is this fold even a little okay?

[BT2]

PokerStars No-Limit Hold'em, $0.25 BB (8 handed) Hand History Converter Tool (http://poker-tools.flopturnriver.com/Hand-Converter.php) from FlopTurnRiver.com (http://www.flopturnriver.com) (Format: 2+2 Forums)

UTG+1 ($24.90)
Hero ($32)
MP2 ($32.85)
CO ($22.75)
Button ($31.80)
SB ($15.80)
BB ($22.70)
UTG ($41.20)

Preflop: Hero is MP1 with A/images/graemlins/club.gif, A/images/graemlins/diamond.gif.
<font color="#666666">2 folds</font>, <font color="#CC3333">Hero raises to $1</font>, <font color="#666666">2 folds</font>, Button calls $1, <font color="#666666">2 folds</font>.

Flop: ($2.35) 7/images/graemlins/club.gif, 8/images/graemlins/heart.gif, 6/images/graemlins/heart.gif <font color="#0000FF">(2 players)</font>
<font color="#CC3333">Hero bets $1.25</font>, <font color="#CC3333">Button raises to $3.5</font>, Hero folds.

Final Pot: $7.10

[jdefoe]

I bet $2 on flop, and either 3 bet, or call the flop, and lead the turn for 1/2-2/3 of pot and fold if he raises