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our general partner will be under a fiduciary duty to conduct our affairs in a manner that it reasonably believes to be in, or not inconsistent with, the best interests of our partnership and our limited partners, which requires our general partner and its affiliates, other than members of the Advisory Committee and non-manager officers of affiliates of our general partner, to take into account the interest of our partnership and limited partners with respect to actions that our general partner or its affiliates may take in its or their sole discretion;

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our general partner is required to seek approval of a majority of the members of the Advisory Committee as to our general partner’s proposed resolution of a conflict of interest involving our general partner or any of its affiliates, and our general partner may not use its “sole discretion” in determining whether a potential conflict of interest exists;

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in order to avoid unrelated business taxable income, our general partner is (i) prohibited from incurring certain types and amounts of indebtedness and (ii) prohibited from directly owning working interests or cost bearing interests and, in the event that any of our assets become working interests or cost bearing interests, required to assign such interests to Dorchester Minerals Operating LP subject to the reservation of an overriding royalty interest;

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with respect to the definition of “available cash,” cash reserves for acquisitions may only be excluded from available cash to the extent that the acquisition is subject to a binding agreement or non-binding letter of intent;

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in the event that we acquire additional properties for a combination of cash and limited partner interests, including common units, (i) the cash component of the acquisition consideration shall be no more than 5% of our aggregate cash distributions for the four most recent quarters and (ii) the amount of our limited partner interests issued in the acquisition shall not exceed 10% of the outstanding limited partner interests after giving effect to the issuance;

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we may not issue additional limited partner interests and other equity securities that have greater rights or powers than our common units without approval of the holders of a majority of our common units;

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we will hold an annual meeting of limited partners for the purpose of electing members of the Advisory Committee beginning in 2004, and we have adopted procedures relating to the conduct of limited partner meetings as described on Exhibit A to Annex A to this supplement;

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we have deleted our anti-takeover provision relating to the loss of voting rights described under “The Partnership Agreement—Change of Management Provisions” beginning on page 183 of the prospectus;

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special meetings of limited partners may be called by our general partner or by limited partners owning 20% or more of our limited partnership interests, provided that our limited partners may not call more than one special meeting every 12 months; and

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our general partner and its affiliates have the right to include their common units in a registration requested by a holder of demand registration rights, other than our general partner or its affiliates, in addition to the previously agreed to right to include their common units in offering of units by us for cash.

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the holders of registration rights shall have the right to four demand and unlimited piggyback registrations, provided that no more than two demand registrations may be offered on a continuous basis on Form S-3;

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we will pay all costs and expenses incidental to registration, other than underwriting discounts and commissions;

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the period during which the Republic ORRI owners may exercise registration rights has been extended until the later of (i) December 31, 2010, (ii) two years following the withdrawal of our general partner from our partnership or (iii) the termination of registration rights granted to our general partner and its affiliates in our partnership agreement;

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with respect to underwritten offerings, the holders of registration rights shall have the right to select the underwriter or underwriters, who shall be reasonably acceptable to us;

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the standard for “best efforts” that we must use in complying with our obligations under the registration rights agreement has been amended;

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we are required to keep a registration statement in connection with a demand registration effective for 180 days, unless all of the securities covered by the registration statement have been sold earlier;

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we may only postpone a demand registration for 90 days in certain circumstances;

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we represent and covenant that any registration statement filed pursuant to the registration rights agreement will not contain any material misstatement or omission;

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the holders of registration rights will not be liable to us for indemnification or contribution, but will represent that information provided by the holders in the registration statement will not contain a material misstatement or omission;

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the holders agree to a “market-standoff” for 180 days from our request to the holders to standoff;

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each holder may assign or subdivide its rights under the registration rights agreement to no more than four persons without our consent;

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we will enter into and deliver customary agreements and documents and cooperate with underwriter due diligence; and

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we will facilitate the delivery of securities upon a sale by a holder pursuant to the registration rights agreement.

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the obligation will apply if the purchase price of the oil and natural gas interests exceeds 3% of our market capitalization;

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beginning on January 1, 2004, a manager of Dorchester Minerals Management GP LLC that is also an affiliate of a GP Party, an officer of Dorchester Minerals Management GP LLC or any of their subsidiaries must notify us of all opportunities described in this section, regardless of the amount of the purchase price;

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the oil and gas interests covered by this obligation include working or other cost bearing interests to the extent that the interests are within the geographic boundaries of properties in which we have an interest; and

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a notifying party must provide written notice to us at least 21 days prior to the consummation of a transaction covered by the obligation.

