Recognition of relationship between the present day stress state and fractures is very important in fractured reservoirs. Fractures that are parallel or oblique to maximum horizontal stress have more tendencies to tensile deformation and tensile deformed fractures will be more permeable. The Dalan formation is one of the main gas reservoirs of Iran witch most of the production from this formation is related to the fractures. In this study fractures properties and maximum horizontal stress orientation was determined by using FMI image log. 20 borehole breakouts and 9 drilling induced fractures were used for stress direction determination. The total twenty recognized breakouts in the borehole are showing maximum horizontal stress toward N18.5°E. The quality ranking of the well for maximum horizontal stress determination is A by using breakouts and B by using induced fractures. For validation of calculated maximum horizontal stress from FMI, maximum horizontal stress was calculated by DSI too and two calculated maximum horizontal stress by FMI and DSI was compatible. Two sets of fractures were recognized in Dalan formation, set1 and set2, which are striking towards SE-NW and E-W respectively. Set1 and set2 fractures are parallel and oblique to the anticline axis respectively, therefore set1 fractures may be tensional fractures. Set1 fractures are perpendicular to maximum horizontal stress then this set may be closed in future and set2 fractures is oblique to maximum horizontal stress then shear deformation may causes of higher production for this set.