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<PAGE> PAGE 2
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SIGNATURE DAVID W. TICE
TITLE PRESIDENT
To the Shareholders and 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,
1998, we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected
benefits and related costs of control activities. Generally, control
activities that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting principles.
Those control activities include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may
occur and not be detected. Also, projection of any evaluation of
internal control 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 internal control would not necessarily disclose all
matters in internal control 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 any specific internal control components does not
reduce to a relatively low level the risk that errors or fraud 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 internal control, including
control activities for safeguarding securities, that we consider to be
material weaknesses as defined above as of September 30, 1998.
This report is intended solely for the information and use of
management and the Board of Directors of Prudent Bear Fund and the
Securities and Exchange Commission.
PRICEWATERHOUSECOOPERS LLP
November 19, 1998
[ARTICLE] 6
[CIK] 0001002903
[NAME] PRUDENT BEAR FUNDS, INC.
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] SEP-30-1998
[PERIOD-START] OCT-01-1997
[PERIOD-END] SEP-30-1998
[INVESTMENTS-AT-COST] 146,241,948
[INVESTMENTS-AT-VALUE] 139,615,913
[RECEIVABLES] 179,390,638
[ASSETS-OTHER] 545,842
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 319,552,393
[PAYABLE-FOR-SECURITIES] 11,155,349
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 134,705,681
[TOTAL-LIABILITIES] 145,861,030
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 178,902,175
[SHARES-COMMON-STOCK] 23,662,896
[SHARES-COMMON-PRIOR] 3,634,136
[ACCUMULATED-NII-CURRENT] 2,492,208
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (20,488,012)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 12,784,992
[NET-ASSETS] 173,691,363
[DIVIDEND-INCOME] 27,430
[INTEREST-INCOME] 4,628,421
[OTHER-INCOME] 0
[EXPENSES-NET] (1,639,145)
[NET-INVESTMENT-INCOME] 3,016,706
[REALIZED-GAINS-CURRENT] (11,636,875)
[APPREC-INCREASE-CURRENT] 11,302,865
[NET-CHANGE-FROM-OPS] 2,682,696
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1,895,943)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 64,975,126
[NUMBER-OF-SHARES-REDEEMED] (45,136,010)
[SHARES-REINVESTED] 189,644
[NET-CHANGE-IN-ASSETS] 147,191,654
[ACCUMULATED-NII-PRIOR] 1,367,233
[ACCUMULATED-GAINS-PRIOR] (8,851,136)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 868,169
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,639,145
[AVERAGE-NET-ASSETS] 69,453,537
[PER-SHARE-NAV-BEGIN] 7.29
[PER-SHARE-NII] 0.29
[PER-SHARE-GAIN-APPREC] (0.01)
[PER-SHARE-DIVIDEND] (0.23)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 7.34
[EXPENSE-RATIO] 2.08
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