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The General Partner shall be under a fiduciary duty and obligation to conduct the affairs of the Partnership in a manner that it reasonably believes to be in, or not inconsistent with, the best interests of the Partnership and the Limited Partners. The foregoing statement is intended to modify Section 7.9(b) of the Partnership Agreement as to the General Partner and its Affiliates other than the members of the Advisory Committee and non-manager officers of Affiliates of the General Partner.

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Notwithstanding any provision to the contrary in the Partnership Agreement (including Sections 7.5, 7.6 and 7.9), whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership or any of its Partners, on the other, the General Partner in connection with its resolution of such conflict is required to seek Special Approval of such resolution. Further, the General Partner shall not be entitled to use its “sole discretion” (as defined in the Partnership Agreement) in determining whether a potential conflict of interest exists.

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Notwithstanding any provision to the contrary in the Partnership Agreement (including Section 7.1(a)(i)), to the extent necessary to avoid unrelated business taxable income, the General Partner is prohibited from incurring indebtedness, excluding trade payables, (i) in excess of $50,000 in the aggregate at any given time or (ii) which would constitute “acquisition indebtedness” (as defined in Section 514 of the Internal Revenue Code of 1986, as amended).

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Notwithstanding any provision to the contrary in the Partnership Agreement (including Section 7.1(a)(xiii)), to the extent necessary to avoid unrelated business taxable income, the General Partner shall not cause the Partnership to acquire working interests or cost bearing interests in any oil and gas leases or similar assets. In the event that any of the assets of the Partnership become working interests or cost bearing interests, the General Partner shall cause such assets to be assigned to the Operating Subsidiary in accordance with the Royalty/NPI Agreement.

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The definition of “Available Cash” is amended to (i) delete the phrase “in the reasonable discretion of the General Partner” and (ii) provide that cash reserves for acquisitions may only be excluded from the calculation of Available Cash to the extent such acquisitions are the subject of a binding agreement or a non-binding letter of intent. Further, Section 7.9(b) is amended to delete the next to last sentence.

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Notwithstanding any provision to the contrary in the Partnership Agreement (including Sections 5.7 and 7.3(c)), in the event that the Partnership acquires properties for a combination of cash and Partnership Interests, (i) the cash component of the acquisition consideration shall be equal to or less than 5% of the aggregate cash distributions made by the Partnership for the four most recent Quarters and (ii) the amount of Partnership Interests to be issued in such acquisition, after giving effect to such issuance, shall not exceed 10% of the outstanding Limited Partnership Interests.

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Notwithstanding any provision to the contrary in the Partnership Agreement (including Section 5.6(a)), the Partnership is prohibited from issuing any Partnership Securities having greater rights or powers than the common units of the Partnership, and any options, rights, warrants, and appreciation rights relating to such Partnership Securities, unless such issuance is approved by a Unit Majority.

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Notwithstanding anything to the contrary in Article XIII of the Partnership Agreement, the Partnership shall, beginning in 2004, hold an annual meeting of limited partners of the Partnership. In connection with the annual meeting, (i) the members of the Advisory Committee will be elected by a plurality of the votes of the Outstanding Limited Partnership Interests present at the meeting in person or by proxy and entitled to vote in the election and (ii) such other business will be transacted as is properly brought before the meeting. Members of Management GP who in the original form of Limited Liability Company Agreement of Management GP, attached as Exhibit A to the Contribution Agreement (the “Management GP Agreement”), had the right to appoint persons to serve as members of the Advisory Committee (i) shall have the right to appoint persons to serve as members of the Advisory Committee until the Partnership’s 2004 annual meeting of limited partners and (ii) beginning with the 2004 annual meeting of limited partners, shall have the right to cause the General Partner to nominate persons for election as members of the Advisory Committee in accordance with the Management GP Agreement. In addition, limited partners may nominate additional persons for election as a member of the Advisory Committee in accordance with the procedures as set forth in Exhibit A attached hereto. The Partnership Agreement is amended to include the provisions contained in Exhibit A.

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The definition of “Outstanding” is amended to mean “with respect to Partnership Securities, all Partnership Securities that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination.”

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Notwithstanding anything to the contrary in newly renumbered Section 13.5, special meetings of the Limited Partners may be called by the General Partner or by Limited Partners owning 20% or more of the Outstanding Limited Partner Interests of the class or classes for which a meeting is proposed, provided that the Limited Partners shall only be entitled to call one special meeting every 12 months. Section 13.5, as newly renumbered, is amended to include the provisions contained in Exhibit A.

