An apparatus for drying particulate material includes an elongate housing having a chamber therein. A drum is positioned in the housing and has opposite ends thereof extending through open ends of the housing. The drum is mounted for rotation about its longitudinal axis. The exterior surface of the drum and the interior surface of the housing are spaced apart and form an annular space adapted for flow of heating medium therealong. An inlet opens into the annular space and is directed for introducing heating medium in a generally tangential direction relative to the annular space such that the heating medium flows in a generally vortex manner along the length of the annular space to the outlet. A tube is positioned in the drum and extends along a major portion of the length of the drum. The tube is in flow communication with the annular space for receiving heating medium therefrom. The heating medium flows along the tube for heating the particulate material in the drum and the heating medium in the tube is discharged into the interior of the drum for direct contact with the particulate material and further heating thereof. The material to be dried is introduced into one end of the drum and discharged from the other end of the drum after drying.