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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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SIGNATURE SARDAR D KHAN
TITLE PRESIDENT
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM NSAR ITEM 77K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: December 9, 1998
KHAN FUNDS
DELAWARE 811-7829 76-0521013
714 FM 1960 WEST #201
HOUSTON, TX 77090
(281) 444-7657
ITEM 77K. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
KPMG Peat Marwick LLP was previously the principal
accountants for Khan Funds. On December 9, 1998, that
firm declined to stand for reelection and Tait, Weller
and Baker was to be considered as principal accountants.
The decision to change accountants was be resolved by
the board of directors in the meeting on December 18 of
1998.
In connection with the audit of the fiscal year ended
December 31, 1997, and the subsequent interim period
through December 9, 1998, there were no disagreements
with KPMG Peat Marwick LLP on any matter of accounting
principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements if
not resolved to their satisfaction would have caused
them to make reference in connection with their opinion
to the subject matter of the disagreement.
The audit report of KPMG Peat Marwick LLP on the
financial statements of Khan Funds as of December 31,
1997 and for the period from July 9,1997 (date
operations commenced) through December 31, 1997, did not
contain any adverse opinion or disclaimer of opinion,
nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles. A letter from
KPMG Peat Marwick is attached as Exhibit A.
EXHIBITS
LETTER RE: CHANGE IN CERTIFYING ACCOUNTANT
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED
THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HERETO DULY AUTHORIZED.
KHAN FUNDS
December 9, 1998 /S/ S.D. KHAN
____________________________________
S.D. KHAN
CHAIRMAN AND PRESIDENT
Exhibit A:
Securities and Exchange Commission
Washington, D.C. 20549 December 10, 1998
Ladies and Gentlemen:
We were previously principal accountants for Khan Funds
and, under the date of January 24, 1998, we reported on
the financial statements of Khan Growth Fund as of
December 31, 1997 and for the period from July 9, 1997
(date operations commenced) through December 31, 1997.
On December 9, 1998 we declined to stand for reelection.
We have read Khan Funds' statements included under Item
77K of its form NSAR dated December 9, 1998, and we
agree with such statements, except that we are not in a
position to agree or disagree with Khan Funds' statement
that Tait, Weller and Baker will be considered as
principal accountants or that the decision to change
accountants will be considered by the board of directors
in the meeting scheduled on December 18, 1998.
Very truly yours,
KPMG Peat Marwick
