DOLLAR RESERVES INC, 497, 1999-07-20

DOLLAR RESERVES INC
497, 1999-07-20

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[Insert Midas Funds Design]

MIDAS FUND MIDAS SPECIAL EQUITIES FUND
MIDAS INVESTORS MIDAS U.S. AND OVERSEAS FUND
MIDAS MAGIC DOLLAR RESERVES

Prospectus dated July 12, 1999

Newspaper Listing The Funds' net asset values are shown daily in
the mutual fund section of newspapers nationwide under the
heading "Midas."

This prospectus contains information you should know about the Funds before you
invest. Please keep it for future reference.

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.

TABLE OF CONTENTS

SUMMARY OF INVESTMENT OBJECTIVES, STRATEGIES, AND RISKS SUMMARY................2

PAST PERFORMANCE...............................................................3

FEES AND EXPENSES OF THE FUNDS.................................................7

PRINCIPAL INVESTMENT OBJECTIVES, STRATEGIES AND RISKS..........................8

PORTFOLIO MANAGEMENT..........................................................12

MANAGEMENT FEES...............................................................13

DISTRIBUTION AND SHAREHOLDER SERVICES.........................................13

PURCHASING SHARES.............................................................13

REDEEMING SHARES..............................................................15

ACCOUNT AND TRANSACTION POLICIES..............................................15

DISTRIBUTIONS AND TAXES.......................................................16

FINANCIAL HIGHLIGHTS..........................................................16

<PAGE>

INVESTMENT OBJECTIVES, STRATEGIES, AND RISKS SUMMARY

What are the principal investment objectives of the Midas Funds?
________________________________________________________________________________
MIDAS FUND seeks primarily capital appreciation and protection against inflation
and, secondarily, current income.

MIDAS INVESTORS seeks long term capital appreciation in investments with the
potential to provide a hedge against inflation and preserve the purchasing power
of the dollar. Income is a secondary objective.

MIDAS MAGIC seeks long term capital appreciation.

MIDAS SPECIAL EQUITIES FUND seeks capital appreciation.

MIDAS U.S. AND OVERSEAS FUND seeks to obtain the highest possible total return
on its assets from long term growth of capital and from income principally
through a portfolio of securities of U.S. and overseas issuers .

DOLLAR RESERVES is a money market fund seeking maximum current income consistent
with preservation of capital and maintenance of liquidity.
================================================================================

What are the principal investment strategies of the Midas Funds?
________________________________________________________________________________
MIDAS FUND invests at least 65% of its total assets in (i) securities of
companies primarily involved, directly or indirectly, in the business of mining,
processing, fabricating, distributing or otherwise dealing in gold, silver,
platinum or other natural resources and (ii) gold, silver and platinum bullion.
Up to 35% of the Fund's assets may be invested in securities of selected growth
companies and in U.S. Government securities. The Fund will emphasize the
potential for growth when choosing investments. A stock is typically sold when
its potential to meet the Fund's investment objective is limited or exceeded by
another potential investment.

MIDAS INVESTORS invests at least 65% of the Fund's total assets in (i) equity
securities (including common stocks, convertible securities and warrants) of
companies involved, directly or indirectly, in mining, processing or dealing in
gold or other precious metals, (ii) gold, platinum and silver bullion, and (iii)
gold coins. Up to 35% of the Fund's assets may be invested in securities of
selected growth companies and in U.S. Government securities. The Fund will
invest in companies whose earnings are expected to grow faster than the rate of
inflation. A stock is typically sold when its potential to meet the Fund's
investment objective is limited or exceeded by another potential investment.

MIDAS MAGIC invests primarily in equity securities of companies whose earnings
or revenue prospects are improving as a result of management, technology,
regulation, financial structure, or other special situations (e.g. liquidations
and reorganizations) and in companies whose shares have upward price momentum.
The Fund will normally sell investments with valuations that unduly increase
risk levels or no longer have desired upward price momentum.

MIDAS SPECIAL EQUITIES FUND invests aggressively primarily in equity securities,
often involving special situations (e.g. liquidations and reorganizations) and
emerging growth companies. The Fund will normally sell investments when the
value or growth potential of the investment appears limited or exceeded by other
investment opportunities.

MIDAS U.S. AND OVERSEAS FUND invests principally in a portfolio of securities of
U.S. and overseas issuers with growth in earnings and reasonable valuations in
terms of price/sales and similar ratios. The Fund will normally sell investments
when the value or growth potential of the investment appears limited or exceeded
by other investment opportunities.

DOLLAR RESERVES invests exclusively in money market obligations of the U.S.
Government, its agencies and instrumentalities.
================================================================================

<PAGE>

What are the principal risks of investing in the Midas Funds?

All of the Funds (except Dollar Reserves) are subject to the risks associated
with:
________________________________________________________________________________
Market. The market risks associated with investing in a Fund are those related
to fluctuations in the value of the Fund's portfolio. A risk of investing in
stocks is that their value will go up and down reflecting stock market movements
and you could lose money.

Small Capitalization. The Funds may invest in companies that are small or thinly
capitalized, and may have a limited operating history. Small-cap stocks is that
small-cap stocks are likely more vulnerable than larger companies to adverse
business or economic developments. During broad market downturns, Fund values
may fall further than that of funds investing in larger companies.

Foreign Investment. The Funds are subject to the unique risks of foreign
investing. Political turmoil and economic instability in the countries in which
the Funds may invest could adversely affect the value of your investment. Also,
if the value of any foreign currency in which a Fund's investments are
denominated declines relative to the U.S. dollar, the value and total return of
your investment in the Fund may decline as well.

Non-Diversification. The Funds are non-diversified which means that more than 5%
of a Fund's assets may be invested in the securities of one issuer. As a result,
each Fund may hold a smaller number of issuers than if it were diversified.
Investing in a Fund could involve more risk than investing in a fund that holds
a broader range of securities because changes in the financial condition of a
single issuer could cause greater fluctuation in the Fund's total returns.
================================================================================

Midas Fund and Midas Investors are subject to the risks associated with:
________________________________________________________________________________
Precious Metals Price. The prices of gold, silver, platinum and other natural
resources can be influenced by a variety of global economic, financial and
political factors and may fluctuate substantially over short periods of time and
be more volatile than other types of investments.

Mining. Resource mining by its nature involves significant risks and hazards to
which these Funds are exposed. Even when a resource mineralization is
discovered, there is no guarantee that the actual reserves of a mine will
increase. Exploratory mining can last over a number of years, incur substantial
costs, and not lead to any new commercial mining.
================================================================================

PAST PERFORMANCE

The bar charts provide some indication of the risks of investing in the Funds by
showing changes in each Fund's performance from year to year. The tables compare
the Funds' average annual returns for the 1, 5 and 10 year periods with
appropriate broad-based securities market indexes (except in the case of Dollar
Reserves) and in so doing, also reflects the risks of investing in the Funds.
The Standard & Poor's 500 Stock Index ("S&P 500") is an index that is unmanaged
and fully invested in common stocks. The Morningstar Precious Metals Fund
Average ("PMFA") is an equally weighted average of the 22 managed precious
metals funds tracked by Morningstar. The Morgan Stanley Capital International
("MSCI") World Index is an unmanaged index which is derived from equities of
Europe, Australasia and Far East countries and equities from Canada and the U.S.
The Russell 2000 Index is an index that is unmanaged and fully invested in
common stocks of small companies. The Lipper Analytical Money Market Index
("LAMMI") is an unmanaged index of money market funds that invest principally in
financial instruments issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, with dollar-weighted average maturities of less than 90
days and which intend to keep a constant net asset value ("NAV"). Both the bar
charts and the tables assume reinvestment of dividends and distributions. As
with all mutual funds, past performance is not necessarily an indication of
future performance.

<PAGE>

MIDAS FUND
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 21.88; 1990: (16.99); 1991: (0.20); 1992: (7.16); 1993: 99.24;
1994: (17.27); 1995: 36.73; 1996: 21.22; 1997: (59.03); 1998: (28.44);

Best Quarter:
4/93-6/93
36.64%

Worst Quarter:
10/97-12/97
(40.90)%

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
---------------------------------------------------------------------
Midas Fund (28.44)% (16.62)% (2.82)%
S&P 500 28.58% 24.05% 19.20%
PMFA (11.35)% (12.91)% (3.27)%

MIDAS INVESTORS
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 19.30; 1990: (22.14); 1991: (1.14); 1992: (17.18); 1993: 87.63;
1994: (13.83); 1995: (5.43); 1996: 4.26; 1997: (55.69); 1998: (32.21);

Best Quarter:
4/93-6/93
34.87%

Worst Quarter:
10/97-12/97
(32.99)%

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
---------------------------------------------------------------
Midas Investors (32.21)% (23.90)% (9.61)%
S&P 500 28.58% 24.05% 19.20%
PMFA (11.35)% (12.91)% (3.27)%

<PAGE>

MIDAS MAGIC
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 19.14; 1990: (31.75); 1991: 6.39; 1992: 28.00; 1993: 14.30;
1994: 1.58; 1995: 32.84; 1996: 18.67; 1997: 3.54; 1998: (13.82);

Best Quarter:
1/96-3/96
24.77%

Worst Quarter:
7/90-9/90
(19.47)%

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
-------------------------------------------------------------
Midas Magic (13.82)% 7.40% 6.10%
Russell 2000 Index (2.57)% 11.87% 12.92%

MIDAS SPECIAL EQUITIES FUND
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 42.29; 1990: (36.39); 1991: 40.54; 1992: 28.38; 1993: 16.35;
1994: (16.54); 1995: 40.47; 1996: 1.06; 1997: 5.23; 1998: (5.00);

Best Quarter:
10/92-12/92
24.29%

Worst Quarter:
7/90-9/90
(43.75)%

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
----------------------------------------------------
Midas Special Equities Fund (5.00)% 3.44% 8.42%
Russell 2000 Index (2.57)% 11.87% 12.92%

5
<PAGE>

MIDAS U.S. AND OVERSEAS FUND
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 11.10; 1990: (8.61); 1991: 22.55; 1992: 2.57; 1993: 26.71;
1994: (13.12); 1995: 25.11; 1996: 5.34; 1997: 5.64; 1998: 1.18;

Best Quarter:
10/98-12/98
18.99%

Worst Quarter:
7/98-9/98
(24.43)%

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
---------------------------------------------------
Midas U.S. and Overseas Fund 1.18% 4.12% 6.94%
MSCI World Index 24.34% 15.68% 10.66%

DOLLAR RESERVES
________________________________________________________________________________
Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 8.58; 1990: 7.36; 1991: 5.38; 1992: 3.15; 1993: 2.44;
1994: 3.39; 1995: 4.99; 1996: 4.74; 1997: 4.96; 1998: 4.69;

Best Quarter:
1/89-3/89
2.08%

Worst Quarter:
4/93-6/93
0.58%

For information on the Fund's 7-day yield, call toll-free 1-800-400-MIDAS
(6432)

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
----------------------------------------------------------------
Dollar Reserves 4.69% 4.55% 4.95%
LAMMI 4.95% 4.79% 5.19%

6
<PAGE>

FEES AND EXPENSES OF THE FUNDS

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the following tables. Shareholder fees are paid out of
your account. Annual Fund operating expenses are paid out of Fund assets, so
their effect is included in the share price.

