VIKING MUTUAL FUNDS, N-1A/A, 1999-07-19

VIKING MUTUAL FUNDS
N-1A/A, 1999-07-19

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As filed with the Securities and Exchange Commission on July 16, 1999
1933 Act Registration No. 333-77993
1940 Act Registration No. 811-09277

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
-----
Pre-Effective Amendment No. [ X ] [ 1 ]
----- -----
Post-Effective Amendment No. [ ] [ ]
and/or ----- -----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. [ X ] [ 1 ]
----- -----
(Check appropriate box or boxes)

VIKING MUTUAL FUNDS
-------------------
(Exact Name of the Registrant as Specified in Charter)
1400 14th Avenue SW
Minot, North Dakota 58701
(Address of Principal Executive Offices)

Registrant's Telephone Number, including area code: (701) 852-1264

Shannon D. Radke, President
Viking Mutual Funds
1400 14th Avenue SW
Minot, North Dakota 58701
Donald W. Smith, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, D.C. 20036-1800
(Names and Addresses of agents for service)

Approximate Date of Proposed Public Offering: Continuous

Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.

VIKING MUTUAL FUNDS

CONTENTS OF REGISTRATION STATMENT ON FORM N-1A

This registration statement consists of the following papers and
documents:

Cover Sheet

Contents of Registration Statement on Form N-1A

Viking Tax-Free Fund for Montana
--------------------------------
Viking Tax-Free Fund for North Dakota
-------------------------------------
Viking Large-Cap Value Fund
---------------------------

Part A - Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Pages

Preliminary Prospectus
July 15, 1999

VIKING MUTUAL FUNDS

PROSPECTUS August 2, 1999

Viking Mutual Funds
P.O. Box 500
Minot, ND 58702

This prospectus describes a choice of three funds managed by Viking Fund
Management, LLC:

Viking Tax-Free Fund for Montana
Viking Tax-Free Fund for North Dakota
Viking Large-Cap Value Fund

Mutual funds:
* are not insured by the FDIC or any other government agency
* have no bank guarantees
* may lose value, so an investor may lose money

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

TABLE OF CONTENTS

Page

VIKING TAX-FREE FUND FOR MONTANA 1
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES 1
PRINCIPAL RISK FACTORS 2
FEE AND EXPENSE INFORMATION 4

VIKING TAX-FREE FUND FOR NORTH DAKOTA 6
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES 6
PRINCIPAL RISK FACTORS 7
FEE AND EXPENSE INFORMATION 9

VIKING LARGE-CAP VALUE FUND 11
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES 11
PRINICPAL RISK FACTORS 12
FEE AND EXPENSE INFORMATION 13

DISTRIBUTION AND TAXES 15
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS 15
TAXES 15

MANAGEMENT 17
YEAR 2000 PROBLEM 18

YOUR ACCOUNT 19
SALES CHARGES 19
SALES CHARGE REDUCTIONS AND WAIVERS 19
BUYING SHARES 21
INVESTOR SERVICES 23
SELLING SHARES 24
ACCOUNT POLICIES 26
QUESTIONS 28

ADDITIONAL INFORMATION 29
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS 29
STATEMENT OF ADDITIONAL INFORMATION (SAI) 29

VIKING TAX-FREE FUND FOR MONTANA

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Viking Tax-Free Fund for Montana seeks the highest level of current income
that is exempt from federal and Montana personal income taxes and is
consistent with preservation of capital. The Fund is not an appropriate
investment for qualified retirement plans and individual retirement accounts.

To pursue its objective, the Fund normally invests:

* at least 80% of its total assets in municipal securities that pay
interest free from federal income taxes, including the federal
alternative minimum tax;

* at least 80% of its total assets in municipal securities that pay interest
free from Montana personal income taxes, although the Fund tries to invest
all of its assets in these securities.

Municipal securities are debt obligations issued by state or local government
entities to fund various public projects, including, but not limited to, the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and water
and sewer works. Other public purposes for which municipal securities may be
issued include:

* to refund outstanding obligations

* to obtain funds for general operating expenses

* to obtain funds to loan to other public institutions and facilities

The two general classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise tax or other specific revenue source.

The investment manager actively manages the Fund's portfolio:

* by assessing the interest rate outlook

* by assessing changes in the relative risk/reward between long and short-
term bonds (yield curve)

* by selecting securities for superior price or income performance

* by looking statewide for top performing regions and industries

A-1

The Fund may invest up to 20% of its total assets in U.S. territorial
obligations (including qualifying obligations of Puerto Rico, the U.S. Virgin
Islands and Guam), the interest on which is exempt from federal and Montana
personal income taxes. The Fund may invest up to 20% of its total assets in
private activity bonds, the interest on which is a tax preference item for
purposes of the federal alternative minimum tax.

The Fund may invest more than 25% of its total assets in municipal securities
that finance similar types of projects, such as education, healthcare,
housing, industrial development, transportation or pollution control.
Economic, business, political or other changes can affect all securities of a
similar type.

All of the municipal securities in which the Fund invests are rated, at the
time of purchase, within the four highest ratings by a nationally recognized
statistical rating service such as Standard and Poor's or Moody's Investors
Service, Inc. or are of comparable quality as determined by the Fund's
investment manager.

Under normal circumstances, the Fund will maintain an average maturity at
between fifteen and thirty years.

During the period of the Fund's initial operations, which is expected not
to exceed six months, or during unusual market or other conditions, the Fund
may temporarily depart from its investment objective and invest up to 100% of
its assets in short-term U.S. Government obligations, cash and cash
equivalents. These short-term investments may be taxable.

The Fund does not buy securities on margin, sell securities short, use
commodities or futures contracts, or use derivative securities of any kind.
See "Investment Restrictions" in the Fund's Statement of Additional
Information ("SAI").

PRINCIPAL RISK FACTORS

General risk. There is no assurance that the Fund will meet its investment
goal. The Fund's share price, and the value of your investment, may change.
When the value of the Fund's investments go down, so does its share price.
Similarly, when the value of the Fund's investments go up, its share price
does as well. Since the value of the Fund's shares can go up or down, it is
possible to lose money by investing in the Fund.

Non-diversified Fund. Because the Fund is a non-diversified Fund, it may
invest a relatively high percentage of its assets in a limited number of
issuers; therefore its investment return is more likely to be impacted by
changes in the market value and returns of any one issuer.

Single-state Fund. Because the Fund focuses its investments in the municipal
securities of Montana, adverse economic, political or regulatory occurrences
in Montana will have a greater impact on investment returns than would be the
case for a municipal securities fund investing nationally. Montana's economy
is based primarily on agriculture, tourism, mining and the processing of
minerals and agricultural / forest products. Specific issues may arise
pertaining to these sectors that may have an impact on the ability of local
municipal securities issuers to meet their obligations.

A-2

Interest rate risk. When interest rates rise, debt security prices fall.
When interest rates fall, debt security prices go up. Generally, interest
rates rise during times of inflation or a growing economy, and fall during an
economic slowdown or recession.

Maturity. Generally, longer-term securities are more susceptible to changes
in value as a result of interest-rate changes than are shorter-term
securities.

Credit risk. Credit risk is the possibility that an issuer will be unable to
make interest payments or repay principal. Changes in an issuer's financial
strength or in a security's credit rating may affect its value. Even
securities supported by credit enhancements have the credit risk of the entity
providing the credit support. Changes in the credit quality of the credit
provider could affect the value of the security and the Fund's share price.

Call risk. Call risk is the likelihood that a security will be prepaid (or
"called") before maturity. An issuer is more likely to call its bonds when
interest rates are falling, because the issuer can issue new bonds with lower
interest payments. If a bond is called, the Fund may have to replace it with
a lower-yielding security.

Portfolio strategy. The investment manager's skill in choosing appropriate
investments for the Fund will determine in part the Fund's ability to achieve
its investment objective.

Inflation risk. There is a possibility that the rising prices of goods and
services may have the effect of offsetting a Fund's real return. This is
likely to have a greater impact on the returns of bond funds and money market
funds, which historically have had more modest returns in comparison to equity
funds.

More detailed information about the Fund, its policies and risks can be found
in the Fund's SAI.

A-3

FEE AND EXPENSE INFORMATION

This information is designed to help you understand the fees and expenses that
you may pay if you buy and hold shares of the Fund. You will find details
about fee discounts and waivers in the "Your Account" section of this
prospectus.

Shareholder fees: Fees paid directly from your investment.

Maximum Sales Charge (Load) Imposed on
Purchases (as a % of offering price) 4.50%

Maximum Deferred Sales Charge (Load)
(as % of redemption proceeds) None

Maximum Sales Charge (Load) Imposed on
Reinvested Distributions None

Redemption Fee (as % of amount redeemed,
if applicable) None

Exchange Fee None

Annual Fund operating expenses: Expenses that are deducted from Fund
assets.

Management Fee 0.60%
Distribution (12b-1) Fees 0.25%
Other Expenses* 0.71%

Total Annual Fund Operating Expenses 1.56%

Less Expense Reimbursement** (0.71%)

Net Expenses 0.85%

*Other expenses are based on estimated amounts for the current fiscal year.

**The Fund's investment manager has contractually agreed to waive its fees
or reimburse the Fund for its expenses through August 1, 2009, so that the
Fund's total operating expenses during this period will not exceed 0.85% of
its average net assets on an annual basis. This contractual waiver may not be
altered by the investment manager during the stated period.

A-4

EXAMPLE

This example is to help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds.

This example illustrates the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. It assumes a 5% annual return, the reinvestment of all dividends and
other distributions and " Net Annual Fund Operating Expenses" remaining the
same each year. The example is hypothetical: actual Fund expenses and return
vary from year to year.

Fees and expenses after:

1 Year $532

3 Years $704

Since the Fund is in its first fiscal year, it has no reportable past
performance.

A-5

VIKING TAX-FREE FUND FOR NORTH DAKOTA

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Viking Tax-Free Fund for North Dakota seeks the highest level of current
income that is exempt from federal and North Dakota personal income taxes and
is consistent with preservation of capital. The Fund is not an appropriate
investment for qualified retirement plans and individual retirement accounts.

To pursue its objective, the Fund normally invests:

* at least 80% of its total assets in municipal securities that pay
interest free from federal income taxes, including the federal
alternative minimum tax;

* at least 80% of its total assets in municipal securities that pay interest
free from North Dakota personal income taxes, although the Fund tries to
invest all of its assets in these securities.

* to refund outstanding obligations

* to obtain funds for general operating expenses

* to obtain funds to loan to other public institutions and facilities

The investment manager actively manages the Fund's portfolio:

* by assessing the interest rate outlook

* by assessing changes in the relative risk/reward between long and
short-term bonds (yield curve)

* by selecting securities for superior price or income performance

A-6

* by looking statewide for top performing regions and industries

The Fund may invest up to 20% of its total assets in U.S. territorial
obligations (including qualifying obligations of Puerto Rico, the U.S. Virgin
Islands and Guam), the interest on which is exempt from federal and North
Dakota personal income taxes. The Fund may invest up to 20% of its total
assets in private activity bonds, the interest on which is a tax preference
item for purposes of the federal alternative minimum tax.

Under normal circumstances, the Fund will maintain an average maturity at
between fifteen and thirty years.

PRINCIPAL RISK FACTORS

Single-state Fund. Because the Fund focuses its investments in the municipal
securities of North Dakota, adverse economic, political or regulatory
occurrences in North Dakota will have a greater impact on investment returns
than would be the case for a municipal securities fund investing nationally.
North Dakota's economy is based primarily on agriculture, mining and energy.
Specific issues may arise pertaining to these sectors that may have an impact
on the ability of local municipal securities issuers to meet their
obligations.

A-7

Maturity. Generally, longer-term securities are more susceptible to changes
in value as a result of interest-rate changes than are shorter-term
securities.

Portfolio strategy. The investment manager's skill in choosing appropriate
investments for the Fund will determine in part the Fund's ability to achieve
its investment objective.

More detailed information about the Fund, its policies and risks can be found
in the Fund's SAI.

A-8

FEE AND EXPENSE INFORMATION

Shareholder fees: Fees paid directly from your investment.

Maximum Sales Charge (Load) Imposed on
Purchases (as a % of offering price) 4.50%

Maximum Deferred Sales Charge (Load)
(as % of redemption proceeds) None

Maximum Sales Charge (Load) Imposed on
Reinvested Distributions None

Redemption Fee (as % of amount redeemed,
if applicable) None

Exchange Fee None

Annual Fund operating expenses: Expenses that are deducted from Fund
assets.

Management Fee 0.60%
Distribution (12b-1) Fees 0.25%
Other Expenses* 0.71%

Total Annual Fund Operating Expenses 1.56%

Less Expense Reimbursement** (0.71%)

Net Expenses 0.85%

*Other expenses are based on estimated amounts for the current fiscal year.

A-9

EXAMPLE

This example is to help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds.

This example illustrates the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. It assumes a 5% annual return, the reinvestment of all dividends and
other distributions and "Net Annual Fund Operating Expenses" remaining the
same each year. The example is hypothetical: actual Fund expenses and return
vary from year to year.

Fees and expenses after:

1 Year $532

3 Years $704

Since the Fund is in its first fiscal year, it has no reportable past
performance.

A-10

VIKING LARGE-CAP VALUE FUND

INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Viking Large-Cap Value Fund seeks long-term total return and capital
preservation.

To pursue its objective, the Fund normally invests:

* at least 80% of its total assets in equity securities of companies with
market capitalization in excess of $1.5 billion;

* at least 65% of its total assets in equity securities of companies with
large market capitalization. Large-cap companies have a market
capitalization of at least $5 billion. Companies whose capitalization
falls below $5 billion after purchase continue to be considered large-cap
companies for purposes of this 65% investment policy.

The Fund invests primarily in the equity securities of U.S. companies that
are leaders in their industries. Equity securities generally entitle the
holder to participate in a company's general operating results. These include
common stocks, preferred stocks and convertible securities. The Fund's
investment committee invests the Fund's assets by pursuing a value-oriented
strategy. The strategy begins with a screening process that seeks to identify
growing companies whose stocks sell at discounted price-to-earnings (P/E) and
price-to-cash flow (P/CF) multiples. Favored are companies that maintain
strong balance sheets and provide above-average dividend yields. The
investment committee attempts to discern situations where intrinsic asset
values are not widely recognized. Rigorous fundamental analysis, from both a
quantitative and qualitative standpoint, is applied to all investment
candidates. Although the investment committee employs a disciplined "bottom-
up" approach to identify undervalued stocks, they are sensitive to emerging
trends in different economic sectors. They do not, however, rely upon
economic forecasts in making asset allocation decisions, and prefer to remain
fully invested.

The Fund may invest up to 20% of its total assets in sponsored American
Depositary Receipts ("ADRs"). ADRs are typically issued by a U.S. bank or
trust company and evidence ownership of underlying securities issued by a
foreign corporation.

A-11

PRINCIPAL RISK FACTORS

Stock market volatility. While stocks have historically outperformed other
asset classes over the long term, stock markets are volatile and can decline
significantly in response to adverse issuer, political, regulatory, market or
economic developments. Different parts of the market can react differently to
these developments.

Securities of foreign issuers. Although they may add diversification,
investments in U.S. dollar-denominated securities of foreign issuers, such as
ADRs, can be riskier, because foreign markets tend to be more volatile and
currency exchange rates fluctuate.

Issuer-specific changes. The value of an individual security can be more
volatile than the market as a whole and can perform differently than the value
of the market as a whole.

Portfolio strategy. The investment committee's skill in choosing appropriate
investments for the Fund will determine in part the Fund's ability to achieve
its investment objective.

More detailed information about the Fund, its policies and risks can be found
in the Fund's SAI.

A-12

Fee and expense information

Shareholder fees: Fees paid directly from your investment.

Maximum Sales Charge (Load) Imposed on
Purchases (as a % of offering price) 5.25%

Maximum Deferred Sales Charge (Load)
(as % of redemption proceeds) None

Maximum Sales Charge (Load) Imposed on
Reinvested Distributions None

Redemption Fee (as % of amount redeemed,
if applicable) None

Exchange Fee None

Annual Fund operating expenses: Expenses that are deducted from Fund
assets.

Management Fee 0.80%
Distribution (12b-1) Fees 0.40%
Other Expenses* 0.52%

Total Annual Fund Operating Expenses 1.72%

Less Expense Reimbursement** (0.37%)

Net Expenses 1.35%

*Other expenses are based on estimated amounts for the current fiscal year.

**The Fund's investment manager has contractually agreed to waive its fees
or reimburse the Fund for its expenses through August 1, 2009, so that the
Fund's total operating expenses during this period will not exceed 1.35% of
its average net assets on an annual basis. This contractual waiver may not be
altered by the investment manager during the stated period.

A-13

EXAMPLE

This example is to help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds.

This example illustrates the impact of the above fees and expenses on an
account with an initial investment of $10,000, based on the expenses shown
above. It assumes a 5% annual return, the reinvestment of all dividends and
other distributions and "Net Annual Fund Operating Expenses" remaining the
same each year. The example is hypothetical: actual Fund expenses and return
vary from year to year.

Fees and expenses after:

1 Year $653

3 Years $923

Since the Fund is in its first fiscal year, it has no reportable past
performance.

A-14

DISTRIBUTIONS AND TAXES

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The Viking Tax-Free Fund for Montana and the Viking Tax-Free Fund for North
Dakota (each a "Tax-Free Fund") each declares daily dividends from its net
investment income. Net investment income consists of all interest income
earned on portfolio assets less all Fund expenses. Income dividends are
distributed monthly and net realized capital gains, if any, are distributed
annually.

