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SIGNATURE DAVID W. TICE
TITLE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001002903
<NAME> PRUDENT BEAR FUNDS, INC.
<S> <C>
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</TABLE>
To the Board of Directors of Prudent Bear Fund
In planning and performing our audit of the financial statements
of Prudent Bear Fund (the "Fund") for the year ended September
30, 1997, we considered the Fund's internal control structure,
including procedures for safeguarding securities, in order to determine
our auditing procedures for the purposes of expressing our opinion on
the financial statements and to comply with the requirements of Form
N-SAR, and not to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an
internal control structure are to provide management with reasonable, but
not absolute, assurance that assets are appropriately safeguarded against
loss from unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded properly to
permit preparation of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be
material weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in which
the design or operation of the specific internal control structure elements
does not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving the internal control
structure, including procedures for safeguarding securities, that we consider
to be material weaknesses as defined above as of September 30, 1997.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
/s/ Price Waterhouse
November 7, 1997
