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

                                    FORM 8-K

                Current Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                          Date of Report: May 27, 1999
                        (Date of Earliest Event Reported)

                        HECTOR COMMUNICATIONS CORPORATION
             (Exact name of registrant as specified in its charter)

                          Minnesota 0-18587 41-1666660
         (State or other jurisdiction (Commission File (Federal Employer
                  of Incorporation) Number) Identification No.)

                              211 South Main Street
                                Hector, MN 55342
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (320) 848-6611

                                 Total Pages (2)

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                        HECTOR COMMUNICATIONS CORPORATION
                                    FORM 8-K

Items 1 - 4  Not Applicable.
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Item 5.  Other Events.

On May 24, 1999, the stockholders of the St. Paul Bank for Cooperatives ("SPBC")
approved a merger  agreement  between SPBC and CoBank,  ACB ("CoBank").  Pending
final approval of the merger by the Farm Credit Administration,  the merger will
take place  effective  July 1, 1999.  At that  time,  shareholders  of SPBC will
become shareholders of CoBank and SPBC will cease to exist.

As part of the merger process,  SPBC and CoBank have been reviewing each other's
loan portfolios. Subsequent to the approval of the merger, the parties concluded
that  accruals for losses on SPBC's loan  portfolio  needed to be  substantially
increased.  On May 27, 1999, the Company was notified that the parties  estimate
that the additional loss accruals will reduce the value of SPBC stock by between
11% and 19% of its December 31, 1998 valuation.

Hector Communications  Corporation ("HCC") and its 68% owned subsidiary Alliance
Telecommunications  Corporation  ("Alliance"),  as  a  result  of  various  loan
agreements, are shareholders in SPBC. At December 31, 1998, their investments in
SPBC stock totaled $3,258,000.  HCC management estimates potential losses due to
impairment  of the  value  of SPBC  stock  could be as much as  $619,000.  After
adjusting for the minority interest, this would amount to $.11 per diluted share
based on shares of HCC  outstanding  at March 31, 1999. HCC expects to report an
adjustment of the value of its SPBC stock in its June, 1999 earnings report.

The  Company's  investment  in SPBC  is a  nonearning  asset  in that it pays no
dividend and is not  associated  with any  patronage  dividends  the Company may
receive on interest payments made to the bank. HCC's management does not believe
the valuation  adjustment to its SPBC stock will have any material effect on the
Company's future operations.

Items 6 - 8  Not Applicable.
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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 hereunto duly authorized.

                                          HECTOR COMMUNICATIONS CORPORATION

                                          By  /s/Charles A. Braun
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                                          Charles A. Braun
                                          Chief Financial Officer
June 4, 1999