Shareholder Fees
(fees paid directly from your investment)

Maximum Sales Charge (Load) Imposed on Purchases...........................NONE
Maximum Deferred Sales Charge (Load).......................................NONE
Maximum Sales Charge (Load) Imposed on Reinvested Dividends................NONE
Redemption Fee within 30 days of purchase
(all Funds except Dollar Reserves).......................................1.00%

Annual Fund Operating Expenses
(expenses as % of average daily net assets that are deducted from Fund assets)
<TABLE>
<CAPTION>

Total Fee Waiver
Distribu- annual and
tion and Fund Expense
Manage- service Other operating Reimburse- Net
ment fees (12b-1) fees expenses * expenses ment Expenses
------------ ---------------- ------------- -------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Midas Fund 1.00% 0.25% 1.08% 2.33% 0.00 0.00
Midas Investors 1.00% 0.25%** 2.32% 3.57%** 0.00 0.00
Midas Magic 1.00% 0.25% 8.02% 9.27% 7.29% 1.98%***
Midas Special Equities Fund 0.87% 1.00% 1.55% 3.42% 0.00 0.00
Midas U.S. and Overseas Fund 1.00% 0.25%** 1.33% 2.58%** 0.00 0.00
Dollar Reserves 0.50% 0.25% 0.55% 1.30% 0.00 0.00
<FN>
* Includes the reimbursement by each Fund to Midas Management
Corporation for accounting and other administrative services which are
authorized by the Board of Directors. These services may vary over
time, therefore, the amount of the reimbursement may fluctuate.
** Reflects a contractual distribution fee waiver that will continue
through May 1, 2000. Without such waiver, distribution and service fee
and total annual Fund operating expenses would have been 1.00% and
4.32%, respectively, for Midas Investors and 1.00% and 3.33%,
respectively, for Midas U.S. and Overseas Fund.
*** Reflects a contractual obligation by Midas Management Corporation to
waive and/or reimburse the Fund through December 31, 1999 to the extent
total annual Fund operating expenses exceed 1.90% of average daily net
assets, excluding certain expenses which totaled 0.08% in 1998.
</FN>
</TABLE>

EXAMPLE:
This example assumes that you invest $10,000 in each of the Funds for the time
periods indicated and then redeem all of your shares at the end of those
periods. This Example also assumes that your investment has a 5% return each
year and that the Funds' operating expenses remain the same (except in the cases
footnoted below). Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
One Year Three Years Five Years Ten Years
---------------------------------------------------
Midas Fund $236 $727 $1,245 $2,666
Midas Investors* $360 $1,242 $2,136 $4,426
Midas Magic* $201 $2,030 $3,707 $7,310
Midas Special Equities Fund $345 $1,051 $1,779 $3,703
Midas U.S. and Overseas Fund* $261 $955 $1,672 $3,571
Dollar Reserves $132 $412 $713 $1,568

* The first year expenses in each of the time periods indicated reflect expense
waivers by contractual agreement.

<PAGE>

PRINCIPAL INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

MIDAS FUND seeks primarily capital appreciation and protection against inflation
and, secondarily, current income. The Fund pursues its objective by
investing primarily in domestic or foreign companies involved with gold,
silver, platinum or other natural resources and gold, silver and platinum
bullion. The Fund will invest at least 65% of its total assets in (i)
securities of companies involved, directly or indirectly, in the business
of mining, processing, fabricating, distributing or otherwise dealing in
gold, silver, platinum or other natural resources and (ii) gold, silver and
platinum bullion. Additionally, up to 35% of the Fund's total assets may be
invested in securities of companies that derive a portion of their gross
revenues, directly or indirectly, from the business of mining, processing,
fabricating, distributing or otherwise dealing in gold, silver, platinum or
other natural resources, in securities of selected growth companies, and in
securities issued by the U.S. Government, its agencies or
instrumentalities.

In making investments for the Fund, the investment manager may consider,
among other things, the ore quality of metals mined by a company, a
company's mining, processing and fabricating costs and techniques, the
quantity of a company's unmined reserves, quality of management, and
marketability of a company's equity or debt securities. Management will
emphasize the potential for growth of the proposed investment, although it
also may consider an investment's income generating capacity as well. A
stock is typically sold when, in the opinion of the portfolio management
team, its potential to meet the Fund's investment objective is limited or
exceeded by another potential investment. When seeking to achieve its
secondary objective of income, the Fund will normally invest in investment
grade fixed income securities.

The Fund may invest in certain derivatives such as options, futures and
forward currency contracts. Derivatives are financial instruments that
derive their values from other securities or commodities or that are based
on indices. The Fund also engage in leverage by borrowing money for
investment purposes. The Fund also may lend portfolio securities to other
parties and may engage in short-selling. Additionally, the Fund may invest
in special situations such as liquidations and reorganizations.

The Fund may, from time to time, under adverse market conditions take
temporary defensive positions and invest some or all of its assets in cash
and cash equivalents, money market securities of U.S. and foreign issuers,
short-term bonds, repurchase agreements, and convertible bonds. When the
Fund takes such a temporary defensive position, it may not achieve its
investment objective.

Principal Risks
________________________________________________________________________________

The Fund's investments are linked to the prices of gold, silver, platinum
and other natural resources. These prices can be influenced by a variety of
global economic, financial and political factors and may fluctuate
substantially over short periods of time and be more volatile than other
types of investments. Economic, political, or other conditions affecting
one or more of the major sources of gold, silver, platinum and other
natural resources could have a substantial effect on supply and demand in
countries throughout the world.

Resource mining by its nature involves significant risks and hazards. Even
when a resource mineralization is discovered, there is no guarantee that
the actual reserves of a mine will increase. Exploratory mining can last
over a number of years, incur substantial costs, and not lead to any new
commercial mining. Resource mining runs the risk of increased
environmental, labor or other costs in mining due to environmental hazards,
industrial accidents, labor disputes, discharge of toxic chemicals, fire,
drought, flooding and other natural acts. Changes in laws relating to
mining or resource production or sales could also substantially affect
resource values.

The Fund may use leverage and engage in short-selling and futures and
options strategies. Also, the Fund may invest up to 35% of its assets in
fixed income securities rated below investment grade, although it has no
current intention of investing more than 5% of its assets in such
securities during the coming year. These securities may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed income
securities.

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

MIDAS INVESTORS seeks long term capital appreciation in investments with the
potential to provide a hedge against inflation and preserve the purchasing
power of the dollar. Income is a secondary objective.

The Fund pursues its objective by investing primarily in gold, platinum and
silver bullion and a global portfolio of securities of companies involved
directly or indirectly in mining, processing or dealing in gold or other
precious metals. Generally, at least 65% of the Fund's total assets will be
invested in (i) equity securities (including common stocks, convertible
securities and

<PAGE>

warrants) of companies involved directly or indirectly in mining,
processing or dealing in gold or other precious metals, (ii) gold, platinum
and silver bullion, and (iii) gold coins. Additionally, the Fund may invest
up to 35% of its total assets in securities of companies that own or
develop natural resources and other basic commodities, securities of
selected growth companies, and securities issued by the U.S. Government,
its agencies or instrumentalities.

Natural resources include ferrous and non-ferrous metals (such as iron,
aluminum and copper), strategic metals (such as uranium and titanium),
hydrocarbons (such as coal, oil and natural gases), chemicals, forest
products, real estate, food products and other basic commodities. Selected
growth companies in which the Fund may invest typically have earnings or
tangible assets which are expected to grow faster than the rate of
inflation over time. A stock is typically sold when, in the opinion of the
portfolio management team, its potential to meet the Fund's investment
objective is limited, or exceeded by another potential investment. When
seeking to achieve its secondary objective of income, the Fund will
normally invest in investment grade fixed income securities.

Principal Risks
________________________________________________________________________________

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

MIDAS MAGIC seeks long term capital appreciation. The Fund seeks to achieve this
objective by investing primarily in equity securities. The Fund will
purchase primarily common stocks, which will be selected generally for
their potential for long term capital appreciation. Generally, the Fund
will invest in companies expected to achieve above-average growth, which
have small, medium or large capitalizations and whose earnings or revenue
prospects are improving as a result of management, technology, regulation,
financial structure, or other special situations (e.g. liquidations and
reorganizations) and in companies whose shares have upward price momentum.
The Fund will normally sell investments with valuations that unduly
increase risk levels or, no longer have desired upward price momentum.

In attempting to achieve capital appreciation, the Fund employs aggressive
and speculative investment strategies. The Fund may invest in certain
derivatives such as options, futures and forward currency contracts.
Derivatives are financial instruments that derive their values from other
securities or commodities or that are based on indices. The Fund also
engage in leverage by borrowing money for investment purposes. The Fund
also may lend portfolio securities to other parties and may engage in
short- selling. Additionally, the Fund may invest in special situations
such as liquidations and reorganizations.

