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                                                                     Exhibit 5.1

                       [LETTERHEAD OF BARRETT & McNAGNY]



January 10, 1997


Steel Dynamics, Inc.
4500 County Road 59
Butler, IN 46721


Gentlemen:

In connection with the filing by Steel Dynamics, Inc., an Indiana corporation
(the "Company"), with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933, as amended of a Registration
Statement on Form S-8 (the "Registration Statement"), with respect to a maximum
of 1,102,765 shares of Common Stock, without par value (the "Shares"), to be
issued under the Steel Dynamics, Inc. 1994 Incentive Stock Option Plan (the
"Plan"), we have examined the Amended and Restated Articles of Incorporation of
the Company, as currently in effect, the Amended and Restated Bylaws of the
Company, as currently in effect, the Registration Statement on Form S-8, the
records relating to the organization of the Company and such other documents as
we have deemed necessary or appropriate to examine as a basis for the opinions
hereinafter expressed, and copies of the Plan, as well as the records of the
proceedings of the Board of Directors and shareholders of the Company relating
to the adoption and approval thereof.

Based upon that examination, we are of the opinion that:

        1. The Company is incorporated and validly existing under the laws of
the State of Indiana.

        2. The Shares have been duly authorized and, when issued and delivered
pursuant to the Plan and in the manner contemplated by the Registration
Statement, will be validly issued, fully paid, and non-assessable.

We hereby consent to the filing of this Opinion as Exhibit 5.1 to the
Registration Statement on Form S-8 in respect of the Plan and to the use of our
name therein.

Very truly yours,

BARRETT & McNAGNY

/s/

Robert S. Walters

RSW:klv:90777