The Viking Large-Cap Value Fund ("Large-Cap Fund") intends to pay a dividend
at least annually representing substantially all of its net investment income.
Net capital gains, if any, also may be distributed annually by the Fund. To
receive a dividend or other distribution, you must be a shareholder on the
record date. The record dates for the Fund's distributions will vary. The
amount of the Fund's distributions will vary, and there is no guarantee the
Fund will pay distributions.

Income dividends and capital gain distributions, if any, of each Fund will be
credited to shareholder accounts in full and fractional shares of the Fund at
the net asset value on the reinvestment date, except that, on written request
to the Shareholder Services Agent or if specified on the application, a
shareholder may choose to have dividends or capital gain distributions or both
paid in cash.

Distributions of a Fund that are reinvested will normally be reinvested in
shares of that Fund. However, by writing to the Shareholder Services Agent,
you may choose to have distributions of a Fund invested in shares of another
Viking Mutual Fund at the net asset value of that Fund. To use this
privilege, you must maintain a minimum account value of $1,000 in the Fund
making the distribution. The Fund will reinvest distribution checks (and
future distributions) in shares of the Fund if checks are returned as
undeliverable. Distributions, whether received in cash or reinvested, may be
subject to federal income tax.

TAXES

Generally, income dividends of a Tax-Free Fund that represent interest
received from municipal securities is not taxable to shareholders. Interest
from portfolio holdings in "private activity bonds" is an item of tax
preference for purposes of the federal alternative minimum tax. The tax
exemption of a Tax-Free Fund's dividends from federal income tax and, if
applicable, Montana or North Dakota state or local personal income taxes does
not necessarily result in exemption under the income or other tax laws of any
other state or local taxing authority. The laws of the state and local taxing
authorities vary with respect to the taxation of interest income and
investments, and shareholders are advised to consult their own tax advisers as
to the status of their accounts under state and local tax laws. The Tax-Free
Funds are not appropriate investments for qualified retirement plans and
individual retirement accounts.

Dividends of any Fund representing taxable net investment income, if any, and
net short-term capital gains, if any, are taxable to shareholders as ordinary
income. Distributions of net long-term capital gains, if any, are taxable to

A-15

individual shareholders at a maximum 20% federal tax rate, regardless of the
length of time shareholders have owned shares. The foregoing is true whether
you reinvest your distributions in additional shares of the Fund or receive
them in cash.

The exchange of Fund shares will be treated as a sale, and any gain on Fund
shares when sold will be subject to tax.

Please keep in mind that if you invest in a Fund shortly before the record
date of a distribution (other than a distribution of tax-exempt interest by a
Tax-Free Fund), the distribution reduces the net asset value of the shares and
you will receive some of your investment back in the form of a taxable
distribution.

Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
October, November or December but paid in January are taxable as if they were
paid in December.

A-16

MANAGEMENT

The Board of Trustees has overall responsibility for the management of the
Funds. Viking Fund Management, LLC ("Viking Management" or "investment
manager"), located at 1400 14th Avenue SW, Minot, North Dakota 58701, is the
Funds' investment manager.

The Funds have retained Viking Management to provide the Funds with
investment advice and portfolio management. Mr. Shannon D. Radke is a
Governor and President of Viking Management. Mr. Radke holds a Bachelor of
Business Administration degree in Banking and Finance from the University of
North Dakota. He has been engaged in the securities business since 1988 as a
broker and as operations manager and later as chief operating officer of an
unrelated investment advisory firm. Mr. Radke was a founder of Viking
Management in September 1998 and is responsible for managing the Tax-Free
Funds' portfolios on a day-to-day basis. As compensation for the advisory
services furnished to the Funds, the Funds pay Viking Management monthly
compensation calculated daily by applying the annual rates of 0.50% to the
Tax-Free Funds' daily net assets and 0.70% to the Large-Cap Fund's daily net
assets.

Under a sub-advisory agreement between Fox Asset Management (the "sub-
adviser") and the investment manager, the sub-adviser provides the Large-Cap
Fund with investment advice and portfolio management subject to the overall
supervision of Viking Management. The sub-adviser, located at 44 Sycamore
Avenue, Little Silver, New Jersey 07739, as of April 30, 1999, managed assets
of approximately $ 2.0 billion for employee benefit plans, endowments,
foundations and other institutional investors. The sub-adviser provides its
services under a multiple-manager, investment committee system ("investment
committee"). The investment committee currently consists of five senior
portfolio managers with combined securities industry experience of 103 years.
Mr. J. Peter Skirkanich is a graduate of the Wharton School, University of
Pennsylvania. He is President and Chief Investment Officer of the sub-
adviser. Mr. Skirkanich has been engaged in the securities business since
1973 as an analyst and money manager. Mr. Skirkanich founded the firm in 1985
and serves as the investment committee Chairman. As compensation for its
services provided to the Large-Cap Fund, the investment manager pays the sub-
adviser monthly compensation calculated daily by applying the annual rate of
0.40% to the Fund's daily net assets of up to $100 million and 0.35% to the
Fund's daily net assets in excess of $100 million. The investment manager has
also entered into a separate sub-advisory agreement with the sub-adviser which
provides that the investment manager may delegate to the sub-adviser certain
investment advisory responsibilities for the Tax-Free Funds for a fee, payable
by the investment manager, at an annual rate of 0.20% of the daily net assets
of these Funds. However, the investment manager does not currently intend to
utilize the sub-adviser's services with regard to the Tax-Free Funds. As of
the date that this prospectus was written, the investment manager had not
previously managed portfolio assets.

The Funds have also entered into an agreement with Viking Management to
provide administrative services, portfolio accounting and transfer agent
services to each of the Funds for a fee at an annual rate of 0.15% of daily
net assets, plus a per account charge and reimbursement of certain direct
expenses.

A-17

YEAR 2000 PROBLEM

The common practice in computer programming of using just two digits to
identify a year has resulted in the Year 2000 problem throughout the
information technology industry. If unchanged, many computer applications and
systems could misinterpret dates occurring after December 31, 1999, leading to
errors or failure. Such failure could adversely affect a Fund's operations,
including pricing, securities trading, and the servicing of shareholder
accounts.

While Year 2000 computer problems could have a negative effect on each Fund,
at Viking Management we are working to avoid such problems and have obtained
assurances from each Fund's service providers that they are taking similar
steps.

Similarly, if an issuer of securities in which a Fund invests is adversely
affected by Year 2000 problems, it is likely that the price of the securities
will be adversely affected. A decrease in value of one or more of a Fund's
portfolio holdings will have a similar impact on the price of the Fund's shares
and its performance. Viking Management and the sub-adviser each will make
effort to determine whether the issuers of securities in which the Funds invest
will be adversely affected by Year 2000 problems. However, because the problem
is unprecedented, it is impossible to know whether these efforts will be
successful and, accordingly, whether each Fund may be adversely affected.

A-18

YOUR ACCOUNT

SALES CHARGES

The sales charge Which equals
makes up this % of this % of your
When you invest this amount the offering price investment*
- ------------------------------------------------------------------------

TAX-FREE FUNDS
Less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 4.00% 4.17%
$250,000 but less than $500,000 3.00% 3.09%
$500,000 but less than $1,000,000 2.00% 2.04%
$1,000,000 or more 1.00% 1.01%

LARGE-CAP VALUE FUND
Less than $50,000 5.25% 5.54%
$50,000 but less than $100,000 4.75% 4.99%
$100,000 but less than $250,000 4.25% 4.44%
$250,000 but less than $500,000 3.50% 3.63%
$500,000 but less than $1,000,000 2.50% 2.56%
$1,000,000 or more 1.00% 1.01%
____________
* Rounded to nearest one-hundredth percent.

Distribution and Service (12b-1) Fees. The Funds have a distribution plan,
sometimes known as a Rule 12b-1 plan, that allows the Tax-Free Funds to pay
distribution and other fees of up to 0.25% of average daily net assets per
year and the Large-Cap Fund to pay distribution and other fees of up to 0.40%
of average daily net assets per year to those who sell and distribute shares
and provide other services to shareholders. Because these fees are paid on an
on-going basis, over time these fees will increase the cost of your
investment.

SALES CHARGE REDUCTIONS AND WAIVERS

If you qualify for any of the sales charge reductions or waivers below, please
let us know at the time you make your investment to help ensure you receive
the lower sales charge.

Quantity Discounts. We offer several ways for you to combine your purchases
in Viking Mutual Funds to take advantage of the lower sales charges for large
purchases of shares.

A-19

* Cumulative Quantity Discount - lets you combine all of your shares in
Viking Mutual Funds for purposes of calculating the sales charge. You may
also combine the shares of your spouse, and your children or grandchildren, if
they are under the age of 21. Certain company and retirement plan accounts
may also be included.

* Letter of Intent (LOI) - expresses your intent to buy a stated dollar
amount of shares over a 13-month period and lets you receive the same sales
charge as if all shares had been purchased at one time. We will reserve a
portion of your shares to cover any additional sales charge that may apply if
you do not buy the amount stated in your LOI.

Reinstatement Privilege. If you sell shares of a Viking Mutual Fund, you may
reinvest some or all of the proceeds within 365 days without an initial sales
charge.

Waivers for Certain Investors. Shares may be purchased without an initial
sales charge by various individuals and institutions, including:

* officers, trustees, governors and employees (including retirees) of a
Fund, its investment adviser, its principal underwriter or certain
affiliated companies, for themselves or members of their immediate
families or any trust, pension, profit-sharing or other benefit plan for
such persons (immediate family is defined to include spouse, children,
parents and siblings)

* registered representatives and employees (including their spouses and
dependent children) of broker-dealers having selling group agreements with
Viking Fund Distributors, LLC ("Viking Distributors") (the Funds'
underwriter) or any trust, pension, profit-sharing or other benefit plan
for such persons

* employees (including their spouses and dependent children) of banks and
other financial services firms that provide advisory or administrative
services related to the Funds pursuant to an agreement with the Funds,
Viking Management or one of its affiliates or any trust, pension, profit-
sharing or other benefit plan for such persons

* in connection with the acquisition of the assets of or merger or
consolidation with another investment company

* through certain investment advisers registered under the Investment
Advisers Act of 1940 and other financial services firms, acting solely as
agent for their clients, provided that such shares be sold for the benefit
of their clients participating in an investment advisory program under
which such clients pay a fee to the investment adviser or other firm for
portfolio management or agency brokerage services

* certain retirement plans if the plan is sponsored by an employer (i) with
at least 100 employees or (ii) with retirement plan assets of $1 million
or more

A-20

* persons who retain an ownership interest in or who are the beneficial
owners of an interest in Viking Management, for themselves or members of
their immediate families, or any trust, pension, profit sharing or other
benefit plan for such persons

A Fund must be notified in advance that an investment qualifies for purchase
at net asset value.

BUYING SHARES

Minimum investments

Initial Additional
- ------------------------------------------------------------------------------
Regular accounts $ 500 $ 25
- ------------------------------------------------------------------------------
UGMA/UTMA accounts $ 250 $ 25
- ------------------------------------------------------------------------------
IRAs, Roth IRAs, or IRA rollovers $ 250 $ 25
- ------------------------------------------------------------------------------
Retirement accounts
(other than IRAs, Roth IRAs, or IRA rollovers) $ 25 $ 25
- ------------------------------------------------------------------------------
Automatic investment plan $ 25 $ 25
- ------------------------------------------------------------------------------

A-21

Account Application. If you are opening a new account, please complete and
sign the enclosed account application. To save time, you can sign up now for
services you may want on your account by completing the appropriate sections
of the application.

Buying shares
- ------------------------------------------------------------------------------
Opening an account Adding to an account

- ------------------------------------------------------------------------------
Through your Contact your investment Contact your investment
investment representative representative
representative

- ------------------------------------------------------------------------------
By Mail Make your check payable Make your check payable
to the Fund in which you to the Fund in which you are
investing. investing. Include your
account number on the check.

Mail the check and your Fill out the deposit slip
signed application to from your confirmation
statement.
Shareholder Services. If you do not have a slip,
include a note with your
name, the Fund name, and your
account number.

Mail the check and deposit
slip or note to Shareholder
Services.

- ------------------------------------------------------------------------------
By Wire Call to receive wire Call to receive wire
instructions. instructions.

Mail your signed To make a same day wire
application to Shareholder investment, please call us
Services. by 1:00 p.m. central time
and make sure your wire
To make a same day wire arrives by 3:00 p.m.
investment, please call
us by 1:00 p.m. central
time and make sure your
wire arrives by 3:00 p.m.

- ------------------------------------------------------------------------------
By Exchange Call Shareholder Services Call Shareholder Services
at the number below, at the number below,
or send signed written or send signed written
instructions. instructions.

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

Viking Shareholder Services

For overnight deliveries:
P.O. Box 500 1400 14th Avenue, S.W.
Minot, ND 58702 Minot, ND 58701

Call toll-free 1-800-933-8413
Monday through Friday 8:30 a.m. to 5:00 p.m., central time.

A-22

INVESTOR SERVICES

Automatic Investment Plan. This plan offers a convenient way for you to
invest in a Fund by automatically transferring money from your checking or
savings account each month to buy shares. The minimum investment to open an
account with an automatic investment plan is $25. To sign up, complete the
appropriate section of your account application.

Distribution Options. You may reinvest distributions you receive from a Fund
in an existing account of the Fund or another Viking Mutual Fund. You can
also have your distributions deposited in a bank account, or mailed by check.
Deposits to a bank account may be made by electronic fund transfer.

Please indicate on your application the distribution option you have chosen,
otherwise we will reinvest your distributions in the Fund.

No-Fee Retirement Plans. Viking Mutual Funds offers a variety of
retirement plans for individuals free from any custody fees.
Sales charges and shareholder expenses of the Funds are still applicable.
These plans require separate applications and their policies and procedures
may be different than those described in this prospectus. For more
information please call your investment representative or Shareholder Services
at 1-800-933-8413.

Telephone Privileges. You will automatically receive telephone privileges
when you open your account, allowing you and your investment representative to
sell or exchange your shares and make certain other changes to your account by
phone.

For accounts with more than one registered owner, telephone privileges also
allow the Funds to accept written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone. For
all other transactions and changes, all registered owners must sign the
instructions.

As long as we take certain measures to verify telephone requests, we will not
be responsible for any losses that may occur from unauthorized requests. Of
course, you can decline telephone exchange or redemption privileges on your
account application.

Exchange Privilege. You can exchange shares between Viking Mutual Funds,
without paying any additional sales charges. Exchanges may only be made
between identically registered accounts, unless you send written instructions
with a signature guarantee.

Systematic Withdrawal Plan. This plan allows you to automatically sell your
shares and receive regular payments from your account. Certain terms and
minimums apply. To sign up, complete the appropriate section of your
application.

A-23

SELLING SHARES

You can sell your shares at any time.

Selling Shares in Writing. Requests to sell $100,000 or less can generally be
made over the phone or with a simple letter. Sometimes, however, to protect
you and the Funds we will need written instructions signed by all registered
owners, with a signature guarantee for each owner, if:

* you are selling more than $100,000 worth of shares

* you want your proceeds paid to someone who is not a registered owner

* you want to send your proceeds somewhere other than the address of record,
or pre-authorized bank or brokerage firm account

* you have changed the address on your account by phone within the last 15
days

Selling Recently Purchased Shares. If you sell shares recently purchased
with a check or draft, we may delay sending you the proceeds until your check
or draft has cleared, which may take up to fifteen days. A certified or
cashier's check may clear in less time.

Redemption Proceeds. Normally, your redemption check will be sent the next
business day after we receive your request in proper form, but Viking Mutual
Funds may take up to seven days if making immediate payment would adversely
affect the Fund. We are not able to receive or pay out cash in the form of
currency.

Retirement Plans. You may need to complete additional forms to sell shares
in a Viking Mutual Funds retirement plan. For participants under age 59 1/2,
tax penalties may apply. Call your investment representative or Shareholder
Services at 1-800-933-8413 for details.

a-24

Selling shares
- ------------------------------------------------------------------------------

To sell some or all of your shares

- ------------------------------------------------------------------------------
Through your Contact your investment representative
investment
representative

- ------------------------------------------------------------------------------
By Mail Send written instructions and endorsed share
certificates (if you hold share certificates) to
Shareholder Services. Corporate, partnership or
trust accounts may need to send additional
documents.

Specify the Fund, the account number and the dollar
value or number of shares you wish to sell. Be
sure to include all necessary signatures and any
additional documents, as well as signature
guarantees if required.

A check will be mailed to the name(s) and address
on the account, or otherwise according to your
written instructions.

- ------------------------------------------------------------------------------
By Phone As long as your transaction is for $100,000 or
less, you do not hold share certificates and you
have not changed your address by phone within the
last 15 days, you can sell your shares by phone.

A check will be mailed to the name(s) and address
on the account. Written instructions, with a
signature guarantee, are required to send the check
to another address or to make it payable to another
person.

- ------------------------------------------------------------------------------
By Wire You can call or write to have redemption proceeds
of $1,000 or more wired to a bank or escrow
account. See the policies above for selling
shares by mail or phone.

Before requesting a wire, please make sure we have
your bank account information on file. If we do
not have this information, you will need to send
written instructions with your bank's name and
address, your bank account number, the ABA routing
number, and a signature guarantee.

Requests received in proper form by 3:00 p.m.
central time will be wired the next business day.

- ------------------------------------------------------------------------------
By Exchange Obtain a current prospectus for the Fund you are
considering.

Call Shareholder Services at the number below or
send signed written instructions. See the policies
above for selling shares by mail or phone.

If you hold share certificates, you will need to
return them to the Fund before your exchange can be
processed.

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

A-25

Viking Shareholder Services

For overnight deliveries:
P.O. Box 500 1400 14th Avenue, S.W.
Minot, ND 58702 Minot, ND 58701

Call toll-free 1-800-833-8413
Monday through Friday 8:30 a.m. to 5:00 p.m., central time.