<PAGE>

Principal Risks
________________________________________________________________________________

The Fund is subject to market risk related to fluctuations in the value of
the Fund's portfolio. A risk of investing in stocks is that their value
will go up and down reflecting stock market movements and you could lose
money. However, you also have the potential to make money. Also, investing
in stocks involves a greater risk of loss of income than bonds because
stocks need not pay dividends.

The Fund may use leverage and engage in short-selling and options and
futures transactions to increase returns. There is a risk that these
transactions sometimes may reduce returns or increase volatility. In
addition, derivatives, such as options and futures, can be illiquid and
highly sensitive to changes in their underlying security, interest rate or
index, and as a result can be highly volatile. A small investment in
certain derivatives could have a potentially large impact on the Fund's
performance.

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

MIDAS SPECIAL EQUITIES FUND seeks capital appreciation. The Fund invests
primarily in equity securities, often involving special situations and
emerging growth companies. The Fund seeks to invest in equity securities of
companies with optimal combinations of growth in earnings and other
fundamental factors, while also offering reasonable valuations in terms of
price/earnings, price/cash flow, price/sales and similar ratios. The Fund
may invest in domestic or foreign companies which have small, medium or
large capitalizations. The Fund may sell an investment when the value or
growth potential of the investment appears limited or exceeded by other
investment opportunities, when the issuer's investment no longer appears to
meet the Fund's investment objective, or when the Fund must meet
redemptions.

In attempting to achieve capital appreciation, the Fund employs aggressive
and speculative investment strategies. The Fund may invest in certain
derivatives such as options, futures and forward currency contracts.
Derivatives are financial instruments that derive their values from other
securities or commodities or that are based on indices. The Fund also
engage in leverage by borrowing money for investment purposes. The Fund
also may lend portfolio securities to other parties and may engage in
short-selling. Additionally, the Fund may invest in special situations such
as liquidations and reorganizations.

Principal Risks
________________________________________________________________________________

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

MIDAS U.S. AND OVERSEAS FUND seeks to obtain the highest possible total return
on its assets from long term growth of capital and from income. The Fund
may invest substantially all of its assets in equity securities of issuers
located in foreign countries with developed and/or emerging markets. The
Fund may invest a portion of its assets in debt securities and in a
combination of countries which include the U.S. and foreign markets.

<PAGE>

The Fund seeks to invest in equity securities of companies with optimal
combinations of growth in earnings and other fundamental factors, while
also offering reasonable valuations in terms of price/sales and similar
ratios. The Fund may sell an investment when the value or growth potential
of the investment appears limited or exceeded by other investment
opportunities, when the issuer's investment no longer appears to meet the
Fund's investment objective, or when the Fund must meet redemptions.

The Fund may invest in companies which have small, medium or large
capitalizations. The Fund may invest in certain derivatives such as
options, futures and forward currency contracts. Derivatives are financial
instruments that derive their values from other securities or commodities
or that are based on indices. The Fund also engage in leverage by borrowing
money for investment purposes. The Fund also may lend portfolio securities
to other parties and may engage in short-selling. Additionally, the Fund
may invest in special situations such as liquidations and reorganizations.

Principal Risks
________________________________________________________________________________

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

DOLLAR RESERVES seeks maximum current income consistent with preservation of
capital and maintenance of liquidity. The Fund invests exclusively in
obligations of the U.S. Government, its agencies and instrumentalities
("U.S. Government Securities"). The U.S. Government Securities in which the
Fund may invest include U.S. Treasury notes and bills and certain agency
securities that are backed by the full faith and credit of the U.S.
Government. The Fund also may invest without limit in securities issued by
U.S. Government agencies and instrumentalities that may have different
degrees of government backing as to principal or interest but which are not
backed by the full faith and credit of the U.S. Government.

The Fund is a money market fund and as such is subject to certain specific
SEC rule requirements. Among other things, the Fund is limited to investing
in U.S. dollar-denominated instruments with a remaining maturity of 397
days or less (as calculated pursuant to Rule 2a-7 under the Investment
Company Act of 1940 ("1940 Act")).

The Fund may invest in securities which have variable or floating rates of
interest. These securities pay interest at rates that are adjusted
periodically according to a specified formula, usually with reference to an
interest rate index or market interest rate. Variable and floating rate
securities are subject to changes in value based on changes in market
interest rates or changes in the issuer's or guarantor's creditworthiness.

The Fund may borrow money from banks for temporary or emergency purposes
(not for leveraging or investment) up to one-third of the Fund's total
assets.

The Fund may lend portfolio securities to borrowers for a fee. Securities
may only be lent if the Fund receives collateral equal to the market value
of the assets lent. Some risk is involved if a borrower suffers financial
problems and is unable to return the assets lent.

For additional principal risks associated with the Fund, please read
"Additional Principal Investment Risks" on page 11.

ADDITIONAL PRINCIPAL INVESTMENT RISKS

Some additional principal risks that apply to all of the Funds (except Dollar
Reserves) are:

Small Capitalization. Each Fund may invest in companies that are small or thinly
capitalized, and may have a limited operating history. A potential risk in
investing in small-cap stocks is that small-cap stocks are likely more
vulnerable than larger companies to adverse business or economic developments.
During broad market downturns, Fund values may fall further than that of funds

<PAGE>

investing in larger companies. Full development of small-cap companies takes
time, and for this reason each Fund should be considered a long term investment
and not a vehicle for seeking short term profit.

Foreign Investment. Midas U.S. and Overseas Fund will be, and each of the other
Funds can be, exposed to the unique risks of foreign investing. Political
turmoil and economic instability in the countries in which a Fund invests could
adversely affect the value of your investment. Also, if the value of any foreign
currency in which a Fund's investment is denominated declines relative to the
U.S. dollar, the value and total return of your investment in the Fund may
decline as well. Foreign investments, particularly investments in emerging
markets, carry added risks due to the potential for inadequate or inaccurate
financial information about companies, political disturbances, and wider
fluctuations in currency exchange rates.

Non-Diversification. Each Fund is non-diversified which means that the
proportion of the Fund's assets that may be invested in the securities of a
single issuer is not limited by the 1940 Act. A "diversified" investment company
is required by the 1940 Act, generally, with respect to 75% of its total assets,
to invest not more than 5% of its assets in the securities of a single issuer.
As a result, a Fund may hold a smaller number of issuers than if it were
diversified. If this situation occurs, investing in the Fund could involve more
risk than investing in a fund that holds a broader range of securities because
changes in the financial condition of a single issuer could cause greater
fluctuation in the Fund's total return.

Short-selling and Options and Futures Transactions. Each Fund may engage in
short-selling and options and futures transactions to increase returns. There is
a risk that these transactions may reduce returns or increase volatility. In
addition, derivatives, such as options and futures, can be illiquid and highly
sensitive to changes in their underlying security, interest rate or index, and
as a result can be highly volatile. A small investment in certain derivatives
could have a potentially large impact on the Fund's performance.

Leverage. Leveraging (buying securities using borrowed money) exaggerates the
effect on NAV of any increase or decrease in the market value of a Fund's
investment. Money borrowed for leveraging is limited to 33 1/3 % of the value of
each Fund's total assets. These borrowings would be subject to interest costs
which may or may not be recovered by appreciation of the securities purchased.

Active Trading. Each Fund may trade securities actively. This strategy could
increase transaction costs, reduce performance and may result in taxable
distributions.

Illiquid Securities. Each Fund may invest up to 15% of their assets in illiquid
securities. A potential risk from investing in illiquid securities is that
illiquid securities cannot be disposed of quickly in the normal course of
business. Also, illiquid securities can be more difficult to value than more
widely traded securities and the prices realized from their sale may be less
than if such securities were more widely traded.

All of the Funds are subject to the principal risks associated with:

Interest Rates. Fixed-income investments are affected by interest rates to which
each of the Funds is exposed. When interest rates rise, the prices of bonds
typically fall in proportion to their maturities.

Lending. Pursuant to an agency arrangement with an affiliate of its Custodian,
all of the Funds may lend portfolio securities or other assets through such
affiliate for a fee to other parties. Each Fund's agreement requires that the
loans be continuously secured by cash, securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or any combination of cash
and such securities, as collateral equal at all times to at least the market
value of the assets lent. Loans of portfolio securities may not exceed one-third
of the Fund's total assets. Loans will be made only to borrowers deemed to be
creditworthy. Any loan made by a Fund will provide that it may be terminated by
either party upon reasonable notice to the other party.

Portfolio Management. The portfolio manager's skill in choosing appropriate
investments for the Funds will determine in large part whether the Funds achieve
their investment objectives.

Year 2000. Each Fund could be adversely affected if computer systems used by
Midas Management Corporation and the Funds' other service providers do not
properly process and calculate date-related information on and after January 1,
2000. Midas Management Corporation is working to avoid these problems and to
obtain assurances from other service providers that they are taking similar
steps. There could be a negative impact on the Funds. While the Funds cannot, at
this time, predict the degree of impact, it is possible that foreign markets
will be less prepared than U.S. markets.

<PAGE>

PORTFOLIO MANAGEMENT

Midas Management Corporation is the investment manager of each of the Funds. It
provides day-to-day advice regarding portfolio transactions for each Fund except
Midas Fund. The investment manager also furnishes or obtains on behalf of each
Fund all services necessary for the proper conduct of the Fund's business and
administration. Its address is 11 Hanover Square, New York, New York 10005.

Steven A. Landis is the portfolio manager of Dollar Reserves. He is also a
Senior Vice President of the investment manager and all the Funds. He has served
as portfolio manager of Dollar Reserves since April 1995. From 1993 to 1995, he
was an Associate Director of Proprietary Trading at Barclays de Zoete Wedd
Securities Inc.

