MUNICIPAL INVESTMENT TR FD MULTISTATE SER 317 DEF ASSET FDS, 497, 1998-11-24

MUNICIPAL INVESTMENT TR FD MULTISTATE SER 317 DEF ASSET FDS
497, 1998-11-24

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<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------

MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--317
(A UNIT INVESTMENT TRUST)
O CALIFORNIA, NEW YORK AND PENNSYLVANIA
PORTFOLIOS
O PORTFOLIOS OF INTERMEDIATE TERM AND LONG TERM
MUNICIPAL BONDS
O DESIGNED FOR FEDERALLY TAX-FREE INCOME
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS

SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated November 20, 1998.

<PAGE>
- --------------------------------------------------------------------------------

Defined Asset FundsSM
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over the last 25 years. Defined Asset
Funds has been a leader in unit investment trust research and product
innovation. Our family of Funds helps investors work toward their financial
goals with a full range of quality investments, including municipal, corporate
and government bond portfolios, as well as domestic and international equity
portfolios.

Defined Asset Funds offer a number of advantages:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.

THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF AUGUST 31, 1998, THE
EVALUATION DATE.

CONTENTS
PAGE
-----------
California Intermediate Insured Portfolio--Risk/Return
Summary 3
New York Portfolio--
Risk/Return Summary.................................. 6
Pennsylvania Portfolio--
Risk/Return Summary.................................. 9
What You Can Expect From Your Investment................ 13
Monthly Income....................................... 13
Return Figures....................................... 13
Records and Reports.................................. 13
The Risks You Face...................................... 13
Interest Rate Risk................................... 13
Call Risk............................................ 14
Reduced Diversification Risk......................... 14
Liquidity Risk....................................... 14
Concentration Risk................................... 14
State Concentration Risk............................. 15
Bond Quality Risk.................................... 17
Insurance Related Risk............................... 17
Litigation and Legislation Risks..................... 17
Selling or Exchanging Units............................. 17
Sponsors' Secondary Market........................... 17
Selling Units to the Trustee......................... 17
Exchange Option...................................... 18
How The Fund Works...................................... 18
Pricing.............................................. 18
Evaluations.......................................... 18
Income............................................... 19
Expenses............................................. 19
Portfolio Changes.................................... 19
Fund Termination..................................... 20
Certificates......................................... 20
Trust Indenture...................................... 20
Legal Opinion........................................ 21
Auditors............................................. 21
Sponsors............................................. 21
Trustee.............................................. 21
Underwriters' and Sponsors' Profits 21
Public Distribution.................................. 22
Code of Ethics....................................... 22
Year 2000 Issues..................................... 22
Taxes................................................... 22
Supplemental Information................................ 24
Financial Statements.................................... D-1

2
<PAGE>
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CALIFORNIA INTERMEDIATE INSURED PORTFOLIO--RISK/RETURN SUMMARY

1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, intermediate term municipal revenue bonds with an
estimated average life of about 10 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.

3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 intermediate term
tax-exempt municipal bonds, and some short-term bonds
reserved to pay the deferred sales fee, with an aggregate
face amount of $3,145,000. The Fund is a unit investment
trust which means that, unlike a mutual fund, the Portfolio
is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).

The Portfolio consists of municipal bonds of the following
types:

APPROXIMATE
PORTFOLIO
PERCENTAGE

/ / Airports/Ports/Highways 16%
/ / Hospitals/Healthcare 32%
/ / Lease Rental Appropriation 16%
/ / Municipal Water/Sewer Utilities 6%
/ / Special Tax 30%

4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/healthcare and
special tax bonds, adverse developments in these sectors
may affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.

ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF CALIFORNIA
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA WHICH ARE BRIEFLY
DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.

3
<PAGE>

5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.

DEFINING YOUR INCOME

WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 3.74
Annual Income per unit: $ 44.97
These figures are estimates determined on the evaluation
day; actual payments may vary.

6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.

INVESTOR FEES
2.75%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)

You will pay a deferred sales fee of $3.35 per unit
quarterly November, February, May and August through
August, 2000. Employees of some of the Sponsors and their
affiliates may pay a reduced sales fee of no less than
$5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:

YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.75%
$100,000 to $249,999 2.50%
$250,000 to $499,999 2.25%
$500,000 to $999,999 2.00%
$1,000,000 and over 1.75%

Maximum Exchange Fee 1.75%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

AMOUNT
PER UNIT
-----------
$ 0.71
Trustee's Fee
$ 0.46
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.42
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.92
Other Operating Expenses
-----------
$ 2.71
TOTAL

7. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
8. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,052.03
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day. Unit
price changes every day with changes in the prices of the
bonds in the Fund.

4
<PAGE>

9. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale[, less any remaining deferred
sales fee]. You will not pay any other fee when you sell
your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some California state and local personal income
taxes if you live in California.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales
fee on exchanges.

5
<PAGE>
- --------------------------------------------------------------------------------

NEW YORK PORTFOLIO--RISK/RETURN SUMMARY

1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.

3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds, and some short-term bonds reserved to pay
the deferred sales fee, with an aggregate face amount of
$4,535,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 28% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).

The Portfolio consists of municipal bonds of the following
types:

APPROXIMATE
PORTFOLIO
PERCENTAGE

/ / General Obligation 15%
/ / Hospitals/Healthcare 25%
/ / Miscellaneous 15%
/ / Municipal Water/Sewer Utilities 17%
/ / Refunded Bonds 2%
/ / Special Tax Issues 11%
/ / Universities/Colleges 15%

4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/healthcare
bonds, adverse developments in this sector may affect the
value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.

ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW YORK SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO NEW YORK WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.

6
<PAGE>

5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.

DEFINING YOUR INCOME

WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.33
Annual Income per unit: $ 52.04
These figures are estimates determined on the evaluation
day; actual payments may vary.

6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.

INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)

You will pay a deferred sales fee of $3.75 per unit
quarterly November, February, May and August, through
August, 2000. Employees of some of the Sponsors and their
affiliates may pay a reduced sales fee of no less than
$5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:

YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%

Maximum Exchange Fee 1.90%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

AMOUNT
PER UNIT
-----------
$ 0.71
Trustee's Fee
$ 0.46
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.29
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.65
Other Operating Expenses
-----------
$ 2.31
TOTAL

7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior New
York Portfolios, which had investment objectives, strategies
and types of bonds substantially similar to this Fund. These
prior Series differed in that they charged a higher sales
fee. These prior New York Series were offered between
January 14, 1988 and September 11, 1997 and were outstanding
on September 30, 1998. OF COURSE, PAST PERFORMANCE OF PRIOR
SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.

WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS

- -------------------------------------------------------------------

High 6.94% 5.26% 7.87% 11.62% 6.02% 8.47%
Average 4.47 4.41 7.51 7.72 5.44 8.10
Low 2.18 3.81 7.37 4.79 4.76 7.59

- -------------------------------------------------------------------

Average
Sales fee 3.17% 5.11% 5.73%

- -------------------------------------------------------------------

Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.

8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.

7
<PAGE>

9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,051.38
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale, less any remaining deferred
sales fee. You will not pay any other fee when you sell
your units.

11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New York state and local personal income
taxes if you live in New York.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective. Income from this program will
generally be subject to state and local income taxes. For
more complete information about the program, including
charges and fees, ask the Trustee for the program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.

8
<PAGE>
- --------------------------------------------------------------------------------

PENNSYLVANIA PORTFOLIO--RISK/RETURN SUMMARY

1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.

3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds, and some short-term bonds reserved to pay
the deferred sales fee, with an aggregate face amount of
$3,305,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 52% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).

The Portfolio consists of municipal bonds of the following
types:

APPROXIMATE
PORTFOLIO
PERCENTAGE

/ / Airports/Ports/Highways 8%
/ / General Obligation 29%
/ / Hospitals/Healthcare 42%
/ / Special Tax Issues 13%
/ / Universities/Colleges 8%

4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/healthcare and
general obligation bonds, adverse developments in these
sectors may affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.

ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF
PENNSYLVANIA SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND
AND IS SUBJECT TO RISKS PARTICULAR TO PENNSYLVANIA WHICH
ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.

9
<PAGE>

5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.

DEFINING YOUR INCOME

WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.27
Annual Income per unit: $ 51.25
These figures are estimates determined on the evaluation
day; actual payments may vary.

6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.

INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)

Maximum Exchange Fee 1.90%

ESTIMATED ANNUAL FUND OPERATING EXPENSES

AMOUNT
PER UNIT
-----------
$ 0.72
Trustee's Fee
$ 0.46
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.41
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.85
Other Operating Expenses
-----------
$ 2.64
TOTAL

7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Pennsylvania Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior Pennsylvania Series were
offered between March 4, 1988 and September 11, 1997 and
were outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.

WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS

- -------------------------------------------------------------------

High 6.45% 5.08% 7.33% 10.73% 6.08% 7.93%
Average 3.97 4.31 7.28 7.24 5.35 7.86
Low 2.42 3.72 7.22 3.61 4.76 7.76

- -------------------------------------------------------------------

Average
Sales fee 3.20% 5.12% 5.60%

- -------------------------------------------------------------------

Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.

10
<PAGE>

9. HOW DO I BUY UNITS?
The minimum investment is $250.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,045.37
(as of August 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale[, less any remaining deferred
sales fee]. You will not pay any other fee when you sell
your units.

11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Pennsylvania state and local personal
income taxes if you live in Pennsylvania.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective. Income from this program will
generally be subject to state and local income taxes. For
more complete information about the program, including
charges and fees, ask the Trustee for the program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.

11
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS

FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF

- --------------------------------------------------------------------------------

FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------

COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF

- --------------------------------------------------------------------------------

FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF

- --------------------------------------------------------------------------------

FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF

- --------------------------------------------------------------------------------

To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1998
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.

*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.

12
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT

MONTHLY INCOME

The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.

Changes in interest rates generally will not affect your income because the
portfolio is fixed.

Along with your income, you will receive your share of any available bond
principal.

RETURN FIGURES

We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.

Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):

Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price

Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.

Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.

These return quotations are designed to be comparative rather than predictive.

RECORDS AND REPORTS

You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.

You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.

You may inspect records of Fund transactions at the Trustee's office during
regular business hours.

THE RISKS YOU FACE

INTEREST RATE RISK

Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.

13
<PAGE>
CALL RISK

Many bonds can be prepaid or 'called' by the issuer before their stated
maturity.

For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.

Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.

An issuer might call its bonds in extraordinary cases, including if:
o it no longer needs the money for the original purpose;
o the project is condemned or sold;
o the project is destroyed and insurance proceeds are used to redeem the
bonds;
o any related credit support expires and is not replaced; or
o interest on the bonds become taxable.

If the bonds are called, your inocme will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.

REDUCED DIVERSIFICATION RISK

If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.

LIQUIDITY RISK

You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.