ACCOUNT POLICIES

Calculating Share Price. Each Fund calculates the net asset value per share
(NAV) each business day at the close of trading on the New York Stock Exchange
(normally 3:00 p.m. central time). NAV is calculated by dividing a Fund's net
assets by the number of its shares outstanding.

Assets for which market quotations are readily available are valued at their
market value. If market prices are unavailable, or if an event occurs after
the close of the trading market that materially affects asset value, assets
may be valued at their fair value as determined in good faith and in a method
approved by the Board of Trustees. Municipal securities are valued by Viking
Management using a matrix system which estimates market values from yield data
relating to securities with similar characteristics.

Requests to buy and sell shares are processed at the NAV next calculated after
we receive your request in proper form.

Accounts With Low Balances. If the value of your account falls below $250
because you sell some of your shares, we may mail you a notice asking you to
bring the account back up to its applicable minimum investment amount. If you
choose not to do so within 30 days, we may close your account and mail the
proceeds to the address of record.

Statements and Reports. You will receive confirmation statements that show
your account transactions. You will also receive the Funds' financial reports
every six months.

The dealer or other investment representative of record on your account
will also receive confirmation statements and other information about your
account directly from the Fund.

Joint Accounts. Unless you specify a different registration, accounts with
two or more owners are registered as "joint tenants with rights of
survivorship." To make any ownership changes to a joint account, all owners
must agree in writing, regardless of the law in your state.

Additional Policies. Please note that the Funds maintain additional policies
and reserve certain rights, including:

A-26

* The Funds may refuse any order to buy shares, including any purchase under
the exchange privilege.
* At any time, the Funds may change their investment minimums or waive or
lower their minimums for certain purchases.
* The Funds may modify or discontinue the exchange privilege on 60 days'
notice.
* You may only buy shares of a Fund eligible for sale in your state or
jurisdiction.
* To permit investors to obtain the current price, dealers are responsible
for transmitting all orders to the Fund promptly.

Dealer Compensation. Qualifying dealers who sell Fund shares may receive
sales commissions and other payments. These are paid by Viking Distributors
from sales charges, distribution and service (12b-1) fees and its other
resources.

TAX-FREE FUNDS

Commission(%)
Investment under $100,000 3.75%
$100,000 but under $250,000 3.25%
$250,000 but under $500,000 2.25%
$500,000 but under $1,000,000 1.50%
$1,000,000 or more 1.00%
12b-1 fee to dealer 0.25%

LARGE-CAP VALUE FUND

Commission(%)
Investment under $50,000 4.50%
$50,000 but under $100,000 4.00%
$100,000 but under $250,000 3.50%
$250,000 but under $500,000 3.00%
$500,000 but under $1,000,000 2.25%
$1,000,000 or more 1.00%
12b-1 fee to dealer 0.40%

A-27

QUESTIONS

If you have any questions about the Funds or your account, you can write to
us at P.O. Box 500, Minot, ND 58702. Overnight deliveries should be sent to
1400 14th Avenue, S.W., Minot, ND 58701. You can also call us at one of the
following numbers. For your protection and to help ensure we provide you with
quality service, all calls may be monitored or recorded.

Hours (central time,
Department Name Telephone Number Monday through Friday)
- ------------------------------------------------------------------------------
Shareholder Services 1-800-933-8413 8:30 a.m. to 5:00 p.m.
Dealer Services 1-800-933-8513 8:30 a.m. to 5:00 p.m.

A-28

ADDITIONAL INFORMATION

You can learn more about each Fund in the following documents:

ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes a discussion of recent market conditions and Fund strategies,
financial statements, detailed performance information, portfolio holdings,
and the auditor's report. The Funds' first annual report will be available
within 60 days of the end of the Funds' first fiscal year (December 31, 1999).

STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more information about each Fund, its investments and policies.
It is incorporated by reference, so it is legally a part of this prospectus.

For a free copy of the current annual/semiannual report or the SAI, please
contact your investment representative or call us at the number below.

VIKING SHAREHOLDER SERVICES
1-800-933-8413

You can also obtain information about each Fund by visiting the SEC's Public
Reference Room in Washington DC (phone 1-800/SEC-0330) or by sending your
request and a duplicating fee to the SEC's Public Reference Section,
Washington, DC 20549-6009. You can also visit the SEC's Internet site at
http://www.sec.gov.

SEC File No. 811-9277

A-29

VIKING MUTUAL FUNDS
P.O. Box 500
Minot, ND 58702

For overnight deliveries:
1400 14th Avenue SW
Minot, ND 58701

TRUSTEES
Bruce C. Adams
Shirley R. Martz
Mike Timm
Shannon D. Radke
Douglas P. Miller

INVESTMENT MANAGER
Viking Fund Management, LLC
1400 14th Avenue SW
Minot, ND 58701

SUB-ADVISER
(For Viking Large-Cap Value Fund)
Fox Asset Management
44 Sycamore Avenue
Little Silver, NJ 07739-1220

DISTRIBUTOR
Viking Fund Distributors, LLC
1400 14th Avenue SW
Minot, ND 58701

CUSTODIAN
First International Bank and Trust
3001 25th Street South
Fargo, ND 58103

A-30

TRANSFER AGENT
Viking Fund Management, LLC
P.O. Box 500
Minot, ND 58702

For overnight deliveries:
1400 14th Avenue SW
Minot, ND 58701

LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
Second Floor
Washington, DC 20036-1800

INDEPENDENT AUDITORS
Brady, Martz & Associates, P.C.
207 East Broadway, Suite 200
Bismarck, ND 58501

A-31

PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
July 15, 1999

The information in this Statement of Additional Information is not complete
and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective.
This Statement of Additional Information is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.

Account Application

Viking Mutual Funds
P.O. Box 500 For overnight deliveries:
Minot, ND 58702 1400 14th Ave. SW
1-800-933-8413 Minot, ND 58701
Monday through Friday 8:30 am to 5:00 pm, central time.
1 REGISTRATION PLEASE COMPLETE ONLY ONE REGISTRATION TYPE.

___ INDIVIDUAL OR JOINT ACCOUNT (If more than one owner, "joint tenants with
rights of survivorship" is assumed unless otherwise specified.)

_____________________________________________________________________________
First name Middle initial Last name

___ ___ ___-___ ___ -___ ___ ___ ___
Social Security number (SSN)

___________________________________________________ ___/___/___/___/___/___
Joint owner (s) Date of Birth

___ GIFTS/TRANSFERS TO A MINOR (UGMA/UTMA)

______________________________________________as Custodian for
Custodian's name (one custodian only)
______________________________________________
Minor's name (one minor only)

Under the ___ ___ Uniform Gifts/Transfer to Minors Act. __ __-__ __-__ __
(State) Minor's date of birth

___ ___ ___-___ ___-___ ___ ___ ___
Minor's Social Security number

___ TRUST, RETIREMENT PLAN*, CORPORATION, PARTNERSHIP, OR OTHER ENTITY
(circle one)
*DO NOT USE this application for any retirement plans administered by Viking
Fund Management, LLC. Please call 1-800-933-8413 to request a separate Viking
Mutual Funds retirement plan application.

For retirement plans, circle plan type: 401(k), Profit Sharing, Money
Purchase, 403(b), 457, IRA, ROTH IRA, SEP-IRA, SIMPLE-IRA, Other__________

_____________________________________________________________________________
Names of: Trust and Trustee(s); Retirement Plan, Plan Custodian and
Authorized Signer(s); or Corporation/Partnership and Authorized Signer(s).
___ ___-___ ___-___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Trust Date Taxpayer Identification Number (TIN)

Attach, as appropriate, first and last pages of trust documents, corporate
resolutions, partnership/organizational certificates or court documents
establishing authority of each individual signing this application.

2 MAILING ADDRESS
____________________________________________________________________________
Street address (P.O. Box acceptable if street address is given) City

______________________________________
State Zip

Daytime Phone ( ___ ___ ___ )___ ___ ___-___ ___ ___ ___

Evening Phone ( ___ ___ ___ )___ ___ ___-___ ___ ___ ___

___ U.S. citizen or resident alien; or
___ Non-resident alien (specify foreign country of permanent tax
residence:______________________ )

3 FUND SELECTION
Amount($)Invested
___ Viking Tax-Free Fund for Montana _______________
___ Viking Tax-Free Fund for North Dakota _______________
___ Viking Large-Cap Value Fund _______________

4 DIVIDEND AND CAPITAL GAINS DISTRIBUTION AND PAYMENT OPTIONS

Please select distribution options for your dividends and capital gains. All
dividends and capital gains will be reinvested in additional shares of the
same fund if you do not make a selection. Check only one option for each.

Income Dividends: ___ Reinvest, ___ Pay in cash, or
___ Direct to my Viking Mutual Funds account number __________________

Capital Gains: ___ Reinvest, ___ Pay in cash, or
___ Direct to my Viking Mutual Funds account number __________________

If you choose to have any distribution paid in cash, please check one of the
options below. We will send all distributions to you, by check, at your
current address of record if you do not make a selection.

___ Send distributions to my bank account (complete Section 6G, Bank
Information).
___ Send distributions to me at my current address of record
___ Send distributions to an alternate person and/or address (complete
Section 6F, Alternate Payee/Mailing Address).

5 BROKER-DEALER USE ONLY PLEASE PRINT

This application for the purchase of shares complies with the terms of our
selling agreement with Viking Fund Distributors, LLC ("Distributors") and
with the current prospectus for the Funds. We agree to notify Distributors
of any purchases of shares which may be eligible for reduced or eliminated
charges.

_________________________ _____________________ ______________________
Name of Firm Representative Name Representative Number
_________________________ _____________________ ______________________
Home Office Address Branch Office Address Branch Number
_________________________ _____________________
Authorized Firm Signature Branch Phone Number
_________________________
Title

Viking Use Only

Viking Dealer # __________
Accepted: Viking Fund Distributors, LLC By ___________________________
Date _______________

6. OPTIONAL SHAREHOLDER PRIVILEGES

A Automatic Investment Plan

Please process automatic investment transfers directly from my bank account
(complete Section 6G) beginning the month of ______________.

Frequency
Amount ($) (monthly,
($25 minimum quarterly, Investment Date
Fund Name(s) per fund) annually) (5th or 20th)
_____________ ______________ _____________ ______________
_____________ ______________ _____________ ______________

B Systematic Withdrawal Plan

Please begin systematic withdrawals from my fund account(s)* listed below
beginning the month of ________________.

Amount ($) Frequency**
($25 minimum (monthly,
Fund Name(s) per fund) quarterly, annually)
____________________ ____________________ ____________________
____________________ ____________________ ____________________
*Minimum balance of $5,000 per account is required. **Scheduled
withdrawals are made on the 25th of the month (or the first following business
day).
All payments will be sent to you, by check, at your current address of record
if you do not select a payment option below.

___ Send payments to my bank account (complete Section 6G, Bank Information).
___ Send payments to an alternate person and/or address (complete Section 6F,
Alternate Payee/Mailing Address).
___ Direct payments to my existing Viking Mutual Funds
account number ________________________________.

C Telephone Exchange and Redemption Privileges

You automatically have the convenience of Telephone Exchange and
Redemption Privileges unless you check below. Review your
Prospectus for a discussion of these privileges.

___ I do NOT want Telephone Exchange Privileges.
___ I do NOT want Telephone Redemption Privileges.

D Letter of Intent

I intend to purchase additional shares issued by one or more Viking
Mutual Funds over a 13-month period following my initial purchase
in order to be eligible for a sales charge discount. I agree to the
terms of the Letter of Intent described in the applicable prospectus
and grant Viking Fund Distributors, LLC a security interest in the
shares to be reserved. Although I am not obligated to do so, the
aggregate amount of Viking Mutual Funds shares I intend to purchase
over the 13-month period will be in an aggregate amount at least
equal to
___ $50,000* ___ $100,000 ___ $250,000
___ $500,000 ___ $1,000,000 or more
My account number(s) are:___________________________________
____________________________________________________________
*Not applicable for all funds.

E Cumulative Quantity Discount

I, and certain related parties, own shares of Viking Mutual Funds
listed below and qualify for the discount in sales charges as described
in the prospectus.
My account number(s) are:__________________________________
____________________________________________________________

F Alternate Payee / Mailing Address

Please complete this information if you have requested that certain
distributions or payments be sent to someone other than you and/or
an address different than your address of record.

________________________________________________________
Name
________________________________________________________
Street address
________________________________________________________
City State Zip

G Bank Information

Please provide your bank account information if you have requested
any options for transfers directly to or from your bank account, or if
you may ever want to direct any redemption payments directly to
your bank account.

________________________________________________________
Bank name Account number
________________________________________________________
Street address
________________________________________________________
City State Zip

___ Checking Account ___ Savings Account

IMPORTANT: Please provide a VOIDED check or savings
account deposit slip imprinted with your name and address.

7 SIGNATURE AND TAX CERTIFICATION - ALL REGISTERED OWNERS MUST SIGN
APPLICATION

BY SIGNING BELOW I CERTIFY AND AGREE THAT:

* The information provided on this application is true, correct and
complete.
* I have received and read the prospectus for each Fund selected in Section
3 and agree to the terms of each
* I have full authority and am of legal age (or an emancipated minor) to
buy and sell shares
* The information in Sections 1, 2, 4, 6F, 6G and 7 applies to any new fund
into which my shares may be exchanged.
* I consent to the recording of our telephone conversations when I call
you regarding my shares and account(s).
* If I request transfers to or from my bank account in this application or
at any time, including by telephone, electronically or otherwise, you are
authorized to make those requested transfers (and to make, if necessary,
adjusting transfers if any amounts are transferred in error). If my bank
is not an ACH member bank, you are authorized to make those transfers
by presenting drafts drawn against my bank checking account that you
may sign for me on my behalf. I understand that I can end this
authorization at any time by sending you written notice.
* You are authorized to provide any information about my account(s) to my
dealer or other investment representative.
* I will review all confirmation statements upon receipt at the address of
record, and will notify you immediately if there is a discrepancy.

I understand that mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally insured by the
Federal Depository Insurance Corporation, the Federal Reserve Board, or any
other agency of the U.S. Government, and that an investment in mutual fund
shares involves risks, including the possible loss of principal.

Failure to provide a correct taxpayer identification number with this
or within 60 days if you have applied for a number, will result in backup
withholding. If I am a citizen or resident alien of the U.S., I certify,
under penalty of perjury, that: (1) the Taxpayer Identification
number provided in this application is my correct TIN (or I am waiting for a
TIN to be issued to me) and (2) I am not subject to backup withholding because
(a) I have not been notified that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (b) the IRS has
notified me I am no longer subject to backup withholding. If you are subject
to backup withholdings, please cross out item 2.

If I am a non-resident alien, I certify, under penalty of perjury that I am
not a U.S. citizen or resident (or I am filing for a foreign corporation,
partnership, estate or trust) and I am an exempt foreign person as defined
under IRS regulations.

Check as appropriate:
___ I have already applied for a TIN or intend to apply for one soon.
___ I am an exempt recipient as defined under IRS regulations (e.g.,
corporation; financial institution; registered broker-dealer; tax-exempt,
not-for-profit entity; IRA).

The IRS does not require your consent to any provision of this document other
than the certification required to avoid backup withholding.

X______________________________________________________________________
Signature Date
X______________________________________________________________________
Signature Date
X______________________________________________________________________
Signature Date

VIKING MUTUAL FUNDS

STATEMENT OF ADDITIONAL INFORMATION
August 2, 1999

Viking Tax-Free Fund for Montana
Viking Tax-Free Fund for North Dakota
Viking Large-Cap Value Fund

Viking Mutual Funds
P.O. Box 500
Minot, ND 58702
1-800-933-8413

The Viking Tax-Free Fund for Montana, the Viking Tax-Free Fund for North
Dakota and the Viking Large-Cap Value Fund (each a "Fund") are mutual funds
that offer shares pursuant to a prospectus dated August 2, 1999. This
Statement of Additional Information ("SAI") is not a prospectus. It contains
information in addition to the information in the Funds' prospectus. The
Funds' prospectus, which we may amend from time to time, contains the basic
information you should know before investing in a Fund. You should read this
SAI together with the Funds' prospectus.

For a free copy of the current prospectus contact your investment
representative or call 1-800-933-8413.

Mutual funds:
* are not insured by the FDIC or any other government agency;
* have no bank guarantees;
* may lose value, so an investor may lose money.

TABLE OF CONTENTS

INVESTMENT RESTRICTIONS 1
Tax-Free Fund 1
Large-Cap Fund 2

DESCRIPTION OF INVESTMENT TECHNIQUES AND RISKS 4
Tax-Free Funds 4

TRUESTEES AND OFFICERS 11

MANAGEMENT AND OTHER SERVICES 13

PORTFOLIO TRANSACTIONS 14

DISTRIBUTIONS AND TAXES 17
Tax-Free Funds 17
Large-Cap Fund 18
All Funds 18

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS 20

BUYING AND SELLING SHARES 21

PRICING SHARES 26
The Underwriter 27

PERFORMANCE 29

COMPARISONS 31

DESCRIPTION OF BOND RATINGS 33

INVESTMENT RESTRICTIONS
- -----------------------

The following policies and limitations supplement those set forth in the
prospectus. The Funds have adopted the following restrictions as fundamental
policies. This means that any restriction may be changed only if the change
is approved by (i) more than 50% of a Fund's outstanding shares or (ii) 67% or
more of a Fund's shares present at a shareholder meeting if more than 50% of
the Fund's outstanding shares are represented at the meeting in person or by
proxy, whichever is less.