Kjeld Thygesen is the portfolio manager of Midas Fund together with the
investment manager's Investment Policy Committee. The investment manager has
retained Lion Resource Management Limited ("Lion") to serve as subadviser and
provide day-to-day advice regarding portfolio transactions for Midas Fund. Mr.
Thygesen has served as a Managing Director of Lion since 1989. The subadviser's
address is 7 - 8 Kendrick Mews, London, U.K. SW7 3HG.

Bassett S. Winmill is the portfolio manager of Midas Magic. He is the Chief
Investment Officer of the investment manager and a director of all the Funds. He
has served as the portfolio manager of Midas Magic since February 2, 1999. He is
a member of the New York Society of Security Analysts, the Association for
Investment Management and Research and the International Society of Financial
Analysts.

Thomas B. Winmill is the portfolio manager of Midas Investors, Midas Special
Equities Fund, and Midas U.S. and Overseas Fund. He is the President and Chief
Executive Officer of the investment manager and the Funds. He has served as a
member of the investment manager's Investment Policy Committee since 1990. As a
member of the Investment Policy Committee, he helps establish general investment
guidelines. He has served as portfolio manager of these three Funds since May 1,
1998.

MANAGEMENT FEES

Each Fund pays a management fee to the investment manager at an annual rate
based on each Fund's average daily net assets. Midas Fund and Midas Magic pay
1.00% on the first $200 million of average daily net assets, declining
thereafter. Midas Investors, Midas Special Equities Fund, and Midas U.S. and
Overseas Fund pay 1.00% on the first $10 million of average daily net assets,
declining thereafter. Dollar Reserves pays 0.50% on the first $250 million of
average daily net assets, declining thereafter. For the fiscal year ended
December 31, 1998, Midas Fund, Midas Magic, Midas Investors, Midas Special
Equities Fund, Midas U.S. and Overseas Fund and Dollar Reserves paid the
investment manager a fee of 1.00%, 1.00%, 1.00%, 0.87%, 1.00% and 0.38%,
respectively, of the Fund's average daily net assets.

DISTRIBUTION AND SHAREHOLDER SERVICES

Investor Service Center, Inc. is the distributor of the Funds and provides
distribution and shareholder services. Each of the Funds has adopted a plan
under Rule 12b-1 and pays the distributor a 12b-1 fee as compensation for
distribution and shareholder services based on each Fund's average daily net
assets, as shown below. These fees are paid out of the Fund's assets on an
ongoing-basis. Over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.

Dollar Reserves, Midas Fund, and Midas Magic each pays a 12b-1 fee equal to
0.25% per annum of the Fund's average daily net assets. Based on a one year
contractual agreement which may be renewed, Midas Investors and Midas U.S. and
Overseas Fund each pays a 12b-1 fee equal to 0.25% per annum of the Fund's
average daily net assets. Without the agreement, each of these Funds would pay a
12b-1 fee equal to 1.00% per annum of the Fund's average daily net assets. Midas
Special Equities Fund pays a 12b-1 fee equal to 1.00% per annum of the Fund's
average daily net assets.

PURCHASING SHARES

Your price for Fund shares (except Dollar Reserves) is the Fund's next
calculation, after the order is placed, of NAV per share which is determined as
of the close of regular trading on the New York Stock Exchange (currently, 4
p.m. eastern time, unless weather, equipment failure or other factors contribute
to an earlier closing)) each day the exchange is open. With respect to Dollar
Reserves, orders are executed at the Fund's next calculation, after the order is
placed, of NAV per share which is determined as of 11 a.m. eastern time and as
of the close of regular trading on the New York Stock Exchange (currently, 4
p.m. eastern time, unless weather, equipment failure or other factors contribute
to an earlier closing) each day the exchange is open; purchase orders submitted
in proper form along with payment in Federal funds available to the Fund for
investment by 11 a.m. eastern time on any Fund business day will be of record at
the close of business that day and entitled to receive that day's dividends. The
Funds' shares will not be priced on the days on which the exchange is closed for
trading. Except for Dollar Reserves, the Funds' investments are valued based on
market value, or where market quotations are not readily available, based on
fair value as determined in good faith by or under the direction of the Fund's

<PAGE>

board. In the case of Dollar Reserves, the Fund values its portfolio securities
using the amortized cost method of valuation, under which the market value is
approximated by amortizing the difference between the acquisition cost and value
at maturity of an instrument on a straight-line basis over its remaining life.

Opening Your Account
________________________________________________________________________________

By check. Complete and sign the Account Application that accompanies this
prospectus and mail it, along with your check drawn to the order of the Fund, to
Investor Service Center, P.O. Box 219789, Kansas City, MO 64121-9789 (see
Minimum Investments below). Checks must be payable to Midas Funds in U.S.
dollars. Third party checks cannot be accepted. You will be charged a fee for
any check that does not clear.

By wire. To give the name(s) under which the account is to be registered, tax
identification number, the name of the bank sending the wire, and to be assigned
a Fund account number, call 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m.,
eastern time, on business days to speak with an Investor Service Representative.
You may then purchase shares by requesting your bank to transmit immediately
available funds ("Federal funds") by wire to: United Missouri Bank NA, ABA
#10-10-00695; for Account 98-7052-724-3; name of Fund. Your account number and
name(s) must be specified in the wire as they are to appear on the account
registration. You should then enter your account number on your completed
Account Application and promptly forward it to Investor Service Center, P.O. Box
219789, Kansas City, MO 64121-9789. This service is not available on days when
the Federal Reserve wire system is closed (see Minimum Investments below). For
automated 24 hour service, call toll-free 1-888-503-VOICE (8642) or visit
www.midasfunds.com.

Minimum Investments

Account Type Initial Subsequent
=============================== ==================== ======================
Regular $1,000 $100
- ------------------------------- -------------------- ----------------------
UGMA/UTMA $1,000 $100
- ------------------------------- -------------------- ----------------------
403(b) plan $1,000 $100
- ------------------------------- -------------------- ----------------------
Automatic Investment
Program $100 $100
- ------------------------------- -------------------- ----------------------

IRA Accounts Initial Subsequent
=============================== ==================== ======================
Traditional, Roth IRA $1,000 $100
- ------------------------------- -------------------- ----------------------
Spousal, Rollover IRA $1,000 $100
- ------------------------------- -------------------- ----------------------
Education $500 N/A
- ------------------------------- -------------------- ----------------------
IRA SEP/SAR-SEP IRA,
SIMPLE IRA $1,000 $100
- ------------------------------- -------------------- ----------------------

IRAs and retirement accounts. For more information about IRAs and 403(b)
accounts, please call 1-800-400-MIDAS (6432). For automated 24 hour service,
call toll-free 1-888-503-VOICE (8642) or visit www.midasfunds.com.

Midas Automatic Investment Program. With the Midas Automatic Investment Program,
you can establish a convenient and affordable long term investment program
through one or more of the plans explained below. Minimum investments above are
waived for each plan since they are designed to facilitate an automatic monthly
investment of $100 or more into your Fund account.

Midas Automatic Investment Program

Plan Description
- --------------------------------------------------------------------------------
Midas Bank Transfer Plan For making automatic investments from a
designated bank account.
- --------------------------------------------------------------------------------
Midas Salary Investing Plan For making automatic investments through
a payroll deduction.
- --------------------------------------------------------------------------------
Midas Government Direct For making automatic investments from
Deposit Plan your federal employment, Social Security
or other regular federal government check
- --------------------------------------------------------------------------------

Each of the Funds reserves the right to redeem any account if participation in
the program ends and the account's value is less than $1,000 due to redemptions.

For more information, or to request the necessary authorization form, call
1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m., eastern time, on business days
to speak with an Investor Service Representative. You may modify or terminate
the Midas Bank Transfer Plan at any time by written notice received 10 days
prior to the scheduled investment date. To modify or terminate the Midas Salary
Investing Plan or Midas Government Direct Deposit Plan, you should contact your
employer or the appropriate U.S. Government agency, respectively.

Adding to Your Account
________________________________________________________________________________

<PAGE>

a letter indicating the account number to which the subsequent investment is to
be credited, the name of the Fund and the name of the registered owner.

By Electronic Funds Transfer (EFT). The bank you designate on your Account
Application or Authorization Form will be contacted to arrange for the EFT,
which is done through the Automated Clearing House system, to your Fund account.
Requests received by 4 p.m., eastern time, will ordinarily be credited to your
Fund account on the next business day. Your designated bank must be an Automated
Clearing House member and any subsequent changes in bank account information
must be submitted in writing with a voided check (see Minimum Investments
above). To speak with an Investor Service Representative between 9 a.m. and 5
p.m.,eastern time, on business days, call 1-800-400-MIDAS (6432).

By wire. Subsequent investments by wire may be made at any time without having
to call by simply following the same wiring procedures under "Opening Your
Account" (see Minimum Investments above).

REDEEMING SHARES

Generally, you may redeem shares of the Funds by any of the methods explained
below. Requests for redemption should include the following information: name(s)
of the registered owner(s) of the account, account number, Fund name, amount you
want to sell (number of shares or dollar amount), and name and address or wire
information of person to receive proceeds.

In some instances, a signature guarantee may be required. Signature guarantees
protect against unauthorized account transfers by assuring that a signature is
genuine. You can obtain one from most banks or securities dealers, but not from
a notary public. For joint accounts, each signature must be guaranteed. Please
call us to ensure that your signature guarantee will be processed correctly.

By mail. Write to Investor Service Center, P.O. Box 219789, Kansas City, MO
64121-9789, and request the specific amount to be redeemed. The request must be
signed by the registered owner(s) and additional documentation may be required.

Dollar Reserves Check Writing Privilege for Easy Access. Upon request, you may
establish free, unlimited check writing privileges with only a $250 minimum per
check, through Dollar Reserves. In addition to providing easy access to your
account, it enables you to continue receiving dividends until your check is
presented for payment. You will be subject to a $20 charge for refused checks,
which may change without notice. To obtain checks, please call an Investor
Service Representative between 9 a.m. and 5 p.m., eastern time, on business
days, at 1-800-400-MIDAS (6432).