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Section 7.12(b) is amended to provide that the General Partner or its Affiliates have the right to “piggyback” on a registration requested by a holder, other than the General Partner and its Affiliates, of demand registration rights, provided that the party exercising the demand registration may, at any time, abandon or delay any such registration initiated by it. If the proposed offering upon which the General Partner or its Affiliates exercise their piggyback rights shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the General Partner or its Affiliates electing to exercise piggyback rights in writing that in their opinion the inclusion of all of the securities would adversely and materially affect the success of the offering, the securities that shall be included in such offering shall be allocated among the parties exercising demand registration rights and the General Partner or its Affiliates exercising piggyback registration rights in proportion to the total number of securities that the parties exercising demand registration rights propose to register in relation to the total number of securities that the General Partner or its Affiliates exercising piggyback registration rights propose to register.

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“Best Efforts” is defined as “a Person’s reasonable best efforts without the incurrence of unreasonable expense” (Section 1).

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The Partnership will bear all expenses arising from a registration of securities pursuant to the Registration Rights Agreement, other than underwriting discounts and commissions (Section 4).

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The holders of Registrable Securities are entitled to four demand and unlimited piggyback registrations, provided that not more than two demand registrations may be Form S-3 shelf registrations (Section 2).

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The holders of Registrable Securities are entitled to “piggyback” (i) on a registration by the Partnership for an offering of equity securities of the Partnership for cash (other than an offering relating solely to an employee benefit plan) and (ii) on a registration requested by the General Partner and its Affiliates pursuant to demand registration rights, provided that the party exercising the demand registration may, at any time, abandon or delay any such registration initiated by it. If the proposed offering upon which the holders of Registrable Securities exercise their piggyback rights shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the Holders electing to exercise piggyback rights in writing that in their opinion the inclusion of all of such Holder’s Partnership Securities would adversely and materially affect the success of the offering, the securities that shall be included in such offering shall be allocated among the Partnership or the parties exercising demand registration rights, as applicable, and the Holders exercising piggyback registration rights in proportion to the total number of securities that the Partnership or the parties exercising demand registration rights, as applicable, propose to register in relation to the total number of Registrable Securities that the Holders exercising piggyback registration rights propose to register.

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The Partnership will cause a demand registration to remain effective for 180 days, unless all securities covered by such registration have been sold (Section 2.1(a)(ii)).

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The Partnership may postpone a demand registration 90 days if such postponement is in the best interests of the Partnership and its partners due a pending transaction, investigation or event (Section 2).

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In the event a demand registration involves an underwritten offering, the underwriter(s) shall be selected by the Holders and reasonably acceptable to the Partnership (Section 2.1(d)).

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Registration rights will not terminate until the later of (i) December 31, 2010, (ii) 2 years following the withdrawal of the General Partner as the general partner of the Partnership or (iii) the termination of registration rights granted to the General Partner and its affiliates (Section 2.3).

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The Partnership represents and covenants that any registration statement covering sales by a Holder pursuant to the Registration Rights Agreement will not contain material misstatements or omissions.

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The obligation of the Partnership to amend or supplement a prospectus to keep a registration statement available for use may be suspended for up to 30 consecutive and 60 non-consecutive days if the amendment or supplement would require the disclosure of information that the Partnership has a bona fide business purpose for keeping confidential (Section 3(b)).

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The Holders will agree to market-standoff for a period of 180 days from the date of request to standoff (Section 5(a)).

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Holders will not be required to indemnify, or provide contribution to, the Partnership for losses arising from the registration of securities pursuant to the Registration Rights Agreement (Section 6(b) and Section 6(d)).

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Each Holder represents and covenants that any information provided by such Holder with respect to a registration pursuant to the Registration Rights Agreement will not contain material misstatements or omissions (Section 6(b)).

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Each Holder may assign or subdivide its rights pursuant to the Registration Rights Agreement directly to no more than four Persons without prior written consent of the Partnership (Section 8).

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The Partnership agrees to enter into customary underwriting agreements, cooperate in any due diligence conducted by underwriters, and deliver or cause to be delivered to the Holders and the underwriters, if any, any certificates, opinions or comfort letters customarily required.

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The Partnership agrees to facilitate the delivery of the Registrable Securities upon any sale by a Holder pursuant to the Registration Rights Agreement.

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