The Viking Tax-Free Fund for Montana seeks the highest level of current
income that is exempt from federal and Montana personal income taxes and is
consistent with the preservation of capital. The Fund's investment objective
is fundamental. In addition, the Fund has a fundamental policy pursuant to
which it invests at least 80% of its total assets in municipal securities that
pay interest free from federal income taxes, including the federal alternative
minimum tax.

The Viking Tax-Free Fund for North Dakota seeks the highest level of
current income that is exempt from federal and North Dakota personal income
taxes and is consistent with the preservation of capital. The Fund's
investment objective is fundamental. In addition, the Fund has a fundamental
policy pursuant to which it invests at least 80% of its total assets in
municipal securities that pay interest free from federal income taxes,
including the federal alternative minimum tax.

The following restrictions apply to the Viking Tax-Free Fund for Montana and
the Viking Tax-Free Fund for North Dakota (each a "Tax-Free Fund").

A TAX-FREE FUND MAY NOT:

1. Issue any senior securities, borrow money or mortgage or pledge any of
the assets of a Fund, except that borrowings for temporary or emergency
purposes may be made in an amount up to 5% of total assets.

2. Buy any securities on "margin" or sell any securities "short."

3. Make loans, except by purchase of debt obligations in which such Fund may
invest consistent with its investment policies.

4. Underwrite securities issued by other persons except insofar as a Fund may
be technically deemed an underwriter under the federal securities laws in
connection with the disposition of portfolio securities.

B-1

5. Purchase the securities of any issuer which would result in a Fund owning
more than 10% of the outstanding voting securities of an issuer.

6. Purchase or sell real estate, although it may purchase securities which are
secured by or represent interests in real estate.

7. Purchase or sell commodities or commodity contracts, financial future
contracts, puts, calls, straddles, spreads or any combination thereof or
derivative securities of any kind, or interests in oil, gas or other mineral
exploration or development programs.

8. Invest in companies for the purpose of exercising control or management.

9. Purchase any security if thereafter 25% or more of the total assets of a
Fund would be invested in securities of issuers having their principal
business activities in the same industry; this restriction does not apply to
securities issued or guaranteed by the U.S. Government, its agencies,
authorities, or instrumentalities, or to tax-exempt obligations issued or
guaranteed by a U.S. territory or possession or a state or local government,
or a political subdivision of any of the foregoing.

10. Invest more than 5% of its total assets in securities of any single
investment company, nor more than 10% of its total assets in securities of two
or more investment companies, except as part of a merger, consolidation or
acquisition of assets or invest in securities of any single investment company
if as a result of such investment, a Fund owns more than 3% of the total
voting stock of such investment company.

11. Invest in foreign securities.

The Viking Large-Cap Value Fund seeks long-term total return and capital
preservation. The Fund's investment objective is fundamental.

The following restrictions apply to the Viking Large-Cap Value Fund ("Large-
Cap Fund").

THE LARGE-CAP FUND MAY NOT:

1. Issue any senior securities, borrow money or mortgage or pledge any of
the assets of the Fund, except that borrowings for temporary or emergency
purposes may be made in an amount up to 5% of total assets.

2. Buy any securities on "margin" or sell any securities "short."

3. Make loans, except by purchase of debt obligations in which the Fund may
invest consistent with its investment policies.

B-2

4. Underwrite securities issued by other persons except insofar as the Fund
may be technically deemed an underwriter under the federal securities laws in
connection with the disposition of portfolio securities.

5. Invest more than 5% of the value of the total assets of the Fund in the
securities of any one issuer, but this limitation does not apply to
investments in securities issued or guaranteed by the U.S. government, its
agencies, authorities or instrumentalities.

6. Purchase the securities of any issuer which would result in the Fund owning
more than 10% of the outstanding voting securities of an issuer.

7. Purchase or sell real estate, although it may purchase securities which are
secured by or represent interests in real estate.

8. Purchase any securities issued by a corporation which has not been in
continuous operation for three years, but such period may include the
operation of a predecessor.

9. Purchase or sell commodities or commodity contracts, financial future
contracts, puts, calls, straddles, spreads or any combination thereof or
derivative securities of any kind, or interests in oil, gas or other mineral
exploration or development programs.

10. Invest in companies for the purpose of exercising control or management.

11. Purchase any security if thereafter 25% or more of the total assets of the
Fund would be invested in securities of issuers having their principal
business activities in the same industry; this restriction does not apply to
securities issued or guaranteed by the U.S. Government, its agencies,
authorities, or instrumentalities.

12. Invest more than 5% of its total assets in securities of any single
investment company, nor more than 10% of its total assets in securities of two
or more investment companies, except as part of a merger, consolidation or
acquisition of assets or invest in securities of any single investment company
if as a result of such investment, the Fund owns more than 3% of the total
voting stock of such investment company.

13. Invest in foreign securities, provided that this limitation shall not
apply to foreign securities denominated in U.S. dollars, including American
DepositaryReceipts ("ADRs").

Each Fund has a non-fundamental policy restricting its investment in
illiquid securities to 15% of net assets. Illiquid securities include
securities that cannot be sold within seven days in the ordinary course of
business for approximately the amount at which a Fund has valued the
securities.

If a bankruptcy or other extraordinary event occurs concerning a particular
security a Fund owns, the Fund may receive stock, real estate, or other
investments that the Fund would not, or could not, buy. If this happens, the

B-3

Fund intends to sell such investments as soon as practicable while maximizing
the return to shareholders.

Excluding the Funds' restrictions regarding borrowing and illiquid
securities, any investment restriction or limitation which involves a maximum
percentage of securities or assets shall not be considered to be violated
unless an excess over the percentage occurs immediately after an acquisition
of securities and such excess results therefrom. If events subsequent to a
transaction result in a Fund exceeding the percentage limitation on borrowing
or illiquid securities, the investment manager will take appropriate steps to
reduce the percentage of borrowings or the percentage held in illiquid
securities, as may be required by law, within a reasonable amount of time.

DESCRIPTION OF INVESTMENT TECHNIQUES AND RISKS
- ----------------------------------------------

The following is a description of the various types of securities the Tax-Free
Funds may buy and the accompanying risks.

Municipal Bonds meet longer-term capital needs and generally have maturities
from one to 30 years when issued. They have two principal classifications:
general obligation bonds and revenue bonds.

General Obligation Bonds. Issuers of general obligation bonds include states,
counties, cities, towns and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads. The basic security
behind general obligation bonds is the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. The taxes
that can be levied for the payment of debt service may be limited or unlimited
as to the rate or amount of special assessments.

Revenue Bonds. The full faith, credit and taxing power of the issuer do not
secure revenue bonds. Instead, the principal security for a revenue bond is
generally the net revenue derived from a particular facility, group of
facilities, or, in some cases, the proceeds of a special excise tax or other
specific revenue source. Revenue bonds are issued to finance a wide variety of
capital projects, including: electric, gas, water and sewer systems; highways,
bridges and tunnels; port and airport facilities; colleges and universities;
and hospitals. The principal security behind these bonds may vary. For
example, housing finance authorities have a wide range of security, including
partially or fully insured mortgages, rent subsidized and/or collateralized
mortgages, and/or the net revenues from housing or other public projects. Many
bonds provide additional security in the form of a debt service reserve fund
that may be used to make principal and interest payments. Some authorities
have further security in the form of state assurances (although without
obligation) to make up deficiencies in the debt service reserve fund.

All of the municipal securities in which the Funds invest are rated, at the
time of purchase, within the four highest ratings by a nationally recognized
statistical rating service such as Standard and Poor's Corporation ("S & P"),

B-4

Moody's Investors Service ("Moody's") or Fitch Investors Service ("Fitch") or
are of comparable quality as determined by the investment manager.

Ratings of municipal bonds represent the opinions of the rating services
with respect to the securities and are not absolute standards of quality.
Please see "Description of Bond Ratings" for a discussion of the ratings.

With respect to unrated securities, it is also the Funds' intent to buy
securities that, in the view of the investment manager, would be comparable in
quality to the Funds' rated securities and have been determined to be
consistent with the Funds' objectives without exposing the Funds to excessive
risk. The Funds will not buy issues that are in default or that the investment
manager believes involve excessive risk.

Tax-exempt industrial development revenue bonds. The Funds may invest in
industrial development revenue bonds the interest on which is exempt from
federal income tax in the opinion of the bond issuer's counsel. Tax-exempt
industrial development revenue bonds are issued by or on behalf of public
authorities to finance various privately operated facilities for business,
manufacturing, housing, sports and pollution control, as well as public
facilities such as airports, mass transit systems, ports and parking. The
payment of principal and interest is solely dependent on the ability of the
facility's user to meet its financial obligations and the pledge, if any, of
the facility or other property as security for payment.

Municipal Lease Obligations. The Funds may invest in municipal lease
obligations, including certificates of participation. Since annual
appropriations are required to make lease payments, municipal lease
obligations generally are not subject to constitutional limitations on the
issuance of debt and may allow an issuer to increase government liabilities
beyond constitutional debt limits. When faced with increasingly tight budgets,
local governments have more discretion to curtail lease payments under a
municipal lease obligation than they do to curtail payments on other municipal
securities. If not enough money is appropriated to make the lease payments,
the leased property may be repossessed as security for holders of the
municipal lease obligations. If this happens, there is no assurance that the
property's private sector or re-leasing value will be enough to make all
outstanding payments on the municipal lease obligations or that the payments
will continue to be tax-free. While cancellation risk is inherent to municipal
lease obligations, the investment manager believes that this risk may be
reduced, although not eliminated, by the Funds' policies on the quality of
securities in which they may invest.

Zero-coupon securities. The Funds may invest in zero-coupon and delayed
interest securities. Zero-coupon securities make no periodic interest
payments, but are sold at a deep discount from their face value. The buyer
recognizes a rate of return determined by the gradual appreciation of the
security, which is redeemed at face value on a specified maturity date. The
discount varies depending on the time remaining until maturity, as well as
market interest rates, liquidity of the security, and the issuer's perceived
credit quality. The discount, in the absence of financial difficulties of the

B-5

issuer, typically decreases as the final maturity date approaches. If the
issuer defaults, a Fund may not receive any return on its investment.

Because zero-coupon securities bear no interest, their value is generally more
volatile than the value of other fixed-income securities. Since zero-coupon
bondholders do not receive interest payments, zero-coupon securities fall more
drastically than bonds paying interest on a current basis when interest rates
rise. When interest rates fall, zero-coupon securities rise more rapidly in
value, because the bonds reflect a fixed rate of return.

An investment in zero-coupon and delayed interest securities may cause a Fund
to recognize income and make distributions to shareholders before it receives
any cash payments on its investments. To generate cash to satisfy
distribution requirements, a Fund may have to sell portfolio securities that
it otherwise would have continued to hold or to use cash flows from other
sources such as the sale of Fund shares.

Callable bonds. Each Fund may invest in callable bonds, which allow the
issuer to repay some or all of the bonds ahead of schedule. If a bond is
called, the Fund will receive the principal amount, the accrued interest, and
a small additional payment as a call premium. The Fund may sell a callable
bond before its call date, if it believes the bond is at its maximum premium
potential. An issuer is more likely to call its bonds when interest rates are
falling, because the issuer can issue new bonds with lower interest payments.
If a bond is called, the Fund may have to replace it with a lower-yielding
security. If the Fund originally paid a premium for the bond because it had
appreciated in value from its original issue price, the Fund also may not be
able to recover the full amount it paid for the bond. One way for the Fund to
protect itself from call risk is to buy bonds with call protection. Call
protection is an assurance that the bond will not be called for a specific
time period, typically five to 10 years from when the bond is issued. In
light of the Funds' pricing policies and certain amortization procedures
required by the IRS, the Funds do not expect to suffer any material adverse
impact related to the value at which they carry bonds in connection with calls
of bonds purchased at a premium. As with any investment strategy, however,
there is no guarantee that a call may not have a more substantial impact than
anticipated.

Escrow-secured or defeased bonds are created when an issuer refunds, before
maturity, an outstanding bond issue that is not immediately callable (or pre-
refunds), and sets aside funds for redemption of the bonds at a future date.
The issuer uses the proceeds from a new bond issue to buy high grade, interest
bearing debt securities, generally direct obligations of the U.S. government.
These securities are then deposited in an irrevocable escrow account held by a
trustee bank to secure all future payments of principal and interest on the
pre-refunded bond. Escrow-secured bonds often receive a triple A or equivalent
rating from Moody's, S & P, or Fitch.

When-issued securities. Municipal securities are frequently offered on a
"when-issued" basis. When so offered, the price, which is generally expressed
in yield terms, is fixed at the time the commitment to buy is made, but
delivery and payment take place at a later date. During the time between

B-6

purchase and settlement, no payment is made by the Funds to the issuer and no
interest accrues to the Funds. If the other party to the transaction fails to
deliver the security, the Funds could miss a favorable price or yield
opportunity, or could experience a loss.

When a Fund makes the commitment to buy a municipal security on a when-issued
basis, it records the transaction and reflects the value of the security in
the determination of its Net Asset Value. The Funds believe that their Net
Asset Values or income will not be negatively affected by the purchase of
municipal securities on a when-issued basis. The Funds will not engage in
when-issued transactions for investment leverage purposes.

Although the Funds will generally buy municipal securities on a when-issued
basis with the intention of acquiring the securities, they may sell the
securities before the settlement date if it is considered advisable. When a
Fund is the buyer, it will maintain cash or securities, with an aggregate
value equal to the amount of its purchase commitments, in a segregated account
with its custodian bank until payment is made. If assets of the Funds are held
in cash pending the settlement of a purchase of securities, the Funds will not
earn income on those assets.

Municipal market disruption risk. The value of municipal securities may be
affected by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Proposals to
restrict or eliminate the federal income tax exemption for interest on
municipal securities are introduced before Congress from time to time.
Proposals also may be introduced before the state legislatures that would
affect the state tax treatment of a municipal fund's distributions. If such
proposals were enacted, the availability of municipal securities and the value
of a municipal fund's holdings would be affected and the Trustees would
reevaluate the Funds' investment objectives and policies. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain untested.
Further, the application of state law to municipal issuers could produce
varying results among the states or among municipal securities issuers within
a state. These legal uncertainties could affect the municipal securities
market generally, certain specific segments of the market, or the relative
credit quality of particular securities. Any of these effects could have a
significant impact on the prices of some or all of the municipal securities
held by a Fund.

U.S. Government obligations are issued by the U.S. Treasury or by agencies
and instrumentalities of the U.S. Government and are backed by the full faith
and credit of the U.S. government. They include Treasury bills, notes and
bonds.

Other investment companies. The Funds may invest in the shares of other
investment companies. Such investments may be the most practical manner in
which the Funds can invest in certain securities because those securities
themselves may not be available at the time a Fund is ready to make an
investment.

As a shareholder in an investment company, a Fund would bear its pro rata
share of that investment company's expenses. Each Fund's investment in such

B-7

securities is limited to (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Fund's total assets with respect to any one
investment company and (iii) 10% of the Fund's total assets in the aggregate.

Temporary investments. During the period of the Funds' initial operations,
which is expected not to exceed six months, or during unusual market or other
conditions, each Fund may temporarily depart from its investment objective and
invest up to 100% of its assets in short-term U.S. Government obligations,
cash and cash equivalents. These short-term investments may be taxable.

Single state considerations. Because each of the Tax-Free Funds focuses its
investments in the municipal securities of a single state, changes in
economic, political or regulatory occurrences in the state could adversely
affect the state's municipal bond issues and will have a greater impact on
investment returns than would be the case for a municipal securities fund
investing nationally. The following discussion of the states' economies was
obtained from official offering statements of bond issues and has not been
independently verified by the Funds.

Montana general economic conditions. Montana has seen strong growth in
population and employment throughout the 1990's, but currently exhibits a
trend of slowing growth in employment and personal income. Tourism and home
construction continue to be particularly positive sectors, offsetting the
effects of reduced timber supplies and weak market prices on the state's large
wood products industry. Recently, the agricultural sector has also weakened
significantly due to reduced Asian demand and low prices, particularly for
livestock and wheat. Despite these developments, overall employment growth
remains positive, and the state's seasonally-adjusted unemployment rate as of
August 1998 was a relatively low 5.0% (down from 5.4% in August 1997).
However, the economy remains fundamentally resource-dependent and thus exposed
to potentially volatile commodity prices and demand in the wood products,
agricultural, energy and non-fuel mining sectors.

The general obligation bond rating outlook is stable, reflecting the state's
conservative financial operations and low debt levels, which mitigate the
risks stemming from a resource-dependent and thus potentially volatile
economy.

North Dakota general economic conditions. The economy in North Dakota has
begun to lag behind the national pace. While the rate of annual employment
growth from 1992-1997, at 2.5% was equal to the national rate of growth, in
the year ending September 1998 it was 1.9%, below the national rate of 2.4%.
This growth was primarily in the construction and finance-related sectors.
Unemployment fell to 2.5% in September, when the national rate was 4.5%.
Growth in the labor force was negative during 1998. A shrinking labor market,
consistently negative annual net migration and a population decline in 1997
after six years of slow population growth, a slow job growth rate, and very
low unemployment may lead to arrested job growth in the near future.

B-8

While per capita personal income increased sharply by 10.6% in 1996, greater
than twice the 4.6% rate of increase for the nation, it declined in 1997 by
1.3% and at 79.9% of the national average it remains low.