By telephone. To speak with an Investor Service Representative between 9 a.m.
and 5 p.m., eastern time, on business days, call 1-800- 400-MIDAS (6432) to
expedite the redemption of Fund shares. For automated 24 hour service, call
toll-free 1-888-503-VOICE (8642) or visit www.midasfunds.com.

For Electronic Funds Transfer (EFT). You may redeem as little as $250 worth of
shares by requesting EFT service. EFT proceeds are ordinarily available in your
bank account within two business days.

For Federal Funds Wire. If you are redeeming $1,000 or more worth of shares, you
may request that the proceeds be wired to your authorized bank.

Systematic Withdrawal Plan. If your shares have a value of at least $20,000 you
may elect automatic withdrawals from your Fund account, subject to a minimum
withdrawal of $100. All dividends and distributions are reinvested in the Fund.

ACCOUNT AND TRANSACTION POLICIES

Telephone privileges. The Fund accepts telephone orders from all shareholders
and guards against fraud by following reasonable precautions such as requiring
personal identification before carrying out shareholder requests. You could be
responsible for any loss caused by an order which later proves to be fraudulent
if the Fund followed reasonable procedures.

Assignment. You may transfer your Fund shares to another owner. For
instructions, call 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m., eastern
time, on business days to speak with an Investor Service Representative.

Redemption fee. The Fund is designed as a long term investment, and short term
trading is discouraged. If shares of the Fund held for 30 days or less are
redeemed or exchanged, the Fund will deduct a redemption fee equal to one
percent of the NAV of shares redeemed or exchanged. Redemption fees are retained
by the Fund.

<PAGE>

Redemption payment. Payment for shares redeemed will ordinarily be made within
three business days after receipt of the redemption request in proper form.
Redemption proceeds from shares purchased by check or EFT transfer may be
delayed 15 business days to allow the check or transfer to clear.

Accounts with below-minimum balances. You will be charged a $2.00 account fee if
your monthly balance is less than $500, unless you participate in the Midas
Automatic Investment Program. If your account balance falls below $500 as a
result of selling shares and not because of market action, the Fund reserves the
right, upon 45 days' notice, to close your account or request that you buy more
shares. The Fund reserves the right to close your account if you terminate your
participation in the Midas Funds Automatic Investment Program and your account
value is less than $1,000.

DISTRIBUTIONS AND TAXES

Distributions. Each Fund (except Dollar Reserves) pays its shareholders
dividends from any net investment income and distributes net capital gains that
it has realized, if any. Income dividends are normally declared and paid
annually and capital gains, if any, normally are paid once a year. Your
distributions will be reinvested in the Fund unless you instruct the Fund
otherwise.

Dollar Reserves declares dividends each day from net investment income
(investment income less expenses plus or minus all realized gains or losses on
the Fund's portfolio securities) to shareholders of record as of the close of
regular trading on the New York Stock Exchange on that day. Shareholders
submitting purchase orders in proper form and payment in Federal funds available
to the Fund for investment by 11 a.m. eastern time are entitled to receive that
day's dividend. Shares redeemed by 11 a.m. eastern time are not entitled to that
day's dividend, but proceeds of the redemption normally are available to
shareholders by Federal funds wire the same day. Shares redeemed after 11 a.m.
eastern time and before the close of regular trading on the New York Stock
Exchange are entitled to that day's dividend, and proceeds of the redemption
normally are available to shareholders by Federal funds wire the next Fund
business day. Distributions of declared dividends are made the last business day
of each month in additional shares of the Fund, unless you elect to receive
dividends in cash on the Account Application or so elect subsequently by calling
Investor Service Center at 1-800- 400-MIDAS (6432) between 9 a.m. and 5 p.m.,
eastern time, on business days. For Federal income tax purposes, such
distributions are generally taxable as ordinary income, whether or not a
shareholder receives such dividends in additional shares or elects to receive
cash. Any election will remain in effect until you notify Investor Service
Center to the contrary. The Fund does not expect to realize net long term
capital gains and thus does not anticipate payment of any long term capital gain
distributions.

Taxes. Generally, you will be taxed when you sell shares, exchange shares and
receive distributions (whether reinvested or taken in cash). Typically, your tax
treatment will be as follows:

Transaction Tax treatment
- ------------------------------------------ -------------------------------------
Income dividends Ordinary income
- ------------------------------------------ -------------------------------------
Short-term capital gains distributions Ordinary income
- ------------------------------------------ -------------------------------------
Long-term capital gains distributions Capital gains
- ------------------------------------------ -------------------------------------
Sales or exchanges of shares held for Capital gains or losses
more than one year
- ------------------------------------------ -------------------------------------
Sales or exchanges of shares held for Gains are treated as ordinary income;
one year or less losses are subject to special rules

Because income and capital gains distributions are taxable, you may want to
avoid making a substantial investment in a taxable account when the Fund is
about to declare a distribution which normally takes place in December. Each
January, the Fund issues tax information on its distributions for the previous
year. Any investor for whom the Fund does not have a valid taxpayer
identification number will be subject to backup withholding for taxes. The tax
considerations described in this section do not apply to tax-deferred accounts
or other non-taxable entities. Because everyone's tax situation is unique,
please consult your tax professional about your investment.

FINANCIAL HIGHLIGHTS

The following tables describe the Funds' performance for the past five years.
Each Fund's fiscal year end is December 31. The fiscal year end for Dollar
Reserves, Midas Investors, and Midas Magic was changed to December 31 during
1998. Previously, the fiscal year end for Dollar Reserves, Midas Investors, and
Midas Magic was June 30, June 30 and October 31, respectively. Certain
information reflects financial results for a single Fund share. Total return
shows how much your investment in the Fund would have increased (or decreased)
during each period, assuming you had reinvested all dividends and distributions.
The figures for the periods shown, with the exception of 1994 for Midas Fund,
Inc. and 1996 through 1998 for Midas Magic, Inc., were audited by Tait, Weller &
Baker, the Funds' independent accountants, whose report, along with the Funds'
financial statements, are included in the Annual Reports, which are available
upon request.

<PAGE>

MIDAS FUND
______________________________________________________________________________________________________________________________
Years Ended December 31,

1998* 1997* 1996* 1995* 1994
----- ----- ----- ----- ----
PER SHARE DATA
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.................... $2.11 $5.15 $4.25 $3.32 $4.16
----- ----- ----- ----- -----
Income from investment operations:
Net investment loss.................................... - (0.03) (0.05) (0.06) (0.05)
Net realized and unrealized gain (loss) (0.60) (3.01) 0.95 1.28 (0.67)
------ ------ ---- ---- ------
Total from investment operations.................. (0.60) (3.04) 0.90 1.22 (0.72)
------ ------ ---- ---- ------
Less distributions:
Distributions from net realized gains.................. - - - (0.29) (0.12)
------ ------
Total distributions............................... - - - (0.29) (0.12)
------ ------
Net asset value at end of period.......................... $1.51 $2.11 $5.15 $4.25 $3.32
===== ===== ===== ===== =====
TOTAL RETURN.............................................. (28.44)% (59.03)% 21.22% 36.73% (17.27)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)............... $87,841 $100,793 $200,457 $15,753 $7,052
Ratio of expenses to average net assets(a)(b)............. 2.33% 1.90% 1.63% 2.26% 2.15%
Ratio of net investment loss to average net assets(c)..... (0.02)% (0.72)% (0.92)% (1.47)% (1.26)%
Portfolio turnover rate .................................. 27% 50% 23% 48% 53%
<FN>
*Per share net investment loss and net realized and unrealized gain (loss) on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. (a) Expense ratio
prior to reimbursement by the investment manager was 2.15%, 1.83%, and 2.52% for
the years ended December 31, 1997, 1996, and 1995. (b) Expense ratio after
transfer agent and custodian credits was 2.30%, 1.88%, 1.61% and 2.25% for the
years ended December 31, 1998, 1997, 1996 and 1995. Prior to 1995, such credits
were reflected in the expense ratio. (c) Ratio prior to reimbursement by the
investment manager was (0.97)%, (1.12)%, and (1.73)% for the years ended
December 31, 1997, 1996, and 1995.
</FN>
</TABLE>

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

<TABLE>
<CAPTION>
MIDAS INVESTORS
___________________________________________________________________________________________________________________________________
Six Months Ended
December 31,* Years Ended June 30,

1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
PER SHARE DATA*
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period.............. $3.67 $7.14 $14.02 $13.13 $15.71 $16.98
----- ----- ------ ------ ------ ------
Income from investment operations:
Net investment loss.............................. (.04) (.12) (.25) (.22) -- (.11)
Net realized and unrealized gain (loss).......... (.81) (2.94) (4.36) 2.72 (1.13) (1.05)
----- ------ ------ ---- ------ ------
Total from investment operations.............. (.85) (3.06) (4.61) 2.50 (1.13) (1.16)
----- ------ ------ ---- ------ ------
Less distributions:
Distributions from net realized gains............ -- (.41) (2.27) (1.61) (1.45) (.11)
Total distributions........................... -- (.41) (2.27) (1.61) (1.45) (.11)
----- ------ ------ ------ -----
Net asset value at end of period.................... $2.82 $3.67 $7.14 $14.02 $13.13 $15.71
===== ===== ===== ====== ====== ======
TOTAL RETURN........................................ (23.16)% (43.45)% (37.81)% 21.01% (8.01)% (6.92)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)......... $6,293 $8,324 $15,217 $27,485 $29,007 $36,603
Ratio of expenses to average net assets(a)(b)....... 4.32%** 3.88% 2.94% 3.05% 2.93% 2.57%
Ratio of net investment income (loss) to
average net assets............................... (2.50)%** (2.40)% (2.06)% (1.61)% 0.01% (.68)%
Portfolio turnover rate............................. 36% 136% 37% 61% 158% 129%
<FN>
* Per share net investment loss and unrealized gain (loss) on investment have
been computed using the average number of shares outstanding. These computations
had no effect on net asset value per share. ** Annualized. (a) Ratios excluding
interest expense were 3.96%**, 3.57%, 2.77%, 2.93%, 2.82%, and 2.54%, for the
six months ended December 31, 1998 and the years ended June 30, 1998, 1997,
1996, 1995, and 1994, respectively. (b) Ratio after custodian credits was
4.30%** and 3.82% for the six months ended December 31, 1998 and the year ended
June 30, 1998, respectively.
</FN>
</TABLE>