CONCENTRATION RISK

When a certain type of bond makes up 25% or more of the portfolio, it is said to
be 'concentrated' in that bond type, which makes the Portfolio less diversified.

Here is what you should know about each Portfolio's concentration in hospital
and healthcare bonds.
o payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
o hospitals face increasing competition resulting from hospital mergers and
affiliations;
o hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
o hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance; and
o many hospitals are aggressively buying physician practices and assuming
risk contracts to gain market share. If revenues do not increase
accordingly, this practice could reduce profits;
o Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many
cases, the providers may receive lower reimbursements and these would have
to cut expenses to maintain profitability; and
o most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.

Here is what you should know about the Pennsylvania Portfolio's concentration in
general obligation bonds.
o general obligation bonds are backed by the issuer's pledge of its full
faith, credit and taxing power;
o but the taxing power of any government issuer may be limited by provisions
of the

14
<PAGE>
state constitution or laws as well as political considerations; and
o an issuer's credit can be negatively affected by various factors, including
population decline that erodes the tax base, natural disasters, decline in
industry, limited access to capital markets or heavy reliance on state or
federal aid.

Here is what you should know about the California Portfolio's concentration in
special tax bonds.

Special tax bonds are payable from and secured by the revenues a municipality
derives from a particular tax; for example, a tax on hotel rentals, on the
purchase of food and beverages, car rentals, or liquor consumption. These bonds
are not secured by general tax revenues. Payment on these bonds may be adversely
affected by:
o a reduction in revenues resulting from a decline in the local economy or
population; or
o a decline in the consumption, use or cost of the goods and services that
are subject to taxation.

Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.

STATE CONCENTRATION RISK

CALIFORNIA RISKS
Generally
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
o As a result California experienced a period of sustained budget imbalance.
o Since that time the California economy has improved and the extreme
budgetary pressures have begun to lessen. However, the Asian economic
crisis is expected to have some negative effect on the State's economy.

State Government
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
o In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the impact, if any on the
State and Orange County is still unknown.
o California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that could create new budgetary pressure and could effect
issuers' ability to pay their debts.
o California's general obligation bonds are currently rated AA3 by Moody's
and A+ by Standard & Poor's.
Other Risks
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
o Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit the
imposition of certain taxes without voter approval.
o Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
o Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program
for health care services to welfare recipients and bonds secured by liens
on real property are two of the types of bonds that could be affected by
these provisions.

15
<PAGE>
NEW YORK RISKS
Generally
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
o the high combined state and local tax burden;
o a decline in manufacturing jobs, leading to above-average unemployment;
o sensitivity to the financial services industry; and
o dependence on federal aid.
State Government
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
New York City Government
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
o aging public facilities that need repair or replacement;
o welfare and medical costs;
o expiring labor contracts; and
o a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A-by Standard
& Poor's and A3 by Moody's.

PENNSYLVANIA RISKS
Generally
Pennsylvania and many of its municipalities (including Philadelphia) have
undergone an economic decline:
o coal, steel, railroads and other heavy industry historically associated
with the Commonwealth has given way to increased competition from foreign
producers.
o agriculture and related industries are still an important part of the
Commonwealth's economy.
o Recently, however, service sector industries (trade, medical and health
services, education and financial services) have provided new sources of
growth.
State and Local Governments
Historically, both the Commonwealth and the City of Philadelphia have
experienced serious revenue shortfalls. At the same time, rising demands for
state and local programs and services (particularly medical assistance and cash
assistance programs) have lead to increased spending.
o In recent years, both the Commonwealth and the City of Philadelphia have
tried to balance their budgets with a mix of tax increases and spending
cuts.
o Philadelphia has considered significant service cuts and privatization of
certain services which it has provided to date.
o In 1991, the Commonwealth created the Pennsylvania Inter-Governmental
Cooperation Authority ('PICA') which it authorized to issue debt to cover
Philadelphia's budget shortfalls, eliminate the City's projected deficits
and fund its capital spending. PICA issued approximately $1.76 billion of
Special Revenue Bonds on Philadelphia's behalf. Its power to issue bonds on
Philadelphia's behalf expired at the end of 1996; as of June 30, 1997,
approximately $1.1 billion in PICA Special Revenue Bonds were outstanding.
o Pennsylvania's general obligation bonds are currently rated A1 by Moody's
and AA-by Standard & Poor's. Philadelphia's general obligation bonds are
rated Baa by Moody's and BBB by Standard & Poor's. There can be no
assurance that these ratings will not be lowered.

16
<PAGE>
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.

INSURANCE RELATED RISK
Some bonds may be backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.

LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o exempting investment income from tax.

SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining installments will be deducted from your proceeds.

SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should consult
your financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.

SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a

17
<PAGE>
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you 'in
kind' by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.

EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.

HOW THE FUND WORKS

PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
o cost of initial preparation of legal documents;
o federal and state registration fees;
o initial fees and expenses of the Trustee;
o initial audit; and
o legal expenses and other out-of-pocket expenses.

EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day,

18
<PAGE>
Thanksgiving and Christmas). Bond values are based on current bid or offer
prices for the bonds or comparable bonds. In the past, the difference between
bid and offer prices of publicly offered tax-exempt bonds has ranged from 0.5%
of face amount on actively traded issues to 3.5% on inactively traded issues;
the difference has averaged between 1 and 2%.

INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.

EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. While this
fee may exceed the amount of these costs and expenses attributable to this Fund,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
Any quarterly deferred sales fees you owe are paid with interest and principal
from certain bonds. If these amounts are not enough, the rest will be paid out
of distributitons to you from the Fund's Capital and Income Accounts.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.

PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;

19
<PAGE>
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.

FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.

CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.

TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one

20
<PAGE>
Sponsor and it fails to perform its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.

LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.

AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.

SPONSORS
The Sponsors are:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051

SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.

TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.

UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.

21
<PAGE>
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.

CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.

YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund.

TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and federal
alternative minimum tax. Neither we nor our counsel have reviewed the issuance
of the bonds, related proceedings or the basis for the opinions of counsel for
the issuers. We cannot assure you that the issuer (or other users) have complied
or will comply with any requirements necessary for a bond to be tax-exempt. If
any of the bonds were determined not to be tax-exempt, you could be required to
pay income tax for current and prior years, and if the Fund were to sell the
bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:

GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.

INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. If you are an individual and sell your units after
holding them for more than one year, you may be entitled to a 20% maximum
federal tax rate on any resulting

22
<PAGE>
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.

YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition premium' and
'bond premium'. You should consult your tax adviser in this regard.

EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.

STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.

CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt for such purposes. If you are a
California taxpayer and all or part of your share of a bond is disposed of (for
example, when a bond is sold, exchanged or redeemed at maturity or you sell or
exchange your units), you will recognize gain or loss for California tax
purposes. Depending on where you live, your income from the Trust may be subject
to state and local taxation. You should consult your tax advisor in this regard.

PENNSYLVANIA TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on Pennsylvania tax matters:
The Pennsylvania Trust will not be taxed as a corporation under the current
income tax laws of Pennsylvania. Your income from the Trust may be subject to
taxation depending on where you live. If you are a Pennsylvania taxpayer your
interest income from the Trust will be tax exempt to the extent that income is
earned on bonds that are tax exempt for Pennsylvania purposes. However, gains on
the sale of bonds by the Trust or on the sale of your Units will be subject to
Pennsylvania income tax. If you are a Philadelphia resident you may be subject
to the Philadelphia school district tax on any gains realized from the sale of
bonds by the Trust or the sale of Units by you to the extent either the bonds or
Units have been held for six months or less. You should consult your tax adviser
as to the consequences to you with respect to any investment you make in the
Trust.

23
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE INSURED,
NEW YORK AND PENNSYLVANIA TRUSTS),
DEFINED ASSET FUNDS

REPORT OF INDEPENDENT ACCOUNTANTS

The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 317 (California Intermediate Insured,
New York and Pennsylvania Trusts)
Defined Asset Funds:

We have audited the accompanying statements of condition of
Municipal Investment Trust Fund, Multistate Series - 317
(California Intermediate Insured, New York and Pennsylvania
Trusts), Defined Asset Funds, including the portfolios, as
of August 31, 1998 and their related statements of operations
and of changes in their net assets for the period September 12,
1997 to August 31, 1998. These financial statements are the
responsibility of the Trustee. Our responsibility is to
express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at August 31,
1998, as shown in such portfolios, were confirmed to us by
The Chase Manhattan Bank, the Trustee. An audit also
includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Municipal Investment Trust Fund,
Multistate Series - 317 (California Intermediate Insured, New
York and Pennsylvania Trusts), Defined Asset Funds, at
August 31, 1998 and the results of their operations and
changes in their net assets for the above-stated period in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

New York, N.Y.
November 2, 1998

D - 1.

<PAGE>

MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CONDITION
As of August 31, 1998

<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 3,138,961) (Note 1)......... $ 3,258,130
Accrued interest ............................... 46,384
Accrued interest on Segregated Bonds (Note 5) .. 154
Cash - income on Segregated Bonds .............. 4,583
Cash - principal ............................... 68,843
Deferred organizational costs (Note 6) ......... 2,640
-----------
Total trust property ......................... 3,380,734

LESS LIABILITIES:
Income advance from Trustee.....................$ 37,219
Income payments payable (Segregated Bonds) ..... 2,217
Principal payments payable (Segregated Bonds) .. 40,000
Accrued Sponsors' fees ......................... 1,001
Other liabilities (Note 6) ..................... 2,640 83,077
----------- -----------

NET ASSETS, REPRESENTED BY:
3,097 units of fractional undivided
interest outstanding (Note 3)................ 3,289,493

Undistributed net investment income ............ 8,164 $ 3,297,657
----------- ===========

UNIT VALUE ($ 3,297,657 / 3,097 units )........... $ 1,064.79
===========

</TABLE>

See Notes to Financial Statements.

D - 2.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
September 12, 1997
to
August 31,
1998
----

<S> <C>
INVESTMENT INCOME:
Interest income ........................$ 149,478
Interest income on Segregated
Bonds (Note 5)........................ 4,737
Trustee's fees and expenses ............ (6,364)
Sponsors' fees ......................... (1,462)
------------
Net investment income .................. 146,389
------------

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 842
Unrealized appreciation
of investments ....................... 119,169
------------
Net realized and unrealized
gain on investments ................. 120,011
------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 266,400
============

</TABLE>

See Notes to Financial Statements.