North Dakota has a historically limited economy heavily dependent on
agriculture and mining. The global economic crisis has lead to decreasing
demand for exports of food products, and price decreases hinder growth in the
manufacturing and trade industries which rely on the agricultural industry in
North Dakota. This has occurred in spite of NAFTA and GATT trade agreements
which had initially increased the demand for North Dakota's agricultural
products in the export market. As the Asian crisis continues, the
agricultural economy will continue to feel pressure. Further risk to this
sector is posed by the non-subsidized environment on the horizon, as federal
subsidies for agriculture end in 2002. To this end, farmers are attempting to
convert from the traditional heavy dependence on wheat, which in the past had
enjoyed generous federal subsidies, to other crops.

The credit outlook for North Dakota is stable. Extremely low debt levels due
to conservative fiscal policies along with a strong financial position will
help the state meet the challenges posed by an agriculturally based economy
facing decreasing demand and falling prices, and poor population trends and a
shrinking labor force which could hinder future employment growth.

The following is a description of the various types of securities the
Large-Cap Fund may buy and the accompanying risks.

Equity securities. Equity securities generally entitle the holder to
participate in a company's general operating results. The purchaser of an
equity security typically receives an ownership interest in the company as
well as certain voting rights. The owner of an equity security may
participate in a company's success through the receipt of dividends, which are
distributions of earnings by the company to its owners. Equity security
owners may also participate in a company's success or lack of success through
increases or decreases in the value of the company's shares as traded in the
public trading market for such shares. Equity securities generally take the
form of common stock or preferred stock, as well as securities convertible
into common stocks. Preferred stockholders typically receive greater
dividends but may receive less appreciation than common stockholders and may
have greater voting rights as well. Equity securities may also include
convertible securities, warrants, or rights. Warrants or rights give the
holder the right to buy a common stock at a given time for a specified price.

Convertible securities. A convertible security is generally a debt obligation
or preferred stock that may be converted within a specified period of time
into a certain amount of common stock of the same or a different issuer. A
convertible security provides a fixed-income stream and the opportunity,
through its conversion feature, to participate in the capital appreciation
resulting from a market price advance in its underlying common stock. As with
a straight fixed-income security, a convertible security tends to increase in
market value when interest rates decline and decrease in value when interest
rates rise. Like a common stock, the value of a convertible security also
tends to increase as the market value of the underlying stock rises, and it
tends to decrease as the market value of the underlying stock declines.

B-9

Because its value can be influenced by both interest rates and market
movements, a convertible security is not as sensitive to interest rates as a
similar fixed-income security, nor is it as sensitive to changes in share
price as its underlying stock.

A convertible security is usually issued either by an operating company or
by an investment bank. When issued by an operating company, a convertible
security tends to be senior to common stock, but subordinate to other types of
fixed-income securities issued by that company. If the convertible security
is issued by an investment bank, the security is an obligation of and is
convertible through the issuing investment bank.

The issuer of a convertible security may be important in determining the
security's true value. This is because the holder of a convertible security
will have recourse only to the issuer. In addition, a convertible security may
be subject to redemption by the issuer, but only after a specified date and
under circumstances established at the time the security is issued.

While the Fund uses the same criteria to rate a convertible debt security that
it uses to rate a more conventional debt security, a convertible preferred
stock is treated like a preferred stock for the Fund's financial reporting,
credit rating, and investment limitation purposes. A preferred stock is
subordinated to all debt obligations in the event of insolvency, and an
issuer's failure to make a dividend payment is generally not an event of
default entitling the preferred shareholder to take action. A preferred stock
generally has no maturity date, so that its market value is dependent on the
issuer's business prospects for an indefinite period of time. In addition,
distributions from preferred stock are dividends, rather than interest
payments, and are usually treated as such for corporate tax purposes.

American DepositaryReceipts. The Fund may invest up to 20% of its total
assets in sponsored ADRs. ADRs are typically issued by a U.S. bank or trust
company and evidence ownership of underlying securities issued by a foreign
corporation. Most ADRs are denominated in U.S. dollars and are traded on a
U.S. stock exchange. Issuers of the securities underlying sponsored ADRs are
contractually obligated to disclose material information in the United States.

While these investments in U.S. dollar-denominated securities of foreign
issuers are intended to reduce risk by providing further diversification, such
investments involve sovereign and other risks, in addition to the credit and
market risks normally associated with domestic securities. These additional
risks include the possibility of adverse political and economic developments
(including political instability, nationalization, expropriation, or
confiscatory taxation) and the potentially adverse effects of unavailability of
public information regarding issuers, less governmental supervision and
regulation of financial markets, reduced liquidity of certain financial
markets, and the lack of uniform accounting, auditing, and financial reporting
standards or the application of standards that are different or less stringent
than those applied in the United States.

B-10

Other investment companies. The Fund may invest in the shares of other
investment companies. As a shareholder in an investment company, the Fund
would bear its pro rata share of that investment company's expenses. The
Fund's investment in such securities is limited to (i) 3% of the total voting
stock of any one investment company, (ii) 5% of the Fund's total assets with
respect to any one investment company and (iii) 10% of the Fund's total assets
in the aggregate.

Temporary investments. During the period of the Fund's initial operations,
which is expected not to exceed six months, or during unusual market or other
conditions, the Fund may temporarily depart from its investment objective and
invest up to 100% of its assets in short-term U.S. Government obligations,
cash and cash equivalents.

TRUSTEES AND OFFICERS
- ---------------------

The Funds have a Board of Trustees ("Board"). The Board is responsible for
the overall management of the Funds, including general supervision and review
of each Fund's investment activities. The Board, in turn, elects the officers
of the Funds who are responsible for administering each Fund's day-to-day
operations.

The affiliations of the officers and Board members and their principal
occupations for the past five years are shown below.

<TABLE>
<CAPTION>
Positions and Offices
Name, Age and Address with the Fund Principal Occupation During the Past Five Years
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shirley R. Martz (75) Trustee Retired C.P.A.; Principal shareholder and
1451 15th St. SW Employee of Brady, Martz & Associates and
Minot, ND 58701 its predecessor (1948-1989).

Mike Timm (62) Trustee President and General Manager, Timm Moving and
1800 2nd St. S.E. Storage (1959 - present); State Representative,
Minot, ND 58701 North Dakota House of Representatives
(1973 - present); Speaker of the North Dakota
House of Representatives (1997).

Bruce C. Adams (53) Trustee Retired farmer (1997 - present); Director,
2510 Bel Air Court Garrison Diversion Conservancy District
Minot, ND 58703 (1995-present);Small grain Farmer (1971-1997);
Director, Federal Reserve Bank of Minneapolis
(1988-1992); Chairman, Advisory Council to
Federal Reserve Bank of Minneapolis Board of
Directors (1988-1992).

B-11
*Shannon D. Radke (32) President, Treasurer President, Viking Fund Management, LLC (1998-
1400 14th Ave. SW and Trustee present); President, Viking Fund Distributors,
Minot, ND 58701 LLC (1999-present); Chief Operating Officer, ND
Holdings, Inc. (1997-1998); Operations Manager,
ND Holdings, Inc. (1993-1997).

*Douglas P. Miller (25) Vice President, Secretary Secretary and Treasurer, Viking Fund
902 2nd St. NE and Trustee Management, LLC (1998- present); Secretary and
Minot, ND 58703 Treasurer, Viking Fund Distributors, LLC (1999-
present); Controller, ND Holdings, Inc.(1998);
Fund Accountant, ND Holdings, Inc. (1996-1998);
Staff Accountant, Service Corporation
International (1995-1996), BS Accounting, Minot
State University (1995).
</TABLE>

*Indicates the Board member is considered an "interested person" under federal
securities laws. Messrs. Radke and Miller are interested persons by virtue of
the fact that they are officers of Viking Fund Management, LLC
("Viking Management").

The following table sets forth information concerning the compensation of the
trustees of each Trust. The Funds do not have any retirement plans for their
trustees.

Name and Position with the Trust Aggregate Compensation from the Trust*
- ------------------------------- -------------------------------------
Shirley R. Martz $750
Trustee

Mike Timm $750
Trustee
Bruce C. Adams $750
Trustee
Shannon D. Radke $0
President, Treasurer and Trustee
Douglas P. Miller $0
Vice President, Secretary and Trustee

B-12

* Estimated for the period of 8/2/99 to 12/31/99 (commencement of operations
until the end of the first fiscal year). The estimate represents the total
compensation paid to trustees by all of the Funds in the Viking Fund
complex.

MANAGEMENT AND OTHER SERVICES
- -----------------------------

The Funds have retained Viking Management to provide the Funds with
investment advice and portfolio management. Mr. Shannon D. Radke is a Governor
and President of Viking Management. Mr. Radke holds a Bachelor of Business
Administration degree in Banking and Finance from the University of North
Dakota. He has been engaged in the securities business since 1988 as a broker
and as operations manager and later as chief operating officer of an unrelated
investment advisory firm. Mr. Radke was a founder of Viking Management in
September 1998 and is responsible for managing the Tax-Free Funds' portfolios
on a day-to-day basis. As compensation for the advisory services furnished to
the Funds, the Funds pay Viking Management monthly compensation calculated
daily by applying the annual rates of 0.50% to the Tax-Free Funds' daily net
assets and 0.70% to the Large-Cap Fund's daily net assets.

Under a sub-advisory agreement between Fox Asset Management (the "sub-
adviser") and Viking Management, the sub-adviser provides the Large-Cap Fund
with investment advice and portfolio management subject to the overall
supervision of Viking Management. The sub-adviser, located at 44 Sycamore
Avenue, Little Silver, New Jersey 07739, as of April 30, 1999, managed assets
of approximately $ 2.0 billion for employee benefit plans, endowments,
foundations and other institutional investors. The sub-adviser provides its
services under a multiple-manager, investment committee system ("investment
committee"). The investment committee currently consists of five senior
portfolio managers with combined securities industry experience of 103 years.
Mr. J. Peter Skirkanich is a graduate of the Wharton School, University of
Pennsylvania. He is President and Chief Investment Officer of the sub-adviser.
Mr. Skirkanich has been engaged in the securities business since 1973 as an
analyst and money manager. Mr. Skirkanich founded the firm in 1985 and serves
as the investment committee Chairman. As compensation for its services provided
to the Large-Cap Fund, the investment manager pays the sub-adviser monthly
compensation calculated daily by applying the annual rate of 0.40% to the
Fund's daily net assets of up to $100 million and 0.35% to the Fund's daily net
assets in excess of $100 million. The investment manager has also entered into
a separate sub-advisory agreement with the sub-adviser which provides that the
investment manager may delegate to the sub-adviser certain investment advisory
responsibilities for the Tax-Free Funds for a fee, payable by the investment
manager, at an annual rate of 0.20% of the daily net assets of these Funds.
However, the investment manager does not currently intend to utilize the sub-
adviser's services with regard to the Tax-Free Funds. As of the date this
prospectus was written, the investment manager had not previously managed
portfolio assets.

B-13

As described in the Funds' prospectus, Viking Management has contractually
agreed to waive its fees or reimburse each Fund for its expenses through August
1, 2009, so that the Tax-Free Funds' total annual operating expenses during
this period will not exceed 0.85% of their average daily net assets on an
annual basis, and the Large-Cap Fund's total annual operating expenses during
this period will not exceed 1.35% of its average daily net assets on an annual
basis. These contractual waivers may not be altered by the investment manager
during the stated period.

The Funds have also entered into an agreement with Viking Management to
provide administrative services, portfolio accounting and transfer agent
services to each of the Funds for a fee at an annual rate of 0.15% of daily net
assets, plus a per account charge and reimbursement of certain direct
expenses.

Custodian. First International Bank and Trust, 3001 25th Street, South,
Fargo, North Dakota 58103, serves as custodian of the securities and other
assets of the Funds.

Auditor. Brady, Martz & Associates, P.C., 207 East Broadway, Suite 200,
Bismarck, ND 58501, serves as each Fund's independent auditor.

PORTFOLIO TRANSACTIONS
- ----------------------

Viking Management and the sub-adviser (pursuant to authorization in its sub-
advisory agreement with Viking Management) place orders for the purchase and
sale of portfolio securities on behalf of the Funds, and will do so in
accordance with the policies described below.

For transactions in fixed-income securities, purchases and sales of portfolio
securities generally are transacted with issuers, underwriters, or dealers that
serve as primary market-makers, who act as principals for the securities on a
net basis. The Funds typically do not pay brokerage commissions for such
purchases and sales. Instead, the price paid for newly issued securities
usually includes a concession or discount paid by the issuer to the
underwriter, and the prices quoted by market-makers reflect a spread between
the bid and the asked prices from which the dealer derives a profit. In
effecting securities transactions, each Fund seeks to obtain the best price and
execution of orders. For transactions in fixed-income securities, selection of
broker-dealers is generally based on the availability of a security and its
price and on the overall quality of execution provided by the broker-dealer.

In purchasing and selling portfolio securities other than as described above
(for example, in the secondary market), each Fund seeks to obtain best
execution at the most favorable prices through responsible broker-dealers and,
in the case of agency transactions, at competitive commission rates. In
selecting broker-dealers to execute transactions, Viking Management and the
sub-adviser consider such factors as the price of the security, the rate of
commission, the size and difficulty of the order, and the reliability,
integrity, financial condition, and general execution and operational
capabilities of competing broker-dealers. In agency transactions, Viking
Management and the sub-adviser also may consider the brokerage and research
services that broker-dealers provide to the Funds or Viking Management.

B-14

Each Fund may execute agency portfolio transactions with broker-dealers who
provide research and execution services to the Fund or other investment
accounts over which Viking Management or the sub-adviser exercises investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or sellers of
securities. In addition, such broker-dealers may furnish analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and performance of investment accounts; and effect
securities transactions and perform functions incidental thereto (such as
clearance and settlement).

Subject to applicable limitations of the federal securities laws, the Funds may
pay a broker-dealer commissions for agency transactions that are in excess of
the amount of commissions charged by other broker-dealers in recognition of
their research and execution services. In order to cause the Funds to pay such
higher commissions, Viking Management or the sub-adviser must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers. In
reaching this determination, they will not attempt to place a specific dollar
value on the brokerage and research services provided, or to determine what
portion of the compensation should be related to those services.

No Fund effects transactions with or through broker-dealers in accordance with
any formula or for selling shares of a Fund. However, broker-dealers who
effect or execute portfolio transactions may from time to time effect purchases
of Fund shares for their customers. To the extent permitted by applicable law,
Viking Management and the sub-adviser are authorized to allocate portfolio
transactions in a manner that takes into account assistance received in the
distribution of shares of the Funds or other Viking Funds and to use the
research services of brokerage and other firms that have provided such
assistance.

Viking Management and the sub-adviser may allocate brokerage transactions to
broker-dealers who have entered into arrangements with Viking Management under
which the broker-dealer allocates a portion of the commissions paid by a Fund
toward the reduction of that Fund's expenses. The transaction quality must,
however, be comparable to those of other qualified broker-dealers.

The Board periodically reviews Viking Management and the sub-adviser to assess
each entity's performance of its responsibilities in connection with the
placement of portfolio transactions on behalf of each Fund and reviews the
commissions paid by the Fund over representative periods of time to determine
if they are reasonable in relation to the benefits to the Fund.

Investment decisions for each Fund are made independently from those of other
Funds managed by Viking Management and the sub-adviser. It sometimes happens
that the same security is held in the portfolio of more than one of these funds
or investment accounts. Simultaneous transactions are inevitable when several
funds and investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment objective of
more than one fund or investment account.

B-15

When two or more Funds or accounts are simultaneously engaged in the purchase
or sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable for each
Fund or account. In some cases this system could have a detrimental effect on
the price or value of the security as far as each Fund is concerned. In other
cases, however, the ability of the Funds to participate in volume transactions
will produce better executions and prices for the Funds. It is the current
opinion of the Trustees that the desirability of retaining Viking Management
and the sub-adviser as investment adviser and sub-adviser to the Funds
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

B-16

DISTRIBUTIONS AND TAXES
- -----------------------

Tax-Free Funds

Distributions of net investment income. By meeting certain requirements of the
Internal Revenue Code (the "Code"), each Fund intends to qualify to pay
"exempt-interest dividends" to shareholders. These dividends are derived from
interest income exempt from federal income tax, and they are not subject to
federal income tax when they are distributed. In addition, to the extent that
exempt-interest dividends are derived from interest on obligations of a state
or its political subdivisions, or from interest on qualifying U.S. territorial
obligations (including qualifying obligations of Puerto Rico, the U.S. Virgin
Islands or Guam), they will also be exempt from that state's personal income
taxes. A state generally does not grant tax-free treatment to interest on state
and municipal securities of other states.

At the end of each calendar year, each Fund will provide you with the
percentage of any dividends paid that qualify for tax-free treatment on your
personal income tax return. You should consult with your personal tax adviser
to determine the application of your state and local laws to these
distributions. Corporate shareholders should consult with their corporate tax
advisers about whether any of their distributions may be exempt from corporate
income or franchise taxes.

Each Fund may earn taxable income on any temporary investments, on the excess
of short-term capital gains over long-term capital losses ("net short-term
capital gain"), or on ordinary income derived from the sale of market discount
bonds. Any distributions by a Fund from that income will be taxable to you as
ordinary income, whether you take them in cash or additional shares.

From time to time, a Fund may buy a tax-exempt bond in the secondary market for
a price that is less than the principal amount of the bond. This discount is
called market discount if it exceeds a de minimis amount specified in the Code.
A portion of the gain on sale or disposition of market discount bonds (not
exceeding the accrued portion of market discount at the time of the sale) is
treated as ordinary income rather than capital gain. Any distribution by a Fund
of this income will be taxable as ordinary income to you. The amount of market
discount, if any, is expected to be small.

Dividends-received deduction for corporations. Because each Tax-Free Fund's
income is derived from interest rather than dividends, no portion of its
distributions will be eligible for the corporate dividends-received deduction.