<PAGE>

MIDAS MAGIC
____________________________________________________________________________________________________________________________________
Two Months Ended
December 31, Years Ended October 31,

1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
PER SHARE DATA*
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period............ $15.67 $24.92 $24.24 $18.73 $16.61 $16.32
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment loss............................ (.04) (.25) (.59) (.56) (.31) (.22)
Net realized and unrealized gain (loss)........ .98 (7.20) 6.17 6.07 2.43 .51
--- ------ ---- ---- ---- ---
Total from investment operations......... .94 (7.45) 5.58 5.51 2.12 .29
--- ------ ---- ---- ---- ----
Less distributions:
Distributions from net realized gains.......... (2.04) (1.80) (4.90) .00 .00 .00
------ ------ ------ --- --- ---
Total distributions......................... (2.04) (1.80) (4.90) .00 .00 .00
------ ------ ------ --- --- ---
Net asset value at end of period.................. $14.57 $15.67 $24.92 $24.24 $18.73 $16.61
====== ====== ====== ====== ====== ======
TOTAL RETURN...................................... 6.48% (31.29)% 27.55% 29.42% 12.76% 1.78%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)....... $548 $613 $1,771 $1,200 $774 $714
Ratio of expenses to average net assets(a)(b)..... 2.85%** 2.09% 2.81% 2.55% 2.30% 2.00%
Ratio of net investment loss to average net
assets(c)...................................... (1.54)** (1.38)% (2.65%) (2.23)% (1.77)% (1.38)%
Portfolio turnover rate........................... 0% 207% 44% 42% 30% 18%
<FN>
*Per share net investment loss and net realized and unrealized gain on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. **Annualized. (a)
Ratio prior to reimbursement by the investment manager was 18.84%**, 9.27%,
10.47%, 4.44%, 3.00%, and 2.82%, for the two months ended December 31, 1998 and
the years ended October 31, 1998, 1997, 1996, 1995, and 1994, respectively. (b)
Ratio after custodian fee credits was 1.97% for the year ended October 31, 1998.
There were no custodian fee credits for prior years. (c) Ratio prior to
reimbursement by the manager was (17.53)%**, (8.56)%, (10.31)%, (4.12)%,
(2.47)%, and (2.20)% for the two months ended December 31, 1998 and the years
ended October 31, 1998, 1997, 1996, 1995, and 1994, respectively.
</FN>
</TABLE>

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

MIDAS SPECIAL EQUITIES FUND
____________________________________________________________________________________________________________________________________
Years Ended December 31,

1998 1997 1996 1995 1994
---- ---- ---- ---- ----
PER SHARE DATA*
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.................... $23.38 $22.96 $25.42 $19.11 $23.13
------ ------ ------ ------ ------
Income from investment operations:
Net investment loss.................................... (.61) (.38) (.73) (.81) (.55)
Net realized and unrealized gain (loss)................ (.65) 1.55 0.99 8.51 (3.28)
----- ---- ---- ---- ------
Total from investment operations................. (1.26) 1.17 0.26 7.70 (3.83)
------ ---- ---- ---- ------
Less distributions:
Distributions from net realized gains.................. (1.78) (.75) (2.72) (1.39) (.19)
------ ----- ------ ------ -----
Net increase (decrease) in net asset value............. (3.04) .42 (2.46) 6.31 (4.02)
Net asset value at end of period.......................... $20.34 $23.38 $22.96 $25.42 $19.11
====== ====== ====== ====== ======
TOTAL RETURN.............................................. (5.00)% 5.23% 1.05% 40.47% (16.54)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)............... $36,807 $44,773 $49,840 $56,340 $45,614
Ratio of expenses to average net assets(a)(b)............. 3.42% 2.81% 2.92% 3.67% 2.92%
Ratio of net investment loss to average net assets........ (2.57)% (1.48)% (2.81)% (2.70)% (2.43)%
Portfolio turnover rate................................... 97% 260% 311% 319% 309%
<FN>
*Per share net investment loss and net realized and unrealized gain (loss) on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. (a) Expense ratio
excluding interest expense was 2.63%, 2.53%, 2.45% and 2.88% for the years ended
December 31, 1998, 1997, 1996 and 1995. (b) Expense ratio after custodian fee
credits was 3.41% and 2.79% for the years ended December 31, 1998 and 1997.
Prior to 1995, such credits were reflected in the expense ratio. There were no
custodian fee credits for 1996 and 1995.
</FN>
</TABLE>

<PAGE>

MIDAS U.S. AND OVERSEAS FUND
____________________________________________________________________________________________________________________________________
Years Ended December 31,

1998 1997 1996 1995 1994
---- ---- ---- ---- ----
PER SHARE DATA*
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period..................... $7.35 $7.91 $8.36 $7.08 $8.71
----- ----- ----- ----- -----
Income from investment operations:
Net investment loss..................................... (.10) (0.05) (0.24) (0.23) (0.13)
Net realized and unrealized gain (loss)................. .18 0.46 0.68 2.00 (1.01)
--- ---- ---- ---- ------
Total from investment operations........................ .08 0.41 0.44 1.77 (1.14)
--- ---- ---- ---- ------
Less distributions:
Distributions from net realized gains................... (.26) (0.97) (0.89) (0.49) (0.49)
----- ------ ------ ------ ------
Net asset value at end of period........................... $7.17 $7.35 $7.91 $8.36 $7.08
===== ===== ===== ===== =====
TOTAL RETURN............................................... 1.18% 5.64% 5.34% 25.11% (13.12)%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)................ $7,340 $8,446 $9,836 $9,808 $8,454
Ratio of expenses to average net assets(a)(b).............. 3.33% 3.28% 3.20% 3.55% 3.53%
Ratio of net investment loss to average net assets(c)...... (1.38)% (0.63)% (2.74)% (2.85)% (1.65)%
Portfolio turnover rate.................................... 69% 205% 255% 214% 212%
<FN>
* Per share net investment loss and net realized and unrealized gain (loss) on
investments have been computed using the average number of shares outstanding.
These computations had no effect on net asset value per share. (a) Expense ratio
prior to reimbursement by the investment manager was 3.84% and 3.59% for the
years ended December 31, 1995 and 1994. (b) Expense ratio after the custodian
fee credits was 3.22% and 3.49% for 1997 and 1995. Prior to 1995, such
reductions were reflected in the expense ratios. There were no custodian fee
credits for 1998 and 1996. (c) Ratio prior to reimbursement by the investment
manager was (3.14)% and (1.71)% for the years ended December 31, 1995 and 1994.
</FN>
</TABLE>

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

DOLLAR RESERVES
____________________________________________________________________________________________________________________________________
Six Months Ended
December 31, Years Ended June 30,

1998 1998 1997 1996 1995 1994
---- ---- ---- ------ ------ -----
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period.............. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income............................ .022 .048 .047 .047 .044 .026
Less distributions:
Distributions from net investment income......... (.022) (.047) (.047) .047 (.044) (.026)
Distributions from paid-in capital -- ($.001) -- -- -- --
-------
Net asset value at end of period.................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ======
TOTAL RETURN........................................ 4.46%** 4.88% 4.83% 4.81% 4.53% 2.59%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)......... $65,535 $61,602 $62,908 $62,467 $65,278 $76,351
Ratio of expenses to average net assets (a)......... .93%** .86% .71% .90% .89% .89%
Ratio of net investment income to average net 4.43%** 4.71% 4.73% 4.70% 4.41% 2.56%
assets (b).......................................
<FN>
** Annualized. (a) Ratio prior to waiver by the Investment Manager and
Distributor was 1.30%**, 1.20%, 1.21%, 1.40%, 1.39%, and 1.39% for the six
months ended December 31, 1998 and the years ended June 30, 1998, 1997, 1996,
1995, 1994, respectively. (b) Ratio prior to waiver by the Investment Manager
and Distributor was 4.06%**, 4.37%, 4.23%, 4.20%, 3.91%, and 2.06% for the six
months ended December 31, 1998, 1997, 1996, 1995, and 1994, respectively.
</FN>
</TABLE>

<PAGE>

FOR MORE INFORMATION

For investors who want more information on the Midas Funds, the following
documents are available free upon request:

o Annual/Semi-annual reports. Contains performance data, lists portfolio
holdings and contains a letter from the Funds' managers discussing recent
market conditions, economic trends and Fund strategies that significantly
affected the Funds' performance during the last fiscal year.

o Statement of Additional Information (SAI). Provides a fuller technical and
legal description of the Funds' policies, investment restrictions, and
business structure. A current SAI is on file with the Securities and Exchange
Commission (SEC) and is incorporated by reference (is legally considered part
of this prospectus).

To Obtain Information
- --------------------------------------------------------------------------------

o By telephone, call
1-800-400-MIDAS (6432) to speak to an Investor Service Representative, 9:00
a.m. to 5:00 p.m. on business days, eastern time or
1-888-503-VOICE (8642) for 24 hour, 7 day a week automated shareholder
services.

o By mail, write to:
Midas Funds
P.O. Box 219789
Kansas City, MO 64121-9789

o By e-mail, write to:
[email protected]

o On the Internet, Fund documents
can be viewed online or downloaded from:
SEC at http://www.sec.gov, or
Midas Funds at http://www.midasfunds.com

You can also obtain copies 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. The Funds' Investment Company Act file numbers are as follows:
811-04316 (Midas Fund); 811-00835 (Midas Investors); 811-04534 (Midas Magic);
811-04625 (Midas Special Equities Fund); 811-04741 (Midas U.S. and Overseas
Fund) and 811-02474 (Dollar Reserves).