D - 3.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
September 12, 1997
to
August 31,
1998
----

<S> <C>
OPERATIONS:
Net investment income ..................$ 146,389
Realized gain on
securities sold or redeemed .......... 842
Unrealized appreciation
of investments ....................... 119,169
------------
Net increase in net assets
resulting from operations ............ 266,400
------------

INCOME DISTRIBUTIONS TO
HOLDERS (Note 2)....................... (133,174)
------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Income ............................... (2,217)
Principal ............................ (46,519)

Redemption amounts:
Income ............................... (314)
Principal ............................ (182,528)
------------
Net share transactions ................. (231,578)
------------

NET DECREASE IN NET ASSETS ............... (98,352)

NET ASSETS AT BEGINNING OF PERIOD ........ 3,396,009
------------
NET ASSETS AT END OF PERIOD ..............$ 3,297,657
============
PER UNIT:
Income distributions during
period ...............................$ 41.31
============
Net asset value at end of
period ...............................$ 1,064.79
============
TRUST UNITS:
Redeemed during period ................. 180
Outstanding at end of period ........... 3,097
============

</TABLE>

See Notes to Financial Statements.

D - 4.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.

(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities
(see "How to Sell Units - Trustee's Redemption of Units"
in this Prospectus, Part B), except that value on September
12, 1997 was based upon offering side evaluations at
September 10, 1997, the day prior to the Date of Deposit.
Cost of securities at September 12, 1997 was also based on
such offering side evaluations.

(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.

2. DISTRIBUTIONS

A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income,
Distributions and Reinvestment - Distributions" in this Prospectus,
Part B.

3. NET CAPITAL
<TABLE>
<S> <C>

Cost of 3,097 units at Date of Deposit .....................$ 3,209,472
Transfer to capital of interest on Segregated Bonds (Note 5) 4,737
Redemptions of units - net cost of 180 units redeemed
less redemption amounts (principal)....................... 4,009
Deferred sales charge (Note 5) ............................. (48,736)
Realized gain on securities sold or redeemed ............... 842
Unrealized appreciation of investments...................... 119,169
-----------

Net capital applicable to Holders ..........................$ 3,289,493
===========

</TABLE>

4. INCOME TAXES

As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $119,169, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $3,138,961 at August 31, 1998.

D - 5.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS

5. DEFERRED SALES CHARGE $85,000 face amount of California Hlth. Fac. Fin.
Auth., Ins. Rev. Bonds, Ser. 1997 A have been segregated to fund the
deferred sales charges. The sales charges are being paid for with the
interest received and by periodic sales or maturity of these bonds. A
deferred sales charge of $3.35 per Unit is charged on a quarterly basis,
and paid to the Sponsors periodically by the Trustee on behalf of the
Holders, up to an aggregate of $40.20 per Unit over the first three years
of the life of the Fund. Should a Holder redeem Units prior to the third
anniversary of the Fund, the remaining balance of the deferred sales charge
will be charged. 6. DEFERRED ORGANIZATION COSTS Deferred organization costs
are being amortized over five years. Included in "Other liabilities" is
$2,640 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 6.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (CALIFORNIA INTERMEDIATE
INSURED TRUST),
DEFINED ASSET FUNDS

PORTFOLIO
As of August 31, 1998

Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Hlth. Fac. Fin. Auth., Ins. AAA $ 45,000 4.000 % 1999 None $ 45,040 $ 45,255
Rev. Bonds (Sutter Health), Ser. 1997 A
(FSA Ins.) (6) 40,000 4.150 2000 None 40,076 40,415

2 California Hlth. Fac. Fin. Auth., Ins. AAA 430,000 5.000 2009 05/01/07 431,858 451,749
Hosp. Rfdg. Rev. Bonds (Valley @ 102.000
Presbyterian Hosp.), Ser. 1997 (MBIA
Ins.)

3 San Bernardino Cnty., CA, Cert. of AAA 500,000 4.800 2007 None 505,865 520,215
Part. (Med. Ctr. Fin. Proj.), Ser. 1997
(MBIA Ins.)

4 San Mateo Cnty., CA, Trans. Auth., AAA 500,000 4.600 2008 None 495,790 514,625
Limited Tax Bonds, Ser. 1997 A (MBIA
Ins.)

5 City of Folsom, CA, Cmnty. Fac. Dist. AAA 500,000 4.900 2009 12/01/07 500,000 523,410
No. 2, 1997 Spec. Tax Rfdg. Bonds @ 102.000
(Natoma Station) (Connie Lee Ins.)

6 City of Santa Clarita, Los Angeles AAA 500,000 4.800 2011 10/01/05 492,450 508,825
Cnty., CA, Rfdg. Cert. of Part. (MBIA @ 102.000
Ins.)

7 City of Santa Rosa, Sonoma Cnty., CA, AAA 185,000 4.800 2009 09/01/06 185,000 191,601
Wastewater Rev. Bonds, Rfdg. and @ 101.500
Subregional Wastewater Proj., Ser. 1996
A (Financial Guaranty Ins.)

8 Community Fac. Dist. No. 1, North City AAA 445,000 4.900 2010 09/01/07 442,882 462,035
West Sch. Fac. Fin. Auth., Spec. Tax @ 102.000
Bonds, Ser. 1997 C (AMBAC Ins.)

----------- --------- ---------
TOTAL $ 3,145,000 $ 3,138,961 $ 3,258,130
=========== ========= =========

See Notes to Portfolios on Page D - 22.