Treatment of private activity bond interest. Interest on certain non-
essential or "private activity bonds" issued after August 7, 1986, while exempt
from federal income tax, constitutes a preference item for taxpayers in
determining their alternative minimum tax under the Code and under the income
tax provisions of several states. Private activity bond interest could subject
you to or increase your liability for those taxes, depending on your individual
or corporate tax position. Consistent with the Tax-Free Funds' investment

B-17

goals, each Fund may invest up to 20% of its total assets in private activity
bonds if, in the investment manager's opinion, those bonds represent the most
attractive investment opportunity then available to the Fund. Persons who are
"substantial users" as defined in the Code, or persons related to such users,
of facilities financed by private activity bonds should consult with their tax
advisers before buying shares in a Fund.

The Code also imposes certain limitations and restrictions on the use of tax-
exempt bond financing for non-governmental business activities, including
activities financed by certain industrial development or private activity
bonds. Some of these bonds, including bonds for sports arenas, parking
facilities, and pollution control facilities, do not pay tax-exempt interest.

Investments in original issue discount (OID) bonds. To the extent a Fund
invests in zero coupon municipal bonds or other bonds issued at a discount
(ie., with OID), the Fund may have to take into account each year a portion of
the OID and distribute that income to maintain its qualification as a regulated
investment company. A Fund may have to make these distributions to you prior
to its receipt of cash payments.

Defaulted obligations. A Fund may be required to accrue income on defaulted
obligations and to distribute that income to you even though it is not
currently receiving interest or principal payments on those obligations. To
generate cash to satisfy this distribution requirement, the Fund may be
required to sell portfolio securities that it otherwise would have continued to
hold or to use cash flows from other sources such as the sale of Fund shares.

Large-Cap Fund

Distributions of net investment income. The Fund receives income generally in
the form of dividends and interest on its investments. This income, less
expenses incurred in the Fund's operation, constitutes its net investment
income from which dividends may be paid to you. Any distributions by the Fund
from that income will be taxable to you as ordinary income, whether you take
them in cash or in additional shares.

Dividends-received deduction for corporations. In some circumstances, a
corporate shareholder will be allowed to deduct a portion of Fund dividends,
thereby reducing the tax that it would otherwise be required to pay on these
dividends. The dividends-received deduction will be available only with
respect to dividends designated by the Fund as eligible for that treatment.
All dividends (including the deducted portion) must be included in a
corporation's alternative minimum taxable income calculation.

All Funds

Distributions of capital gains. The Funds may derive capital gains and losses
in connection with sales or other dispositions of their portfolio securities.
Distributions from net short-term capital gains will be taxable to you as
ordinary income. Distributions from net long-term capital gains will be

B-18

taxable to you as long-term capital gain, regardless of how long you have held
your shares in a Fund. Any net capital gains realized by a Fund generally will
be distributed once each year, and may be distributed more frequently, if
necessary, to reduce or eliminate excise or income taxes on the Fund.

Certain distributions paid in January. Distributions by a Fund that are
declared in October, November or December to shareholders of record in such a
month, and paid in January of the following year will be treated for tax
purposes as if they had been received by you on December 31 of the year in
which they were declared.

Information on the tax character of distributions. The Funds will inform you
of the amount of your dividends and capital gain distributions at the times
they are paid and will advise you of their tax status for federal income tax
purposes shortly after the close of each calendar year. If you have not held
Fund shares for a full year, a Fund may designate and distribute to you, as
ordinary income or capital gain, a percentage of income that is not equal to
the actual amount of such income earned during the period of your investment in
a Fund.

Election to be taxed as a regulated investment company. Each Fund has elected
to be treated as a regulated investment company under Subchapter M of the Code
and intends to so qualify for that treatment during the current fiscal year.
As regulated investment companies, the Funds generally pay no federal income
tax on the income and gains they distribute to you. The Board reserves the
right not to maintain the qualification of a Fund as a regulated investment
company if it determines that course of action to be beneficial to
shareholders. In that case, the Fund will be subject to federal, and possibly
state, corporate taxes on its taxable income and gains, and distributions to
you will be taxed as ordinary dividend income to the extent of the Fund's
earnings and profits.

Excise tax distribution requirements. To avoid federal excise taxes, the Code
requires each Fund to distribute to you by December 31 of each year, at a
minimum, the following amounts:

* 98% of its taxable ordinary income earned during the calendar year;
* 98% if its capital gain net income earned during the twelve-month period
ending October 31 of that year; and
* 100% of any undistributed amounts from the prior year.

Each Fund intends to declare these amounts in December and pay them in December
or in January (if they are treated by you as received in December according to
the rules described above) to avoid these excise taxes but can give no
assurances that its distributions will be sufficient to eliminate all such
taxes.

Redemption or exchange of Fund shares. Redemptions and exchanges of Fund
shares are taxable transactions for federal and state income tax purposes. If
you redeem your Fund shares, or exchange them for shares of a different Viking
Mutual Fund, you must report a gain or loss on your redemption or exchange. If
you hold your shares as a capital asset, the gain or loss that you realize will

B-19

be capital gain or loss, and it will be long-term or short-term, depending on
how long you hold your shares. Any loss incurred on the redemption or exchange
of shares held for six months or less will be disallowed to the extent of any
exempt-interest dividends distributed to you with respect to your shares in a
Tax-Free Fund and any remaining loss (or the entire loss in the case of the
Large-Cap Fund) will be treated as a long-term capital loss to the extent of
any net long-term capital gains distributed to you by a Fund on those shares.

All or a portion of any loss that you realize on the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of distributions or otherwise) within 30 days before or
after your share redemption. Any loss disallowed under these rules will be
added to your tax basis in the new shares you buy.

Deferral of basis. If you redeem (sell) some or all of your shares in a Fund
within 90 days after buying them and then reinvest the sales proceeds in that
Fund or invest those proceeds in another Viking Mutual Fund, the sales charge
that would otherwise apply to your reinvestment may be reduced or eliminated
pursuant to the reinvestment or exchange privilege described in the Funds'
prospectus. All or a portion of the sales charge that you paid for your
original shares (up to the amount of the reduction of the sales charge on the
subsequent reinvestment or investment) will be excluded from your tax basis in
these shares sold (for the purpose of determining gain or loss upon the sale of
them). Any excluded portion of the sales charge will be added to the tax basis
of the shares you subsequently acquire.

U.S. Government obligations. Many states grant tax-free status to dividends
paid to you from interest earned on direct obligations of the U.S. government,
subject in some states to minimum investment requirements that must be met by
the Fund.

ORGANIZATION, CAPITALIZATION AND OTHER MATTERS
- ----------------------------------------------

Each Fund is a separate operating series of Viking Mutual Funds (the "Trust"),
a Delaware business trust organized pursuant to a Trust Instrument dated March
30, 1999. The Trust is registered under the 1940 Act as an open-end management
investment company, commonly known as a mutual fund. The Trust has three
separate operating series. Two of its series, the Tax-Free Funds, are non-
diversified, and the Large-Cap Fund is diversified. Each series of the Trust
invests all of its net investable assets in a separate portfolio of securities.
The trustees of the Trust may establish additional series or classes of shares
without the approval of shareholders. The assets of each series belong only to
that series, and the liabilities of each series are borne solely by that series
and no other.

Description of Shares. Each Fund is authorized to issue an unlimited number of
shares of beneficial interest (par value $0.001 per share). Shares of the Fund
represent equal proportionate interests in the assets of the Fund only and have
identical voting, dividend, redemption, liquidation, and other rights. All
shares issued are fully paid and non-assessable, and shareholders have no
preemptive or other rights to subscribe to any additional shares.

B-20

Shareholder Meetings. The Trustees of the Trust do not intend to hold annual
meetings of shareholders of any Fund. The Trustees will call special meetings
of shareholders of a Fund only if required under the 1940 Act or in their
discretion or upon the written request of holders of 10% or more of the
outstanding shares of the Fund entitled to vote.

Certain Provisions of Trust Instrument. Under Delaware law, the shareholders
of each Fund will not be personally liable for the obligations of that Fund; a
shareholder is entitled to the same limitation of personal liability extended
to shareholders of a corporation. To guard against the risk that Delaware law
might not be applied in other states, the Trust Instrument requires that every
written obligation of the Trust or a Fund contain a statement that such
obligation may be enforced only against the assets of the Trust or Fund and
provides for indemnification out of Trust or Fund property of any shareholder
nevertheless held personally liable for Trust or Fund obligations,
respectively.

BUYING AND SELLING SHARES
- -------------------------

The Funds continuously offer their shares through securities dealers who have
an agreement with Viking Fund Distributors, LLC ("Distributors"). A securities
dealer includes any financial institution that, either directly or through
affiliates, has an agreement with Distributors to handle customer orders and
accounts with the Funds. This reference is for convenience only and does not
indicate a legal conclusion of capacity. Banks and financial institutions that
sell shares of the Funds may be required by state law to register as securities
dealers.

All checks, drafts, wires and other payment mediums used to buy or sell shares
of the Funds must be denominated in U.S. dollars. The Funds may either (a)
reject any order to buy or sell shares denominated in any other currency or (b)
honor the transaction and make adjustments to your account for the transaction
as of a date and with a foreign currency exchange factor determined by the
drawee bank.

If you buy shares through the reinvestment of dividends, the shares will be
purchased at the net asset value determined on the business day following the
dividend record date (sometimes known as the "ex-dividend date").

Initial sales charges. For the Tax-Free Funds, the maximum initial sales
charge is 4.50%. For the Large-Cap Fund, the maximum initial sales charge is
5.25%. The initial sales charge may be reduced for certain large purchases, as
described in the prospectus. We offer several ways for you to combine your
purchases of shares of the Funds to take advantage of the lower sales charges
for large purchases.

Cumulative quantity discount. For purposes of calculating the sales charge,
you may combine the amount of your current purchase with the cost or current
value, whichever is higher, of your existing shares in the Funds. You may also
combine the shares of your spouse, children under the age of 21 or
grandchildren under the age of 21. If you are the sole owner of a company, you
may also add any company accounts, including retirement plan accounts.

B-21

Companies with one or more retirement plans may add together the total plan
assets invested in the Funds to determine the sales charge that applies.

Letter of Intent (LOI). You may buy shares at a reduced sales charge by
completing the letter of intent section of your account application. A letter
of intent is a commitment by you to invest a specified dollar amount during a
13 month period. The amount you agree to invest determines the sales charge
you pay. By completing the letter of intent section of the application, you
acknowledge and agree to the following:

* You authorize Distributors to reserve 5% of your total intended purchase
registered in your name until you fulfill your LOI. Your periodic statements
will include the reserved shares in the total shares you own, and we will pay
or reinvest dividend and capital gain distributions on the reserved shares
according to the distribution option you have chosen.
* You give Distributors a security interest in the reserved shares and appoint
Distributors as attorney-in-fact.
* Distributors may sell any or all of the reserved shares to cover any
additional sales charge if you do not fulfill the terms of the LOI.
* Although you may exchange your shares, you may not sell reserved shares until
you complete the LOI or pay the higher sales charge.

After you file your LOI with a Fund, you may buy shares at the sales charge
applicable to the amount specified in your LOI. Sales charge reductions based
on purchases in more than one Fund will be effective only after notification to
Distributors that the investment qualifies for a discount. Any purchases you
made within 90 days before you filed your LOI may also qualify for a
retroactive reduction in the sales charge. If you file your LOI with a Fund
before a change in the Fund's sales charge, you may complete your LOI at the
lower of the new sales charge or the sales charge in effect when the LOI was
filed.

Your holdings in the Funds acquired more than 90 days before you filed your LOI
will be counted towards the completion of the LOI, but they will not be
entitled to a retroactive reduction in the sales charge. Any redemptions you
make during the 13 month period will be subtracted from the amount of the
purchases for purposes of determining whether the terms of the LOI have been
completed.

If the terms of your LOI are met, the reserved shares will be deposited to an
account in your name or delivered to you as you direct. If the amount of your
total purchases, less redemptions, is more than the amount specified in your
LOI and is an amount that would qualify for a further sales charge reduction, a
retroactive price adjustment will be made by Distributors and the securities
dealer through whom purchases were made. The price adjustment will be made on
purchases made within 90 days before and on those made after you filed your LOI
and will be applied towards the purchase of additional shares at the offering
price applicable to a single purchase on the dollar amount of the total
purchases.

B-22

If the amount of your total purchases, less redemptions, is less than the
amount specified in your LOI, the sales charge will be adjusted upward,
depending on the actual amount purchased (less redemptions) during the period.
You will need to send Distributors an amount equal to the difference in the
actual dollar amount of sales charge paid and the amount of sales charge that
would have applied to the total purchases if the total of the purchases had
been made at one time. Upon payment of this amount, the reserved shares held
for your account will be deposited to an account in your name or delivered to
you or as your direct. If within 20 days after written request the difference
in sales charge is not paid, we will redeem an appropriate number of reserved
shares to realize the difference. If you redeem the total amount in your
account before you fulfill your LOI, we will deduct the additional sales charge
due from the sale proceeds and forward the balance to you.

For LOIs filed on behalf of certain retirement plans, the level and any
reduction in sales charge for these plans will be based on actual plan
participation and the projected investments in the Funds under the LOI. These
plans are not subject to the requirement to reserve 5% of the total intended
purchase or to the policy on upward adjustments in sales charges described
above, or to any penalty as a result of the early termination of a plan, nor
are these plans entitled to receive retroactive adjustments in price for
investments made before executing the LOI.

Group purchases. If you are a member of a qualified group, you may buy shares
at a reduced sales charge that applies to the group as a whole. The sales
charge is based on the combined dollar value of the group members' existing
investments, plus the amount of the current purchase.

A qualified group is one that:

* Was formed at least six months ago
* Has a purpose other than buying fund shares at a discount
* Has more than 10 members
* Can arrange for meetings between our representatives and group members
* Agrees to include the Funds' sales and other materials in publications and
mailings to its members at reduced or no cost to Distributors

Dealer compensation. Financial institutions or their affiliated brokers may
receive an agency transaction fee as described in the Funds' prospectus.

Distributors and/or its affiliates provide financial support to various
securities dealers that sell shares of the Funds. This support is based
primarily on the amount of sales of Fund shares. The amount of support may be
affected by: total sales; net sales; levels of redemptions; the proportion of a
securities dealer's sales and marketing efforts in the Funds; a securities
dealer's support of, and participation in, Distributors' marketing programs; a
securities dealer's compensation programs for its registered representatives;
and the extent of a securities dealer's marketing programs relating to the
Funds. Financial support to securities dealers may be made by payments from
Distributors' resources, from Distributors' retention of underwriting

B-23

concessions and from payments to Distributors under Rule 12b-1 plans. In
addition, certain securities dealers may receive brokerage commissions
generated by Fund portfolio transactions in accordance with the rules of the
National Association of Securities Dealers, Inc. ("NASD")

Distributors may sponsor due diligence meetings for registered representatives
during which they receive updates on various Funds and are afforded the
opportunity to speak with portfolio managers. Invitation to these meetings is
not conditioned on selling a specific number of shares. Those who have shown an
interest in the Funds, however, are more likely to be considered. To the extent
permitted by their firm's policies and procedures, registered representatives'
expenses in attending these meetings may be covered by Distributors.

Exchange privilege. If you request the exchange of the total value of your
account, declared but unpaid income dividends and capital gain distributions
will be exchanged into the new Fund and invested at net asset value. Backup
withholding and information reporting may apply.

If a substantial number of shareholders should, within a short period, sell
their Fund shares under the exchange privilege, the Fund might have to sell
portfolio securities it might otherwise hold and incur the additional costs
related to such transactions. On the other hand, increased use of the exchange
privilege may result in periodic large inflows of money. If this occurs, it is
the Funds' general policy to initially invest this money in shares of other
investment companies, short term U.S. Government obligations or cash and cash
equivalents, unless it is believed that attractive investment opportunities
consistent with the Funds' investment goals exist immediately. This money will
then be withdrawn from the shares of other investment companies, short term
U.S. Government obligations or cash and cash equivalents and invested in
portfolio securities in as orderly a manner as is possible when attractive
investment opportunities arise.

The sale of Fund shares to complete an exchange will be effected at net asset
value at the close of business on the day the request for exchange is received
in proper form.

Systematic withdrawal plan. Our systematic withdrawal plan allows you to sell
your shares and receive regular payments from your account on a monthly,
quarterly, semiannual or annual basis. The value of your account must be at
least $5,000 and the minimum payment amount for each withdrawal must be at
least $25. For retirement plans subject to mandatory distribution requirements,
the $25 minimum will not apply. There are no service charges for establishing
or maintaining a systematic withdrawal plan.

Payments under the plan will be made from the redemption of an equivalent
amount of shares in your account, generally on the 25th day of the month in
which a payment is scheduled. If the 25th falls on a weekend or holiday, we
will process the redemption on the next business day. When you sell your shares
under a systematic withdrawal plan, it is a taxable transaction.

To avoid paying sales charges on money you plan to withdraw within a short
period of time, you may not want to set up a systematic withdrawal plan if you
plan to buy shares on a regular basis.

B-24

Redeeming shares through a systematic withdrawal plan may reduce or exhaust the
shares in your account. This is especially likely to occur if there is a
market decline. If a withdrawal amount exceeds the value of your account, your
account will be closed and the remaining balance in your account will be sent
to you.

You may discontinue a systematic withdrawal plan or change the amount and
schedule of withdrawal payments by notifying us by mail or by phone at least
seven business days before the end of the month preceding a scheduled payment.
The Funds may discontinue a systematic withdrawal plan by notifying you in
writing and will automatically discontinue a systematic withdrawal plan if all
shares in your account are withdrawn or if the Fund receives notification of
the shareholder's death or incapacity.

