       20
<PAGE>



                                  SIGNATURES

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


                              DYCO OIL AND GAS PROGRAM 1985-1 LIMITED
                              PARTNERSHIP
                              DYCO OIL AND GAS PROGRAM 1985-2 LIMITED
                              PARTNERSHIP

                                    (Registrant)

                                    BY:   DYCO PETROLEUM CORPORATION

                                          General Partner


Date:  August 11, 1998        By:         /s/Dennis R. Neill
                                       -------------------------------
                                              (Signature)
                                              Dennis R. Neill
                                              President


Date:  August 11, 1998        By:         /s/Patrick M. Hall
                                       -------------------------------
                                              (Signature)
                                              Patrick M. Hall
                                              Chief Financial Officer



                                       21
<PAGE>



                              INDEX TO EXHIBITS


NUMBER      DESCRIPTION
------      -----------

27.1        Financial Data Schedule  containing  summary  financial  information
            extracted   from  the  Dyco  Oil  and  Gas  Program  1985-1  Limited
            Partnership's  financial  statements as of June 30, 1998 and for the
            six months ended June 30, 1998, filed herewith.

27.2        Financial Data Schedule  containing  summary  financial  information
            extracted   from  the  Dyco  Oil  and  Gas  Program  1985-2  Limited
            Partnership's  financial  statements as of June 30, 1998 and for the
            six months ended June 30, 1998, filed herewith.

            All other exhibits are omitted as inapplicable.



                                       22