</TABLE>

D - 7.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CONDITION
As of August 31, 1998

<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 4,474,400) (Note 1)......... $ 4,683,902
Accrued interest ............................... 42,011
Accrued interest on Segregated Bonds (Note 5) .. 3,132
Proceeds receivable from sale of securities .... 105,772
Cash - income .................................. 14,191
Cash - income on Segregated Bonds .............. 5,607
Cash - principal ............................... 42,954
Deferred organizational costs (Note 6) ......... 3,659
-----------
Total trust property ......................... 4,901,228

LESS LIABILITIES:
Income advance from Trustee.....................$ 41,176
Income payments payable (Segregated Bonds) ..... 4,324
Principal payments payable (Segregated Bonds) .. 66,416
Accrued Sponsors' fees ......................... 1,394
Redemptions payable ............................ 38,034
Other liabilities (Note 6) ..................... 3,659 155,003
----------- -----------

NET ASSETS, REPRESENTED BY:
4,455 units of fractional undivided
interest outstanding (Note 3)................ 4,732,705

Undistributed net investment income ............ 13,520 $ 4,746,225
----------- ===========

UNIT VALUE ($ 4,746,225 / 4,455 units )........... $ 1,065.37
===========

</TABLE>

See Notes to Financial Statements.

D - 8.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

STATEMENT OF OPERATIONS
September 12, 1997
to
August 31,
1998
----

INVESTMENT INCOME:
Interest income ........................$ 238,969
Interest income on Segregated
Bonds (Note 5) ....................... 8,739
Trustee's fees and expenses ............ (8,051)
Sponsors' fees ......................... (2,034)
------------
Net investment income .................. 237,623
------------

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 1,511
Unrealized appreciation
of investments ....................... 209,502
------------
Net realized and unrealized
gain on investments ................. 211,013
------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 448,636
============

See Notes to Financial Statements.

D - 9.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CHANGES IN NET ASSETS
September 12, 1997
to
August 31,
1998
----

OPERATIONS:
Net investment income ..................$ 237,623
Realized gain on
securities sold or redeemed .......... 1,511
Unrealized appreciation
of investments ....................... 209,502
------------
Net increase in net assets
resulting from operations ............ 448,636
------------

INCOME DISTRIBUTIONS TO
HOLDERS (Note 2)....................... (215,078)
------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Income ............................... (4,324)
Principal ............................ (66,416)

Redemption amounts:
Income ............................... (286)
Principal ............................ (88,686)
------------
Net share transactions ................. (159,712)
------------

NET INCREASE IN NET ASSETS ............... 73,846

NET ASSETS AT BEGINNING OF PERIOD ........ 4,672,379
------------
NET ASSETS AT END OF PERIOD ..............$ 4,746,225
============
PER UNIT:
Income distributions during
period ...............................$ 47.64
============
Net asset value at end of
period ...............................$ 1,065.37
============
TRUST UNITS:
Redeemed during period ................. 87
Outstanding at end of period ........... 4,455
============

See Notes to Financial Statements.

D - 10.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.

2. DISTRIBUTIONS

3. NET CAPITAL

Cost of 4,455 units at Date of Deposit .....................$ 4,582,882
Transfer of capital to interest on Segregated Bonds (Note 5) 8,739
Redemptions of units - net cost of 87 units redeemed
less redemption amounts (principal)....................... 811
Deferred sales charge (Note 5) ............................. (70,740)
Realized gain on securities sold or redeemed ............... 1,511
Net unrealized appreciation of investments.................. 209,502
-----------

Net capital applicable to Holders ..........................$ 4,732,705
===========

4. INCOME TAXES

As of August 31, 1998, net unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $209,502, of which
$423 related to depreciated securities and $209,925 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $4,474,400 at August 31, 1998.

D - 11.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS

5. DEFERRED SALES CHARGE $65,000 face amount of the Town of Brookhaven,
Suffolk Cnty., NY, Pub. Imp. Serial Bonds, Ser. 1997, $60,000 face amount
of Clinton Cnty., NY, Northeastern Clinton Central Sch. Dist. at Champlain,
Sch. Dist. Serial Bonds, Ser. 1997 have been segregated to fund the
deferred sales charges. The sales charges are being paid for with the
interest received and by periodic sales or maturity of these bonds. A
deferred sales charge of $3.75 per Unit is charged on a quarterly basis,
and paid to the Sponsors periodically by the Trustee on behalf of the
Holders, up to an aggregate of $45 per Unit over the first three years of
the life of the Fund. Should a Holder redeem Units prior to the third
anniversary of the Fund, the remaining balance of the deferred sales charge
will be charged. 6. DEFERRED ORGANIZATION COSTS Deferred organization costs
are being amortized over five years. Included in "Other liabilities" is
$3,659 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.

D - 12.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

PORTFOLIO
As of August 31, 1998

Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Dormitory Auth. of the State of New BBB+ $ 660,000 5.500 % 2025 07/01/06 $ 650,687 $ 680,170
York, Dept. of Hlth., Rev. Bonds, Ser. @ 102.000
1996

2 Dormitory Auth. of the State of New A- 35,000 5.500 2026 05/15/06 34,500 36,140
York, State Univ. Educl. Facs., Rev. @ 102.000
Bonds, Ser. 1996

3 Dormitory Auth. of the State of New A- 650,000 5.400 2023 05/15/04 632,346 665,152
York, State Univ. Educl. Facs. Rev. @ 102.000
Bonds, Ser. 1993 C

4 Town of Brookhaven, Suffolk Cnty., NY, Aaa(m) 65,000 4.600 2000 None 65,887 66,131
Pub. Imp. Serial Bonds 1997 (MBIA Ins.)
(5) (6)

5 Clinton Cnty., NY, Northeastern Clinton Aaa(m) 60,000 4.800 1999 None 61,187 60,764
Central Sch. Dist. at Champlain, Sch.
Dist. Serial Bonds, Series 1997
(Financial Guaranty Ins.) (5) (6)

6 Dormitory Auth. of the State of New A- 490,000 5.625 2021 02/15/07 493,053 511,849
York, Mental Hlth. Svcs. Facs. Imp. @ 102.000
Rev. Bonds, Ser. 1997 B