Redemptions in kind. Each Fund is obligated to pay in cash (by check)
all requests for redemption by any shareholder of record, limited in amount,
however, during any 90-day period to the lesser of $250,000 or 1% of the
value of the Fund's net assets at the beginning of the 90-day period. This
commitment is irrevocable without the prior approval of the Securities and
Exchange Commission ("SEC"). In the case of redemption requests in excess of
these amounts, the Board reserves the right to make payments in whole or in
part in securities or other assets of the Fund, in case of an emergency, or if
the payment of such a redemption in cash would be detrimental to the existing
shareholders of a Fund. In these circumstances, the securities distributed
would be valued at the price used to compute the Fund's net assets and you may
incur brokerage fees in converting the securities to cash. The Funds do not
intend to redeem illiquid securities in kind. If this happens, however, you may
not be able to recover your investment in a timely manner.

Share certificates. We will credit your shares to your Fund account. We do not
issue share certificates unless you specifically request them. This eliminates
the costly problem of replacing lost, stolen or destroyed certificates. If a
certificate is lost, stolen or destroyed, you may have to pay an insurance
premium to replace it.

Any outstanding share certificates must be returned to the Fund if you want to
sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do this
either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form and to send the certificate and assignment form in separate
envelopes.

General information. If dividend checks are returned to the Funds marked
"unable to forward" by the postal service, we will consider this a request by
you to change your dividend option to reinvest all distributions. The proceeds
will be reinvested in additional shares at net asset value until we receive new
instructions.

Distribution or redemption checks sent to you do not earn interest or any other
income during the time the checks remain uncashed. Neither the Funds nor their
affiliates will be liable for any loss caused by your failure to cash such

B-25

checks. The Funds are not responsible for tracking down uncashed checks, unless
a check is returned as undeliverable.

In most cases, if mail is returned as undeliverable we are required to take
certain steps to try to find you free of charge. If these attempts are
unsuccessful, however, we may deduct the costs of any additional efforts to
find you from your account. These costs may include a percentage of the account
when a search company charges a percentage fee in exchange for its location
services.

The wiring of redemption proceeds is a special service that we make available
whenever possible. By offering this service to you, the Funds are not bound to
meet any redemption request in less than the seven day period prescribed by
law. Neither the Funds nor their agents shall be liable to you or any other
person if, for any reason, a redemption request by wire is not processed as
described in the prospectus.

Viking Management may pay certain financial institutions that maintain omnibus
accounts with the Funds on behalf of numerous beneficial owners for
recordkeeping operations performed with respect to such owners. For each
beneficial owner in the omnibus account, a Fund may reimburse Viking Management
an amount not to exceed the per account fee that the Fund normally pays Viking
Management for Shareholder Services. These financial institutions may also
charge a fee for their services directly to their clients.

If you buy or sell shares through your securities dealer, we use the net
asset value next calculated after your securities dealer receives your request,
which should be promptly transmitted to the Fund. If you sell shares through
your securities dealer, it is your dealer's responsibility to transmit the
order to the Fund in a timely fashion. Any loss to you resulting from your
dealer's failure to transmit your redemption order to the Fund in a timely
fashion must be settled between you and your securities dealer.

In the event of disputes involving multiple claims of ownership or authority to
control your account, each Fund has the right (but has no obligation) to: (a)
freeze the account and require the written agreement of all persons deemed by
the Fund to have a potential property interest in the account, before executing
instructions regarding the account; (b) interplead disputed funds or accounts
with a court of competent jurisdiction; or (c) surrender ownership of all or a
portion of the account to the IRS in response to a notice of levy.

PRICING SHARES
- --------------

When you buy shares, you pay the offering price. The offering price is the net
asset value (NAV) per share plus any applicable sales charge, calculated to two
decimal places using standard rounding criteria. When you sell shares, you
receive the NAV.

The value of a mutual fund is determined by deducting the fund's liabilities
from the total assets of the portfolio. The net asset value per share is
determined by dividing the net asset value of the fund by the number of shares
outstanding.

B-26

The Funds calculate the NAV per share each business day at the close of trading
on the New York Stock Exchange (normally 3:00 p.m. central time). The Funds do
not calculate the NAV on days the New York Stock Exchange (NYSE) is closed for
trading.

When determining its NAV, each Fund values cash and receivables at their
realizable amounts, and records interest as accrued and dividends on the ex-
dividend date. If market quotations are readily available for portfolio
securities listed on a securities exchange or on the NASDAQ National Market
System, each Fund values those securities at the last quoted sale price of the
day or, if there is no reported sale, within the range of the most recent
quoted bid and ask prices. Each Fund values over-the-counter portfolio
securities within the range of the most recent quoted bid and ask prices.

Generally, trading in corporate bonds, U.S. Government securities and money
market instruments is substantially completed each day at various times before
the close of the NYSE. The value of these securities used in computing the NAV
is determined as of such times. Occasionally, events affecting the values of
these securities may occur between the times at which they are determined and
the close of the NYSE. If events materially affecting the values of these
securities occur during this period, the securities will be valued at their
fair value as determined in good faith following procedures approved by the
Board.

Municipal securities are valued by Viking Management using a matrix system
which estimates market values from yield data relating to securities with
similar characteristics.

Securities and other assets for which market prices are not readily available
are valued at fair value as determined following procedures approved by the
Board. With the approval of the Board, the Funds may use a pricing service,
bank or securities dealer to perform any of the above described functions.

THE UNDERWRITER
- ---------------

Viking Fund Distributors, LLC ("Viking Distributors") acts as the principal
underwriter in the continuous public offering of the Funds' shares. Viking
Distributors is located at 1400 14th Ave. SW, Minot, ND 58701.

Viking Distributors pays the expenses of the distribution of Fund shares,
including advertising expenses and the costs of printing sales material and
prospectuses used to offer shares to the public. Each Fund pays the expenses of
preparing and printing amendments to its registration statements and
prospectuses (other than those necessitated by the activities of Viking
Distributors) and of sending prospectuses to existing shareholders.

Viking Distributors may be entitled to reimbursement under the Rule 12b-1 plan,
as discussed below. Except as noted, Viking Distributors receives no other
compensation from the Funds for acting as underwriter.

B-27

Distribution and service (12b-1) fees. The Funds have adopted a distribution
and service plan dated May 26, 1999 with respect to each Fund (the "Plan"),
in accordance with the requirements of Rule 12b-1 under the 1940 Act and the
requirements of the applicable rules of the NASD regarding asset-based sales
charges.

Pursuant to the Plan, each Fund may compensate Viking Distributors for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares and for maintenance and personal service provided to existing
shareholders. The Plan authorizes payments to Viking Distributors of up to
0.25% annually of the average daily net assets of the Tax-Free Funds. The Plan
authorizes payments to Viking Distributors of up to 0.40% annually of the
average daily net assets of the Large-Cap Fund. All distribution expenses over
this amount will be borne by those who have incurred them.

The Plan. The Plan further provides for periodic payments by Viking
Distributors to brokers, dealers and other financial intermediaries for
providing shareholder services and for promotional and other sales related
costs. These expenses may include, among others, distribution or service fees
paid to securities dealers or others who have executed a dealer agreement with
the Funds, Viking Distributors or its affiliates; a prorated portion of Viking
Distributor's overhead expenses; and the expenses of printing prospectuses and
reports used for sales purposes; and preparing and distributing sales
literature and advertisements. The portion of payments by a Fund for
shareholder servicing may not exceed an annual rate of 0.25% of the average
daily net asset value of Fund shares owned by clients of such broker, dealer or
financial intermediary.

The fee is an expense. This means that all shareholders, regardless of when
they purchased their shares, will bear Rule 12b-1 expenses at the same rate.
The Plan does not permit unreimbursed expenses incurred in a particular year to
be carried over to be reimbursed in later years.

In addition to the payments that Viking Distributors or others are entitled to
under the Plan, the Plan also provides that to the extent each Fund, Viking
Management or Viking Distributors or other parties on behalf of the Fund, make
payments that are deemed to be for the financing of any activity primarily
intended to result in the sale of Fund shares within the context of Rule 12b-1
under the 1940 Act, then such payments shall be deemed to have been made
pursuant to the Plan. The terms and provisions of the Plan relating to required
reports, term, and approval are consistent with Rule 12b-1.

The Plan has been approved in accordance with the provisions of Rule 12b-1. The
Plan is renewable annually by a vote of the Board, including a majority vote of
the Board members who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan, cast in
person at a meeting called for that purpose. It is also required that the
selection and nomination of such Board members be done by the noninterested
members of the Fund's Board. The Plan and any related agreement may be
terminated at any time, without penalty, by vote of a majority of the
noninterested Board members on not more than 60 days' written notice, by Viking
Distributors on not more than 60 days' written notice, by any act that

B-28

constitutes an assignment of the management agreement with the manager or by
vote of a majority of the outstanding shares of the Fund. Viking Distributors
or any dealer or other firm may also terminate their respective dealer
agreement at any time upon written notice.

The Plan and any related agreements may not be amended to increase materially
the amount to be spent for distribution expenses without approval by a majority
of the outstanding shares of the Fund, and all material amendments to the Plan
or any related agreements shall be approved by a vote of the noninterested
Board members, cast in person at a meeting called for the purpose of voting on
any such amendment.

Distributors is required to report in writing to the Board at least quarterly
on the amounts and purpose of any payment made under the Plan and any related
agreements, as well as to furnish the Board with such other information as may
reasonably be requested in order to enable the Board to make an informed
determination of whether the Plan should be continued.

PERFORMANCE
- -----------

Performance quotations are subject to SEC rules. These rules require the use
of standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by a Fund be accompanied by
certain standardized performance information computed as required by the SEC.
Average annual total return and current yield quotations used by the Funds are
based on the standardized methods of computing performance mandated by the SEC.
An explanation of these and other methods used by the Funds to compute or
express performance follows. Regardless of the method used, past performance
does not guarantee future results, and is an indication of the return to
shareholders only for the limited historical period used. When this prospectus
was written, the Funds were new and did not have any performance to report.

Average annual total return. Average annual total return is determined by
finding the average annual rates of return that would equate an initial
hypothetical $1,000 investment to its ending redeemable value. The calculation
assumes the maximum initial sales charge is deducted from the initial $1,000
purchase, and income dividends and capital gain distributions are reinvested at
net asset value. The quotation assumes the account was completely redeemed at
the end of each period. If a change is made to the sales charge structure,
historical performance information will be restated to reflect the maximum
initial sales charge currently in effect.

When considering the average annual total return quotations, you should keep in
mind that the maximum initial sales charge reflected in each quotation is a one
time fee charged on all direct purchases, which will have its greatest impact
during the early stages of your investment. This charge will affect actual
performance less the longer you retain your investment in a Fund.

These figures will be calculated according to the SEC formula:

P(1+T)n = ERV

B-29

where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of each period at the end of each period

Cumulative total return. Like average annual total return, cumulative total
return assumes the maximum initial sales charge is deducted from the initial
$1,000 purchase, and income dividends and capital gain distributions are
reinvested at net asset value. Cumulative total return, however, is based on
the actual return for a specified period rather than on the average return over
the periods.

Current yield. Current yield shows the income per share earned by a Fund. It is
calculated by dividing the net investment income per share earned during a 30-
day base period by the applicable maximum offering price per share on the last
day of the period and annualizing the result. Expenses accrued for the period
include any fees charged to all shareholders of the Fund during the base
period.

These figures will be obtained using the following SEC formula:

Yield = 2 [(a-b + 1)6 - 1]
----
cd

where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period

Taxable-equivalent yield. The Tax-Free Funds may also quote a taxable-
equivalent yield that shows the before-tax yield that would have to be earned
from a taxable investment to equal the yield for the Fund. Taxable-equivalent
yield is computed by dividing the portion of the Funds' yield that is tax-
exempt by one minus the highest applicable combined federal and state income
tax rate and adding the product to the portion of the Funds yield that is not
tax-exempt.

As of April 30, 1999, the federal income tax rate upon which the taxable-
equivalent yield quotations are based was 39.6%. As of April 30, 1999, the
state income tax rate upon which the taxable-equivalent yields are also based
was 11.00% and 5.54%, respectively, for Montana and North Dakota. As a result,
as of April 30, 1999, the combined federal and state income tax rates upon
which the taxable-equivalent yield quotations are based was 50.60% and 45.14%

B-30

for Montana and North Dakota, respectively. From time to time, as any changes
to the rates become effective, taxable-equivalent yield quotations advertised
by the Funds will be updated to reflect these changes. The Funds expect
updates may be necessary as tax rates are changed by federal and state
governments. The advantage of tax-free investments, like the Funds, will be
enhanced by any tax rate increases. Therefore, the details of specific tax
increases may be used in sales material for the Funds.

Current distribution rate. Current yield, which is calculated according to
a formula prescribed by the SEC, is not indicative of the amounts which were or
will be paid to shareholders. Amounts paid to shareholders are reflected in the
quoted current distribution rate or taxable-equivalent rate. The current
distribution rate is usually computed by annualizing the dividends paid per
share by a Fund during a certain period and dividing that amount by the current
maximum offering price.

Volatility. Occasionally statistics may be used to show a fund's volatility or
risk. Measures of volatility or risk are generally used to compare a fund's net
asset value or performance to a market index. One measure of volatility is
beta. Beta is the volatility of a fund relative to the total market, as
represented by an index considered representative of the types of securities in
which the fund invests. A beta of more than 1.00 indicates volatility greater
than the market and a beta of less than 1.00 indicates volatility less than the
market. Another measure of volatility or risk is standard deviation. Standard
deviation is used to measure variability of net asset value or total return
around an average over a specified period of time. The idea is that greater
volatility means greater risk undertaken in achieving performance.

Other performance quotations. The Funds may also quote the performance of
shares without a sales charge. Sales literature and advertising may quote a
current distribution rate, yield, cumulative total return, average annual total
return and other measures of performance with the substitution of net asset
value for the public offering price.

The Funds may include in their advertising or sales material information
relating to investment goals and performance results of the Funds. Viking
Management is adviser and parent company to the underwriter of the Funds.

COMPARISONS
- -----------

To help you better evaluate how an investment in a Fund may satisfy your
investment goal, advertisements and other materials about the Fund may discuss
certain measures of Fund performance as reported by various financial
publications. Materials may also compare performance (as calculated above) to
performance as reported by other investments, indices, and averages. These
comparisons may include, but are not limited to, the following examples:

* Dow Jones Composite Average and its component averages - a price-weighted
average of 65 stocks that trade on the New York Stock Exchange. The average
is a combination of the Dow Jones Industrial Average (30 blue-chip stocks

B-31

that are generally leaders in their industry), the Dow Jones Transportation
Average (20 transportation stocks), and the Dow Jones Utilities Average (15
utility stocks involved in the production of electrical energy).
* Standard & Poor's 500 Stock Index or its component indices - a
capitalization-weighted index designed to measure performance of the broad
domestic economy through changes in the aggregate market value of 500 stocks
representing all major industries.
* Russell 3000 Index or its component indices - measures the performance of the
3,000 largest U.S. companies based on total market capitalization, which
represents approximately 98% of the investable U.S. equity market.
* The New York Stock Exchange composite or component indices - an unmanaged
index of all industrial, utilities, transportation, and finance stocks listed
on the NYSE.
* Wilshire 5000 Equity Index - represents the return on the market value of all
common equity securities for which daily pricing is available. Comparisons
of performance assume reinvestment of dividends.
* CDA Mutual Fund Report, published by CDA Investment Technologies, Inc. -
analyzes price, current yield, risk, total return, and average rate of return
(average annual compounded growth rate) over specified time periods for the
mutual fund industry.
* Mutual Fund Source Book, published by Morningstar, Inc. - analyzes price,
yield, risk, and total return for mutual funds.
* Financial publications: The Wall Street Journal, Business Week, Changing
Times, Financial World, Forbes, Fortune, and Money magazines - provide
performance statistics over specified time periods.
* Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau
of Labor Statistics - a statistical measure of change, over time, in the
price of goods and services in major expenditure groups.
* Stocks, Bonds, Bills, and Inflation, published by Ibbotson Associates -
historical measure of yield, price, and total return for common and small
company stock, long-term government bonds, Treasury bills, and inflation.
* Lehman Brothers Municipal Bond Index or its component indices - measures
yield, price and total return for the municipal bond market.
* Bond Buyer 20 Index - an index of municipal bond yields based upon yields of
20 general obligation bonds maturing in 20 years.
* Bond Buyer 40 Index - an index composed of the yield to maturity of 40 bonds.
The index attempts to track the new-issue market as closely as possible, so
it changes bonds twice a month, adding all new bonds that meet certain
requirements and deleting an equivalent number according to their secondary
market trading activity. As a result, the average par call date, average
maturity date, and average coupon rate can and have changed over time. The
average maturity generally has been about 29-30 years.
* Morningstar - information published by Morningstar, Inc., including
Morningstar proprietary mutual fund ratings. The ratings reflect
Morningstar's assessment of the historical risk-adjusted performance of a
fund over specified time periods relative to other funds within its category.
* Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income Fund
Performance Analysis - measure total return and average current yield for the
mutual fund industry and rank individual mutual fund performance over

B-32

specified time periods, assuming reinvestment of all distributions, exclusive
of any applicable sales charges.

From time to time advertisements or information for each Fund may include a
discussion of certain attributes or benefits to be derived from an investment
in the Fund. The advertisements or information may include symbols, headlines,
or other material that highlights or summarizes the information discussed in
more detail in the communication.

Advertisements or sales material issued by each Fund may also discuss or be
based upon information in a recent issue of the Special Report on Tax Freedom
Day published by the Tax Foundation, a Washington, D.C. based nonprofit
research and public education organization. The report illustrates, among
other things, the annual amount of time the average taxpayer works to satisfy
his or her tax obligations to the federal, state and local taxing authorities.