<PAGE>

Prospectus dated July 12, 1999

Dollar Reserves, Inc. is a high quality no-load money market fund investing
exclusively in obligations of the U.S. Government, its agencies and
instrumentalities. The Fund's objective is to provide its shareholders maximum
current income consistent with preservation of capital and maintenance of
liquidity. There is no assurance that the Fund will achieve its investment
objective.

This prospectus contains information you should know about the Fund before you
invest. Please keep it for future reference.

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.

TABLE OF CONTENTS

INVESTMENT OBJECTIVE AND STRATEGY.............................................2

MAIN RISKS....................................................................2

PAST PERFORMANCE..............................................................2

FEES AND EXPENSES OF THE FUND.................................................3

PORTFOLIO MANAGEMENT..........................................................3

MANAGEMENT FEES...............................................................4

DISTRIBUTION AND SHAREHOLDER SERVICES.........................................4

PURCHASING SHARES.............................................................4

REDEEMING SHARES..............................................................5

ACCOUNT AND TRANSACTION POLICIES..............................................6

DIVIDENDS AND TAXES...........................................................6

FINANCIAL HIGHLIGHTS..........................................................7

<PAGE>

INVESTMENT OBJECTIVE AND STRATEGY

Dollar Reserves seeks maximum current income consistent with preservation of
capital and maintenance of liquidity.

The Fund invests exclusively in obligations of the U.S. Government, its agencies
and instrumentalities ("U.S. Government Securities"). The U.S. Government
Securities in which the Fund may invest include U.S. Treasury notes and bills
and certain agency securities that are backed by the full faith and credit of
the U.S. Government. The Fund also may invest without limit in securities issued
by U.S. Government agencies and instrumentalities that may have different
degrees of government backing as to principal or interest but which are not
backed by the full faith and credit of the U.S. Government.

The Fund is a money market fund and as such is subject to certain specific SEC
rule requirements. Among other things, the Fund is limited to investing in U.S.
dollar-denominated instruments with a remaining maturity of 397 days or less (as
calculated pursuant to Rule 2a-7 under the Investment Company Act of 1940).

The Fund may invest in securities which have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to an interest rate
index or market interest rate. Variable and floating rate securities are subject
to changes in value based on changes in market interest rates or changes in the
issuer's or guarantor's creditworthiness.

The Fund may borrow money from banks for temporary or emergency purposes (not
for leveraging or investment) up to one-third of the Fund's total assets.

Pursuant to an agency arrangement with an affiliate of its Custodian, the Fund
may lend portfolio securities or other assets through such affiliate for a fee
to other parties. The Fund's agreement requires that the loans be continuously
secured by cash, securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, or any combination of cash and such securities,
as collateral equal at all times to at least the market value of the assets
lent. Loans of portfolio securities may not exceed one-third of the Fund's total
assets. Loans will be made only to borrowers deemed to be creditworthy. Any loan
made by the Fund will provide that it may be terminated by either party upon
reasonable notice to the other party.

MAIN RISKS

Money Market Fund Risk. An investment in the Fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.

Interest Rates. The Fund's yield will vary in response to changes in interest
rates. Fixed-income investments are affected by interest rates to which the Fund
is exposed. When interest rates rise, the prices of bonds typically fall in
proportion to their maturities.

Lending. The Fund may lend portfolio securities to borrowers for a fee.
Securities may only be lent if the Fund received collateral equal to the market
value of the assets lent. Some risk is involved if a borrower suffers financial
problems and is unable to return the assets lent.

Portfolio Management. The portfolio manager's skill in choosing appropriate
investments for the Fund will determine in large part whether the Fund achieves
its investment objectives.

Year 2000. The Fund could be adversely affected if computer systems used by
Midas Management Corporation and the Fund's other service providers do not
properly process and calculate date-related information on and after January 1,
2000. Midas Management Corporation is working to avoid these problems and to
obtain assurances from other service providers that they are taking similar
steps.

<PAGE>

There could be a negative impact on the Fund. While the Fund cannot, at this
time, predict the degree of impact, it is possible that foreign markets will be
less prepared than U.S. markets.

PAST PERFORMANCE

The bar chart provides some indication of the risks of investing in the Fund by
showing changes in the Fund's performance from year to year. The bar chart
assumes reinvestment of dividends and distributions. As with all mutual funds,
past performance is not necessarily an indication of future performance. The
Lipper Analytical Money Market Index ("LAMMI") is an index that is unmanaged and
invested principally in financial instruments issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, with dollar-weighted average
maturities of less than 90 days and which intends to keep a constant net asset
value ("NAV").

Year-by-year total return as of 12/31 each year

[graphic omitted]

1989: 8.58; 1990: 7.36; 1991: 5.38; 1992: 3.15; 1993: 2.44;
1994: 3.39; 1995: 4.99; 1996: 4.74; 1997: 4.96; 1998: 4.69;

Best Quarter: 1/89-3/89 = 2.08%, Worst Quarter: 4/93-6/93 = 0.58%

For information on the Fund's 7-day yield, call toll-free 1-800-400-MIDAS
(6432).

Average annual total return for the periods ended 12/31/98

1 Year 5 Years 10 Years
---------------------------------------------------------------
Dollar Reserves 4.69% 4.55% 4.95%
LAMMI 4.95% 4.79% 5.19%

<PAGE>

FEES AND EXPENSES OF THE FUND

Shareholder Fees
(fees paid directly from your investment)

Maximum Sales Charge (Load) Imposed on Purchases............................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Maximum Sales Charge (Load) Imposed on Reinvested Dividends.................NONE
Redemption Fee within 30 days of purchase...................................NONE

Annual Fund Operating Expenses
(expenses as % of average daily net assets that are deducted from Fund assets)

Management fees............................................................0.50%
Distribution and service (12b-1) fees......................................0.25%
Other expenses.............................................................0.55%
Total annual Fund operating expenses.......................................1.30%

<TABLE>
<CAPTION>
EXAMPLE:
One Three Five Ten
Year Years Years Years
<S> <C> <C> <C> <C>
The example assumes that you invest $10,000 in the Fund for
the time periods indicated and then redeem all of your
shares at the end of those periods. The example also assumes
that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these
assumptions your costs would be:..................................... $132 $412 $713 $1,568

- --------------------------------------------------------------------------------------------------------------------
</TABLE>

PORTFOLIO MANAGEMENT

Midas Management Corporation is the investment manager of the Fund. The
investment manager provides day-to-day advice regarding portfolio transactions
and furnishes or obtains on behalf of the Fund all services necessary for the
proper conduct of the Fund's business and administration. The investment manager
is located at 11 Hanover Square, New York, New York 10005.

<PAGE>

Steven A. Landis is the portfolio manager of the Fund. He is also a Senior Vice
President of the investment manager and the Fund. He has served as the portfolio
manager of the Fund since April 1995. From 1993 to 1995, he was an Associate
Director of Proprietary Trading at Barclays de Zoete Wedd Securities Inc.

MANAGEMENT FEES

Generally, the Fund pays the investment manager a management fee based on the
average daily net assets of the Fund, at the annual rate of 0.50% on the first
$250 million and declining thereafter as a percentage of average daily net
assets. For the fiscal year ended December 31, 1998, the Fund paid a fee of
0.38% of the Fund's average daily net assets.

DISTRIBUTION AND SHAREHOLDER SERVICES

Investor Service Center, Inc. provides the Fund's distribution and shareholder
services. The Fund has adopted a plan under Rule 12b-1 and pays the distributor
a 12b-1 fee as compensation for distribution and shareholder services based on
the Fund's average daily net assets. These fees are paid out of the Fund's
assets on an ongoing-basis. Over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
Dollar Reserves pays a 12b-1 fee equal to 0.25% per annum of the Fund's average
daily net assets.

PURCHASING SHARES

Your price for Fund shares is the Fund's next calculation, after the order is
placed, of NAV per share which is determined as of 11 a.m. eastern time and as
of the close of regular trading on the New York Stock Exchange (currently, 4
p.m. eastern time, unless weather, equipment failure or other factors contribute
to an earlier closing) each day the exchange is open. Purchase orders submitted
in proper form along with payment in Federal funds available to the Fund for
investment by 11 a.m. eastern time on any Fund business day will be of record at
the close of business that day and entitled to receive that day's dividends. The
Fund's shares will not be priced on the days on which the exchange is closed for
trading. The Fund values its portfolio securities using the amortized cost
method of valuation, under which the market value is approximated by amortizing
the difference between the acquisition cost and value at maturity of an
instrument on a straight-line basis over its remaining life.

Opening Your Account
- --------------------------------------------------------------------------------

By check. Complete and sign the Account Application that accompanies this
prospectus and mail it, along with your check drawn to the order of Dollar
Reserves, to Investor Service Center, P.O. Box 219789, Kansas City, MO
64121-9789 (see Minimum Investments below). Checks must be payable to the Fund
in U.S. dollars. Third party checks cannot be accepted. You will be charged a
fee for any check that does not clear.

By wire. To give the name(s) under which the account is to be registered, tax
identification number, the name of the bank sending the wire, and to be assigned
a Fund account number, call 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m.,
eastern time, on business days to speak with an Investor Service Representative.
You may then purchase shares by requesting your bank to transmit immediately
available funds ("Federal funds") by wire to: United Missouri Bank NA, ABA
#10-10-00695; for Account 98-7052-724-3; Dollar Reserves. Your account number
and name(s) must be specified in the wire as they are to appear on the account
registration. You should then enter your account number on your completed
Account Application and promptly forward it to Investor Service Center, P.O. Box
219789, Kansas City, MO 64121-9789. This service is not available on days when
the Federal Reserve wire system is closed (see Minimum Investments below). For
automated 24 hour service, call toll-free 1-888-503-VOICE (8642) or visit
www.midasfunds.com.