7 New York City, NY, Educ. Construction A- 100,000 6.000 2006(7) 02/15/06 103,122 113,068
Fund Rev. Bonds, Ser. 1989 A (MBIA @ 101.500
Ins.) (5)

8 New York City, NY, Educ. Construction A- 565,000 6.000 2024 02/15/06 582,639 610,053
Fund Rev. Bonds, Ser. 1989 A (MBIA @ 101.500
Ins.) (5)

9 New York City, NY, Mun. Wtr. Fin. A- 750,000 5.125 2021 06/15/07 712,883 742,478
Auth., Wtr. and Swr. Sys. Rev. Bonds, @ 101.000
Fiscal Ser. 1998 A

</TABLE>

D - 13.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (NEW YORK TRUST),
DEFINED ASSET FUNDS

PORTFOLIO
As of August 31, 1998

Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
10 New York Local Govt. Asst. Corp., Pub. AAA $ 500,000 5.000 % 2023 04/01/04 $ 469,140 $ 491,640
Benefit Corp. of the State of New York, @ 100.000
Ser. 1993 D (AMBAC Ins.) (5)

11 North Babylon Volunteer Fire Co., Inc., AA 660,000 5.750 2022 08/01/07 668,956 706,457
Volunteer Fire Dept. Rev. Bonds, Ser. @ 103.000
1997 (Asset Guaranty Ins.) (5)

----------- --------- ---------
TOTAL $ 4,535,000 $ 4,474,400 $ 4,683,902
=========== ========= =========

See Notes to Portfolios on Page D - 22.

</TABLE>

D - 14.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CONDITION
As of August 31, 1998

<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 3,252,618) (Note 1)......... $ 3,380,726
Accrued interest ............................... 51,783
Accrued interest on Segregated Bonds (Note 5) .. 743
Income payments receivable (Segregated Bonds) .. 64
Cash - income on Segregated Bonds .............. 4,597
Cash - principal ............................... 68,973
Deferred organizational costs (Note 6) ......... 2,642
-----------
Total trust property ......................... 3,509,528

LESS LIABILITIES:
Income advance from Trustee.....................$ 41,037
Deferred sales charge (Note 5) ................. 12,128
Principal payments payable (Segregated Bonds) .. 38,453
Accrued Sponsors' fees ......................... 1,009
Other liabilities (Note 6) ..................... 2,642 95,269
----------- -----------

NET ASSETS, REPRESENTED BY:
3,234 units of fractional undivided
interest outstanding (Note 3)................ 3,404,522

Undistributed net investment income ............ 9,737 $ 3,414,259
----------- ===========

UNIT VALUE ($ 3,414,259 / 3,234 units )........... $ 1,055.74
===========

</TABLE>

See Notes to Financial Statements.

D - 15.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
September 12, 1997
to
August 31,
1998
----

<S> <C>
INVESTMENT INCOME:
Interest income ........................$ 171,428
Interest income on Segregated
Bonds (Note 5) ....................... 5,404
Trustee's fees and expenses ............ (6,872)
Sponsors' fees ......................... (1,472)
------------
Net investment income .................. 168,488
------------

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 312
Unrealized appreciation
of investments ....................... 128,108
------------
Net realized and unrealized
gain on investments ................. 128,420
------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 296,908
============

</TABLE>

See Notes to Financial Statements.

D - 16.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
September 12, 1997
to
August 31,
1998
----

<S> <C>
OPERATIONS:
Net investment income ..................$ 168,488
Realized gain on
securities sold or redeemed .......... 312
Unrealized appreciation
of investments ....................... 128,108
------------
Net increase in net assets
resulting from operations ............ 296,908
------------

INCOME DISTRIBUTIONS TO
HOLDERS (Note 2)....................... (153,209)
------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Principal ............................ (50,580)

Redemption amounts:
Income ............................... (138)
Principal ............................ (46,340)
------------
Net share transactions ................. (97,058)
------------

NET INCREASE IN NET ASSETS ............... 46,641

NET ASSETS AT BEGINNING OF PERIOD ........ 3,367,618
------------
NET ASSETS AT END OF PERIOD ..............$ 3,414,259
============
PER UNIT:
Income distributions during
period ...............................$ 46.89
============
Net asset value at end of
period ...............................$ 1,055.74
============
TRUST UNITS:
Redeemed during period ................. 46
Outstanding at end of period ........... 3,234
============

</TABLE>

See Notes to Financial Statements.

D - 17.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.

2. DISTRIBUTIONS

Cost of 3,234 units at Date of Deposit .....................$ 3,320,389
Transfer of capital to interest on Segregated Bonds (Note 5) 5,404
Redemptions of units - net cost of 46 units redeemed
less redemption amounts (principal)....................... 889
Deferred sales charge (Note 5) ............................. (50,580)
Realized gain on securities sold or redeemed ............... 312
Unrealized appreciation of investments...................... 128,108
-----------

Net capital applicable to Holders ..........................$ 3,404,522
===========

</TABLE>

4. INCOME TAXES

As of August 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $128,108, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $3,252,618 at August 31, 1998.

