<PAGE> PAGE 1
000 B000000 09/30/1999
000 C000000 0001061390
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 U
001 A000000 THE AVALON FUND OF ANN ARBOR, INC.
001 B000000 811-08773
001 C000000 8772282566
002 A000000 1350 HIGHLAND DRIVE, SUITE A
002 B000000 ANN ARBOR
002 C000000 MI
002 D010000 48108
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 THE AVALON CAPITAL APPRECIATION FUND
007 C030100 N
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007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
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007 C011000 10
020 A000001 DONALDSON LUFKIN & JENRETTE
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022 A000001 FIRST UNION BANK
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022 A000002 DONALDSON LUFKIN JENRETTE
<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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080 A00AA00 NATIONAL UNION FIRE INSURANCE COMPANY OF PITT
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SIGNATURE JOHN GAKENHEIMER
TITLE VICE PRESIDENT
Board of Trustees
The Avalon Capital Appreciation Fund
In planning and performing our audit of the financial statements of The Avalon
Capital Appreciation Fund for the year ended September 30, 1999, we considered
its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of The Avalon Capital Appreciation Fund is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 1999.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
October 20, 1999
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<S> <C>
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<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
<INVESTMENTS-AT-COST> 931,204
<INVESTMENTS-AT-VALUE> 1,061,037
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<NET-INVESTMENT-INCOME> (7,917)
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