Minimum Investments

Account Type Initial Subsequent
==================================== ================== ==================
Regular $1,000 $100
- ------------------------------------ ------------------ ------------------
UGMA/UTMA $1,000 $100
- ------------------------------------ ------------------ ------------------
403(b) plan $1,000 $100
- ------------------------------------ ------------------ ------------------
Automatic Investment
Program $100 $100
- ------------------------------------ ------------------ ------------------

IRA Accounts Initial Subsequent
==================================== ================== ==================
Traditional, Roth IRA $1,000 $100
- ------------------------------------ ------------------ ------------------
Spousal, Rollover IRA $1,000 $100
- ------------------------------------ ------------------ ------------------
Education $500 N/A
- ------------------------------------ ------------------ ------------------
IRA SEP/SAR-SEP IRA,
SIMPLE IRA $1,000 $100
- ------------------------------------ ------------------ ------------------

<PAGE>

Midas Automatic Investment Program

The Fund reserves the right to redeem any account if participation in the
program ends and the account's value is less than $1,000 due to redemptions.

Adding to Your Account
- --------------------------------------------------------------------------------

By check. Complete a Midas Funds FastDeposit form and mail it, along with your
check, drawn to the order of the Fund, to Investor Service Center, P.O. Box
219789, Kansas City, MO 64121-9789 (see Minimum Investments above). If you do
not use that form, include a letter indicating the account number to which the
subsequent investment is to be credited, the name of the Fund, and the name of
the registered owner.

By Electronic Funds Transfer (EFT). The bank you designate on your Account
Application or Authorization Form will be contacted to arrange for the EFT,
which is done through the Automated Clearing House system, to your Fund account.
Requests received by 4 p.m., eastern time, will ordinarily be credited to your
Fund account on the next business day. Your designated bank must be an Automated
Clearing House member and any subsequent changes in bank account information
must be submitted in writing with a voided check (see Minimum Investments
above). To speak with an Investor Service Representative between 9 a.m. and 5
p.m., eastern time, on business days, call 1-800-400-MIDAS (6432).

By wire. Subsequent investments by wire may be made at any time without having
to call by simply following the same wiring procedures under "Opening Your
Account" (see Minimum Investments above).

REDEEMING SHARES

Generally, you may redeem shares of the Fund by any of the methods explained
below. Requests for redemption should include the following information:

o name(s) of the registered owner(s) of the account
o account number
o Fund name
o amount you want to sell (number of shares or dollar amount)
o name and address or wire information of person to receive proceeds

Check Writing Privilege for Easy Access. Upon request, you may establish free,
unlimited check writing privileges with only a $250 minimum per check. In
addition to providing easy access to your account, it enables you to continue
receiving dividends until your check is presented for payment. You will be
subject to a $20 charge for refused checks, which may change without notice. To
speak with an Investor Service Representative between 9 a.m. and 5 p.m., eastern
time, on business days, call 1-800-400-MIDAS (6432). For

<PAGE>

automated 24 hour service, call toll-free 1-888-503-VOICE (8642) or visit
www.midasfunds.com.

By telephone. To speak with an Investor Service Representative between 9 a.m.
and 5 p.m., eastern time, on business days, call 1-800- 400-MIDAS (6432) to
expedite the redemption of Fund shares. For automated 24 hour service, call
1-888-503-VOICE (8642) or visit www.midasfunds.com.

By EFT. You may redeem as little as $250 worth of shares by requesting EFT
service. EFT proceeds are ordinarily available in your bank account within two
business days.

By wire. You may wire money to begin accruing income on your investment as soon
as possible. For an initial investment by wire, you must first telephone
Investor Service Center at 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m.,
eastern time, on business days, to give the name(s) under which the account is
to be registered, tax identification number and the name of the bank sending the
wire, and to be assigned a Dollar Reserves account number. You may then purchase
shares by requesting your bank to transmit immediately available funds ("Federal
funds") by wire to: United Missouri Bank NA, ABA# 10-10- 00695; for Account
98-7052-724-3; Dollar Reserves. Your account number and name(s) must be
specified in the wire as they are to appear on the account registration. You
should then enter your account number on your completed Account Application and
promptly forward it to Investor Service Center, P.O. Box 219789, Kansas City, MO
64121-9789. This service is not available on days when the Federal Reserve wire
system is closed. Subsequent investments by wire may be made at any time without
having to call Investor Service Center by simply following the same wiring
procedures.

ACCOUNT AND TRANSACTION POLICIES

Assignment. You may transfer your Fund shares to another owner. For
instructions, call 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m., eastern
time, on business days, to speak with an Investor Service Representative.

Accounts with below-minimum balances. You will be charged a $2.00 account fee if
your monthly balance is less than $500, unless you participate in the Midas
Automatic Investment Program. If your account balance falls below $500 as a
result of selling shares and not because of market action, the Fund reserves the
right, upon 45 days' notice, to close your account or request that you buy more
shares. The Fund reserves the right to close your account if you terminate your
participation in the Midas Automatic Investment Program and your account value
is less than $1,000.

DIVIDENDS AND TAXES

Dividends. The Fund declares dividends each day from net investment income
(investment income less expenses plus or minus all realized gains or losses on
the Fund's portfolio securities) to shareholders of record as of the close of
regular trading on the New York Stock Exchange on that day. Shareholders
submitting purchase orders in proper form and payment in Federal funds available
to the Fund for investment by 11 a.m. eastern time are entitled to receive that
day's dividend. Shares redeemed by 11 a.m. eastern time are not entitled to that
day's dividend, but proceeds of the redemption normally are available to
shareholders by Federal funds wire the same day. Shares redeemed after 11 a.m.
eastern time and before the close of regular trading on the New York Stock
Exchange are entitled to that day's dividend, and proceeds of the redemption
normally are available to shareholders by Federal funds wire the next Fund
business day. Distributions of declared dividends are made the last business day
of each month in additional shares of the Fund, unless you elect to receive
dividends in cash on the Account Application or so elect subsequently by calling
Investor Service Center at 1-800-400-MIDAS (6432) between 9 a.m. and 5 p.m.,
eastern time, on business days. For Federal income tax purposes, such
distributions are generally taxable as ordinary income, whether or not a
shareholder receives such dividends in additional shares or

<PAGE>

elects to receive cash. Any election will remain in effect until you notify
Investor Service Center to the contrary. The Fund does not expect to realize net
long term capital gains and thus does not anticipate payment of any long term
capital gain distributions.

Taxes. Generally, you will be taxed when you sell shares, exchange shares and
receive distributions (whether reinvested or taken in cash). Typically, your tax
treatment will be as follows:

Each January, the Fund issues tax information on its distributions for the
previous year. Any investor for whom the Fund does not have a valid taxpayer
identification number will be subject to backup withholding for taxes. The tax
considerations described in this section do not apply to tax-deferred accounts
or other non-taxable entities. Because everyone's tax situation is unique,
please consult your tax professional about your investment.

FINANCIAL HIGHLIGHTS

This table describes the Fund's performance for the past five years. In 1998,
the fiscal year end changed to December 31. Previously, the fiscal year end was
June 30. Certain information reflects financial results for a single Fund share.
Total return shows how much your investment in the Fund would have increased
during each period, assuming you had reinvested all dividends and distributions.
The figures for the periods shown were audited by Tait, Weller & Baker, the
Fund's independent accountants, whose report, along with the Fund's financial
statements, are included in the Annual Report, which is available upon request.
<TABLE>
<CAPTION>
Six Months Ended
December 31, Years Ended June 30,

1998 1998 1997 1996 1995 1994
---- ---- ---- ------ ------ -----
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period.............. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income............................ .022 .048 .047 .047 .044 .026
Less distributions:
Distributions from net investment income......... (.022) (.047) (.047) .047 (.044) (.026)
Distributions from paid-in capital -- ($.001) -- -- -- --
-------
Net asset value at end of period.................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ======
TOTAL RETURN........................................ 4.46%** 4.88% 4.83% 4.81% 4.53% 2.59%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted)......... $65,535 $61,602 $62,908 $62,467 $65,278 $76,351
Ratio of expenses to average net assets (a)......... .93%** .86% .71% .90% .89% .89%
Ratio of net investment income to average net 4.43%** 4.71% 4.73% 4.70% 4.41% 2.56%
assets (b).......................................
<FN>
** Annualized.
(a) Ratio prior to waiver by the Investment Manager and Distributor was
1.30%**, 1.20%, 1.21%, 1.40%, 1.39%, and 1.39% for the six months ended
December 31, 1998 and the years ended June 30, 1998, 1997, 1996, 1995,
1994, respectively.
(b) Ratio prior to waiver by the Investment Manager and Distributor was
4.06%**, 4.37%, 4.23%, 4.20%, 3.91%, and 2.06% for the six months ended
December 31, 1998, 1997, 1996, 1995, and 1994, respectively.
</FN>
</TABLE>

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FOR MORE INFORMATION

MIDAS FUND MIDAS SPECIAL EQUITIES FUND
MIDAS INVESTORS MIDAS U.S. AND OVERSEAS FUND
MIDAS MAGIC DOLLAR RESERVES

For investors who want more information on Dollar Reserves or any of the other
Midas Funds, the following documents are available free upon request:

o Annual/Semi-annual reports. Contains performance data, lists portfolio
holdings and contains a letter from the Fund's managers discussing recent
market conditions, economic trends and Fund strategies that significantly
affected the Fund's performance during the last fiscal year.

o Statement of Additional Information (SAI). Provides a fuller technical and
legal description of the Fund's policies, investment restrictions, and
business structure. A current SAI is on file with the Securities and Exchange
Commission (SEC) and is incorporated by reference (is legally considered part
of this prospectus).

To Obtain Information
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o By telephone, call
1-800-400-MIDAS (6432) to speak to an Investor Service Representative, 9:00
a.m. to 5:00 p.m., eastern time, on business days or 1-888-503-VOICE (8642)
for 24 hour, 7 day a week automated shareholder services.

o By mail, write to:
Dollar Reserves
P.O. Box 219789
Kansas City, MO 64121-9789

o By e-mail, write to:
[email protected]

o On the Internet, Fund documents
can be viewed online or downloaded from:
SEC at http://www.sec.gov, or
Midas Funds at http://www.midasfunds.com