D - 18.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE $90,000 face amount of Holidaysburg Area Sch. Dist.,
Blair Cnty., PA, G.O. Bonds, Rfdg. Ser. 1997 AA and $15,000 Montgomery
Cnty., PA, Higher Educ. and Hlth. Auth., Hlth. Care Rev. Bonds, Ser. 1997
A, have been segregated to fund the deferred sales charges. The sales
charges are being paid for with the interest received and by periodic sales
or maturity of these bonds. A deferred sales charge of $3.75 per Unit is
charged on a quarterly basis, and paid to the Sponsors periodically by the
Trustee on behalf of the Holders, up to an aggregate of $45 per Unit over
the first three years of the life of the Fund. Should a Holder redeem Units
prior to the third anniversary of the Fund, the remaining balance of the
deferred sales charge will be charged. 6. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years. Included
in "Other liabilities" is $2,642 payable to the Trustee for reimbursement
of costs related to the organization of the Trust.

D - 19.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

PORTFOLIO
As of August 31, 1998

Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Pennsylvania Intergovernmental Coop. AAA $ 450,000 5.500 % 2020 06/15/06 $ 450,000 $ 467,568
Auth., Spec. Tax Rev. Rfdg. Bonds (City @ 100.000
of Philadelphia Funding Prog.), Ser.
1996 (Financial Guaranty Ins.) (5)

2 Allegheny Cnty., PA, Hosp. Dev. Auth., A3(m) 500,000 5.750 2027 05/15/07 502,060 520,230
Hosp. Rev. Bonds (St. Francis Med. Ctr. @ 102.000
Proj.), Ser. 1997

3 Bedford Area Sch. Dist., Bedford Cnty., AAA 465,000 5.300 2024 04/15/04 455,235 471,738
PA, G.O. Bonds, Rfdg. Ser. 1997 @ 100.000
(Financial Guaranty Ins.) (5)

4 Hollidaysburg Area Sch. Dist., Blair AAA 45,000 4.100 1999 None 45,077 45,232
Cnty., PA, G.O. Bonds, Rfdg. Ser. 1997
AA (MBIA Ins.) (5) (6) 45,000 4.200 2000 None 45,058 45,432

15,000 4.250 2000 None 15,000 15,155

5 Montgomery Cnty., PA, Indl. Dev. Auth., A- 385,000 5.750 2017 11/15/06 388,122 401,262
Retirement Cmnty. Rev. Bonds (Adult @ 102.000
Cmnty. Total Svc., Inc. Obligated
Grp.), Ser. 1996 B

6 The Hospitals and Higher Educ. Facs. A- 500,000 5.500 2027 11/15/07 485,625 506,580
Auth. of Philadelphia, PA, Hosp. Rev. @ 101.000
Bonds (Temple Univ. Hosp.), Ser. 1997

7 The School Dist. of Philadelphia, PA, AAA 400,000 5.375 2022 04/01/07 395,948 410,908
G.O. Bonds, Ser. 1997 B (AMBAC Ins.) @ 100.000
(5)

</TABLE>

D - 20.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

PORTFOLIO
As of August 31, 1998

Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
8 University of Pittsburgh - Of the AAA $ 250,000 5.000 % 2021 06/01/07 $ 236,690 $ 246,638
Commonwealth Sys. of Higher Educ., PA, @ 102.000
Univ. Rfdg. Bonds, Ser. 1997 B (MBIA
Ins.) (5)

9 Puerto Rico Hwy. and Trans. Auth., Hwy. A 250,000 5.000 2036 None 233,803 249,983
Rev. Bonds, Ser. Y

----------- --------- ---------
TOTAL $ 3,305,000 $ 3,252,618 $ 3,380,726
=========== ========= =========

See Notes to Portfolios on Page D - 22.

</TABLE>

D - 21.

<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 317 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS

NOTES TO PORTFOLIOS
As of August 31, 1998

(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc if followed by "(m)", or by Fitch Investors
Service, Inc. if followed by "(f)"; "NR" indicates that this bond is not
currently rated by any of the above mentioned rating services. These
ratings have been furnished by the Evaluator but not confirmed with the
rating agencies. See "Description of Ratings" in Part B of this
Prospectus.

(2) See Notes to Financial Statements.

(3) Optional redemption provisions, which may be exercised in whole or in part,
are initially at prices of par plus a premium, then subsequently at prices
declining to par. Certain securities may provide for redemption at par
prior or in addition to any optional or mandatory redemption dates or
maturity, for example, through the operation of a maintenance and
replacement fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and insurance
proceeds are used to redeem the securities. Many of the securities are also
subject to mandatory sinking fund redemption commencing on dates which may
be prior to the date on which securities may be optionally redeemed.
Sinking fund redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain optional
provisions permitting the issuer to increase the principal amount of
securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed securities
have an offering side evaluation which represents a premium over par. To
the extent that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by the Fund.
The estimated current return may be affected by redemptions. The tax effect
on Holders of redemptions and related distributions is described under
"Taxes" in this Prospectus, Part B. (4) All securities are insured, either
on an individual basis or by portfolio insurance, by a municipal bond
insurance company which has been assigned "AAA" claims paying ability by
Standard & Poor's. Accordingly, Standard & Poor's has assigned a "AAA"
rating to the securities. Securities covered by portfolio insurance are
rated "AAA" only as long as they remain in the Trust. See "Risk Factors -
Bonds Backed by Letters of Credit or Insurance" in this Prospectus, Part B.

(5) Insured by the indicated municipal bond insurance company. See "Risk
Factors - Bonds Backed by Letters of Credit or Insurance" in this
Prospectus, Part B.

(6) These bonds have been segregated to fund the deferred sales charges.

(7) Bonds with an aggregate face amount of $ 100,000 of the New York Trust
have been pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.

D - 22.
<PAGE>
Defined
Asset FundsSM

HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--317
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
333-33869) and
o Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.

11325--11/98