Advertisements or information may also compare each Fund's performance to the
return on CDs or other investments. You should be aware, however, that an
investment in a Fund involves the risk of fluctuation of principal value, a
risk generally not present in an investment in a CD issued by a bank. For
example, as the general level of interest rates rise, the value of a Fund's
fixed-income investments, as well as the value of its shares that are based
upon the value of such portfolio investments, can be expected to decrease.
Conversely, when interest rates decrease, the value of a Fund's shares can be
expected to increase. CDs are frequently insured by an agency of the U.S.
government. An investment in a Fund is not insured by any federal, state or
private entity.

In assessing comparisons of performance, you should keep in mind that the
composition of the investments in the reported indices and averages is not
identical to a Fund's portfolio, the indices and averages are generally
unmanaged, and the items included in the calculations of the averages may not
be identical to the formula used by a Fund to calculate its figures. In
addition, there can be no assurance that a Fund will continue its performance
as compared to these other averages.

DESCRIPTION OF BOND RATINGS
- ---------------------------

MOODY'S

Aaa: Municipal bonds rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt-
edged." Interest payments are protected by a large or exceptionally stable
margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa: Municipal bonds rated Aa are judged to be high quality by all standards.
Together with the Aaa group, they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large, fluctuation of protective elements may be of

B-33

greater amplitude, or there may be other elements present that make the long-
term risks appear somewhat larger.

A: Municipal bonds rated A possess many favorable investment attributes and are
considered upper medium-grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present that suggest
a susceptibility to impairment sometime in the future.

Baa: Municipal bonds rated Baa are considered medium-grade obligations. They
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. These bonds lack outstanding investment characteristics and,
in fact, have speculative characteristics as well.

Ba: Municipal bonds rated Ba are judged to have predominantly speculative
elements and their future cannot be considered well assured. Often the
protection of interest and principal payments may be very moderate and,
thereby, not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Municipal bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Municipal bonds rated Caa are of poor standing. These issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Con.(-): Municipal bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b) earnings
of projects unseasoned in operation experience, (c) rentals that begin when
facilities are completed, or (d) payments to which some other limiting
condition attaches. Parenthetical rating denotes probable credit stature upon
the completion of construction or the elimination of the basis of the
condition.

S&P

AAA: Municipal bonds rated AAA are the highest-grade obligations. They possess
the ultimate degree of protection as to principal and interest. In the market,
they move with interest rates and, hence, provide the maximum safety on all
counts.

AA: Municipal bonds rated AA also qualify as high-grade obligations, and in the
majority of instances differ from AAA issues only in a small degree. Here, too,
prices move with the long-term money market.

B-34

A: Municipal bonds rated A are regarded as upper medium-grade. They have
considerable investment strength but are not entirely free from adverse effects
of changes in economic and trade conditions. Interest and principal are
regarded as safe. They predominantly reflect money rates in their market
behavior but also, to some extent, economic conditions.

BBB: Municipal bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds
in this category than for bonds in the A category.

BB, B, CCC, CC: Municipal bonds rated BB, B, CCC and CC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and CC the highest
degree of speculation. While these bonds will likely have some quality and
protective characteristics, they are outweighed by large uncertainties or major
risk exposures to adverse conditions.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

FITCH

AAA: Municipal bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal that is unlikely to be affected by reasonably
foreseeable events.

AA: Municipal bonds rated AA are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong although not quite as strong as bonds rated AAA and not
significantly vulnerable to foreseeable future developments.

A: Municipal bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB: Municipal bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

B-35

BB: Municipal bonds rated BB are considered speculative. The obligor's ability
to pay interest and repay principal may be affected over time by adverse
economic changes. Business and financial alternatives can be identified,
however, that could assist the obligor in satisfying its debt service
requirements.

B: Municipal bonds rated B are considered highly speculative. While bonds in
this class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC: Municipal bonds rated CCC have certain identifiable characteristics which,
if not remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.

Plus (+) or minus (-) signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus or minus signs
are not used with the AAA category.

B-36

PART C

OTHER INFORMATION

Item 23. Financial Statements and Exhibits
- ----------------------------------------------

(a) Financial Statements: None.

(b) Exhibits:
Exhibit
Number Description
------- -----------

(a) (1) Certificate of Trust. Incorporated
by reference to Registrants registration
statement, filed May 7, 1999, EDGAR
Accession No. 0001082744-99-000013.

(2) Trust Instrument of Viking Mutual Funds.
Incorporated by reference to Registrants
registration statement, filed May 7,
1999, EDGAR Accession No.
0001082744-99-00013.

(3) Schedule A - Current Series of Viking
Mutual Funds. Incorporated by reference
to Registrants registration statement,
filed May 7, 1999, EDGAR Accession No.
0001082744-99-00013.

(b) By-laws of Viking Mutual Funds. Incorporated by
reference to Registrants registration
statement, filed May 7, 1999, EDGAR Accession
No. 0001082744-99-00013.

(d) (1) (i) Investment Advisory and
Administration Agreement Between
Viking Mutual Funds and Viking
Fund Management, LLC. To be
filed.

(ii) Schedule A - Series of Viking
Mutual Funds Currently Subject
to the Investment Advisory and
Administration Agreement. To be
filed.

(iii) Schedule B - Schedule of
Compensation under the
Investment Advisory and
Administration Agreement. To be
filed.

(2) (i) Sub-Advisory Agreement Between
Viking Fund Management, LLC and
Fox Asset Management with
respect to Viking Mutual Funds
To be filed.

(ii) Schedule A - Series of Viking
Mutual Funds Currently Subject
to the Sub-Advisory Agreement.
To be filed.

(e) (1) Distribution Agreement Between Viking
Mutual Funds and Viking Fund
Distributors, LLC. To be filed.

(2) Schedule A - Series of Viking Mutual
Funds Currently Subject to the
Distribution Agreement. To be filed.

(f) Bonus, Profit Sharing or Pension Plans. None.

(g) (1) Custodian Contract Between Viking Mutual
Funds and First International Bank &
Trust. To be filed.

(2) Schedule of Compensation under the
Custodian Contract. To be filed.

(h) (1) Transfer Agency and Service Agreement
Between Viking Mutual Funds and Viking
Fund Management, LLC. To be filed.
(2) Schedule of Compensation under the
Transfer Agency and Service Agreement.
To be filed.

(i) Opinion and Consent of Kirkpatrick & Lockhart
LLP on Securities Matters with Respect to Viking
Mutual Funds. To be filed.

(j) Consent of Independent Auditors. None.

(k) Financial Statements Omitted from Prospectus.
None.

(l) Letter of Investment Intent. None.

(m) Plan Pursuant to Rule 12b-1. To be filed.

(n) Financial Data Schedule. None.

(o) Plan Pursuant to Rule 18f-3. None.

Item 24. Persons Controlled by or under Common Control with Registrant
- ------- -------------------------------------------------------------

No person is controlled by or under common control with the Registrant.

Item 25. Indemnification
- ------- ---------------

A Delaware business trust may provide in its governing instrument for
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article IX, Section 2 of the Trust Instrument
provides that the Registrant shall indemnify any present or former trustee,
officer, employee or agent of the Registrant ("Covered Person") to the fullest
extent permitted by law against liability and all expenses reasonably incurred
or paid by him or her in connection with any claim, action, suit or proceeding
("Action") in which he or she becomes involved as a party or otherwise by
virtue of his or her being or having been a Covered Person and against amounts
paid or incurred by him or her in settlement thereof. Indemnification will not
be provided to a person adjudged by a court or other body to be liable to the
Registrant or its shareholders by reason of "willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office" ("Disabling Conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of the
Registrant. In the event of a settlement, no indemnification may be provided
unless there has been a determination that the officer or trustee did not
engage in Disabling Conduct (i) by the court or other body approving the
settlement; (ii) by at least a majority of those trustees who are neither
interested persons, as that term is defined in the Investment Company Act of
1940 ("1940 Act"), of the Registrant ("Independent Trustees"), nor are parties
to the matter based upon a review of readily available facts; or (iii) by
written opinion of independent legal counsel based upon a review of readily
available facts.

Pursuant to Article IX, Section 3 of the Trust Instrument, if any present
or former shareholder of any series ("Series") of the Registrant shall be held
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the present or former shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of any entity, its
general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Registrant, on behalf of the affected
Series, shall, upon request by such shareholder, assume the defense of any
claim made against such shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ("1933 Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

Item 26. Business and Other Connections of Adviser
- ------- -----------------------------------------
There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or
officer of Viking Fund Management, LLC is, or at any time during the past two
years has been, engaged for his or her own account or in the capacity of
director, officer, employee, partner or trustee.

NAME BUSINESS AND OTHER CONNECTIONS
- ---- ------------------------------

Shannon D. Radke Trustee, President and Treasurer, Viking Mutual
Funds; Governor and President, Viking Fund
Distributors, LLC; Chief Operations Officer,
ND Holdings, Inc. until 05/98, 1 North Main,
Minot, ND 58703; Operations Manager, ND
Holdings, Inc. until 12/97, 1 North Main,
Minot, ND 58703.

Douglas P. Miller Trustee, Vice President and Secretary, Viking
Mutual Funds; Governor, Secretary and
Treasured, Viking Fund Distributors, LLC;
Controller, ND Holdings, Inc. until 05/98,
1 North Main, Minot, ND 58703; Fund Accountant,
ND Holdings, Inc. until 05/98, 1 North Main,
Minot, ND 58703.

Bruce I. Christianson Member, General Manager and Governor, South
Park Financial Group, LLC, 601-18th Ave. SE,
Suite 2, Minot, ND 58701-6732; Partner until
12/97 and Employee 01/98 to present, Magic City
Financial Group, Limited Partnership, 601-18th
Ave. SE, Suite 2, Minot, ND 58701-6732.

Robert J. Lamont Officer, Director and Employee, Lamont &
Skowronek, a Professional Corporation, 116-1st
St. SW, Minot, ND 58701; Partner, Lawyer's
Realty, 116-1st. St. SW, Minot, ND 58701;
Director, Fisher Motors, Inc., 1111 20th Ave.
SW, Minot, ND 58701; Director, Glacial
Holdings, Inc., 2501 Bel Air Place, Minot, ND
58703; Director, Expressway Imports, Inc., 1025
East Burdick Expressway, Bismarck, ND 58504;
Director and Past Chairman, Minot Area
Development Corporation, 1020 20th Ave. SW,
Minot, ND 58701.

John D. Stewart President and Owner, Fisher Motors, Inc., 1111
20th Ave. SW, Minot, ND 58701; President and
Owner, Glacial Holdings, Inc., 2501 Bel Air
Place, Minot, ND 58703; Director and Past
Chairman, Minot Area Development Corporation,
1020 20th Ave. SW, Minot, ND 58701; C.P.A.,
Partner, Brady, Martz & Associates, P.C. until
09/97, 24 Central Ave. West, Minot, ND 58701.

The principal address of Viking Mutual Funds and Viking Fund Distributors,
LLC is 1400 14th Avenue SW, Minot, North Dakota 58701

Item 27. Principal Underwriters
- -------- ----------------------

(a) Viking Fund Distributors, LLC, the principal underwriter
distributing securities of the Registrant, does not serve as the principal
underwriter or distributor for any other investment company.

(b) Set forth below is information concerning the directors and
officers of the Registrant's principal underwriter. The principal business
address of each of the persons listed is 1400 14th Avenue SW, Minot, North
Dakota 58701, which is also the address of the Registrant's principal
underwriter.

POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ---- --------------------- ---------------------

Shannon D. Radke Governor, President Trustee, President,
Treasurer

Douglas P. Miller Governor, Secretary, Trustee, Vice President
Treasurer, Secretary

(c) No commissions or other compensation were received directly or
indirectly from the Registrant by any principal underwriter who was not an
affiliated person of the Registrant.

Item 28. Location of Accounts and Records
- ------- --------------------------------

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, as amended, and the rules promulgated thereunder
with respect to the Registrant are maintained at the offices of Viking Fund
Management, LLC, 1400 14th Avenue SW, Minot, North Dakota 58701, and/or Fox
Asset Management, 44 Sycamore Avenue, Little Silver, New Jersey, 07739-1220,
except for the Registrant's Trust Instrument and By-laws, minutes of meetings
of the Registrant's Trustees and shareholders and the Registrant's policies and
contracts, which are maintained at the offices of the Registrant, 1400 14th
Avenue SW, Minot, North Dakota 58701.

Item 29. Management Services
- ------- -------------------

Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.

Item 30. Undertakings
- ------- ------------

None.

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, VIKING MUTUAL FUNDS has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Minot and State of North
Dakota on the 16th day of July, 1999.

VIKING MUTUAL FUNDS

/s/Shannon D. Radke
By:----------------------------
Shannon D. Radke
President, Treasurer, Trustee

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

Signature Title Date
- -------- ----- ----

/s/Douglas P. Miller
- ---------------------- Vice-President, Secretary, Trustee July 16, 1999
Douglas P. Miller

VIKING MUTUAL FUNDS
REGISTRATION STATEMENT ON FORM N-1A

INDEX TO EXHIBITS

Sequentially
Exhibit Numbered
Number Description Page
- ------- ----------- ------------

(a) (1) Certificate of Trust. Incorporated by N.A.
reference to Registrant's registration statement
filed May 7, 1999, EDGAR Accession No.
0001082744-99-000013.

(2) Trust Instrument of Viking Mutual Funds. N.A.
Incorporated by reference to Registrant's
registration statement filed May 7, 1999,
EDGAR Accession No. 0001082744-99-000013

(3) Schedule A - Current Series of Viking N.A.
Mutual Funds. Incorporated by reference to
Registrant's registration statement filed May 7,
1999, EDGAR Accession No. 0001082744-99-000013.

(b) By-laws of Viking Mutual Funds. Incorporated by N.A.
reference to Registrant's registration statement filed
May 7, 1999, EDGAR Accession No. 0001082744-99-000013.

(d) (1) (i) Investment Advisory and N.A.
Administration Agreement Between Viking
Mutual Funds and Viking Fund Management,
LLC. To be filed.

(ii) Schedule A - Series of Viking Mutual N.A.
Funds Currently Subject to the Investment
Advisory and Administration Agreement.
To be filed.

(iii) Schedule B - Schedule of Compensation N.A.
Under the Investment Advisory and
Administration Agreement. To be filed.

(2) (i) Sub-Advisory Agreement Between Viking N.A.
Fund Management, LLC and Fox Asset
Management with Respect to Viking
Mutual Funds. To be filed.

(ii) Schedule A - Series of Viking Mutual N.A.
Funds Currently Subject to the
Sub-Advisory Agreement. To be filed

(e) (1) Distribution Agreement Between Viking Mutual N.A.
Funds and Viking Fund Distributors, LLC.
To be filed.

(2) Schedule A - Series of Viking Mutual Funds N.A.
Currently Subject to the Distribution
Agreement. To be filed.

(f) Bonus, Profit Sharing or Pension Plans. None. N.A.

(g) (1) Custodian Contract Between Viking Mutual N.A.
Funds and First International Bank & Trust. To
be filed.

(2) Schedule of Compensation under the N.A.
Custodian Contract. To be filed.

(h) (1) Transfer Agency and Service Agreement N.A.
Between Viking Mutual Funds and Viking Fund
Management, LLC. To be filed.

(2) Schedule of Compensation under the Transfer N.A.
Agency and Service Agreement. To be filed.

(i) (1) Opinion and Consent of Kirkpatrick & Lockhart N.A.
LLP on Securities Matters with Respect to
Viking Mutual Funds. To be filed.

(j) Consent of Independent Auditors. None. N.A.

(k) Financial Statements Omitted from Prospectus. None. N.A.

(l) Letter of Investment Intent. None. N.A.

(m) Plan Pursuant to Rule 12b-1. To be filed. N.A.

(n) Financial Data Schedule. None. N.A.

(o) Plan Pursuant to Rule 18f-3. None. N.A.

VIKING MUTUAL FUNDS
1400 14th Avenue SW
Minot, North Dakota 58701

July 16, 1999

EDGAR FILING

U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Viking Mutual Funds
--Viking Tax-Free Fund for Montana
--Viking Tax-Free Fund for North Dakota
--Viking Large-Cap Value Fund
1933 Act File No. 333-77993
1940 Act File No. 811-9277
Pre-Effective Amendment No. 1

Dear Sir or Madam:

Transmitted herewith for filing pursuant to the Securities Act of 1933,
as amended, and Regulation C thereunder, and the Investment Company Act of
1940, as amended, and the regulations thereunder, is Pre-Effective Amendment
No. 1 to the initial registration statement on Form N-1A of Viking Mutual
Funds ("Registrant"). This filing contains conformed signature pages; the
manually signed originals are maintained at the offices of the Registrant.

This filing contains a prospectus and statement of additional information
("SAI") for Viking Tax-Free Fund for Montana, Viking Tax-Free Fund for North
Dakota and Viking Large-Cap Value Fund, which are currently the Registrant's
series. The primary purpose of this filing is to respond to staff comments
previously provided on the initial registration statement, filed May 7, 1999,
and to make other revisions to the documents intended for use by the
Registrant as its "red herring" prospectus and SAI.

Registrant expects to file a subsequent pre-effective amendment to its
registration statement prior to effectiveness, to include necessary exhibits,
financial information and the necessary correspondence from the Registrant
requesting acceleration of effectiveness.

Please contact Fatima Sulaiman at Kirkpatrick & Lockhart LLP, outside
counsel to the Registrant, at (202) 778-9223 with any questions or comments.
Thank you for your attention to this matter.

Sincerely,

Enclosures