ALLIANCE CAPITAL RESERVES, 485BPOS, 2000-10-30

ALLIANCE CAPITAL RESERVES
485BPOS, 2000-10-30

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<PAGE>

As filed with the Securities and Exchange
Commission on October 27, 2000

File Nos. 2-61564
811-2835

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.
Post-Effective Amendment No. 35 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF l940

Amendment No. 33 X

ALLIANCE CAPITAL RESERVES
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code:(800)
221-5672

EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)

Copies of communications to:
Thomas G. MacDonald, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004

It is proposed that this filing will become effective (Check
appropriate line)

immediately upon filing pursuant to paragraph (b)
X on November 1, 2000 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on (date) pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on (date) pursuant to paragraph (a)(2) of Rule
485.

<PAGE>

If appropriate, check the following box:

_____ This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

<PAGE>

For more information about the Fund, the following documents are available upon
request:

o Annual/Semi-Annual Reports to Shareholders

The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.

o Statement of Additional Information (SAI)

The Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Fund's SAI is incorporated
by reference into (and is legally part of) this Prospectus.

You may request a free copy of a current annual/semi-annual report or the SAI,
or make inquiries concerning the Fund, by contacting your broker or other
financial intermediary, or by contacting Alliance:

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096

By phone: For Information and Literature:
(800) 824-1916

Or you may view or obtain these documents from the Secur ities and Exchange
Commission:

o Call the Commission at 1-202-942-8090 for information on the operation of
the Public Reference Room.

o Reports and other information about the Fund are available on the EDGAR
Database on the Commission's Internet site at http://www.sec.gov

o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at [email protected], or by writing the
Commission's Public Reference Section, Wash. DC 20549-0102

On the Internet: www.sec.gov

You may also find more information about Alliance and the Fund on the Internet
at: www.Alliancecapital.com

--------------------------------------------------
Table of Contents
-----------------
RISK/RETURN SUMMARY ........................... 2
FEES AND EXPENSES OF THE FUND ................. 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS ............. 3
Investment Objectives and Strategies ....... 3
Risk Considerations ........................ 4
MANAGEMENT OF THE FUND ........................ 4
PURCHASE AND SALE OF SHARES ................... 5
How The Fund Values Its Shares ............. 5
How To Buy Shares .......................... 5
How To Sell Shares ......................... 5
Other ...................................... 5
DIVIDENDS, DISTRIBUTIONS, AND TAXES ........... 6
DISTRIBUTION ARRANGEMENTS ..................... 6
GENERAL INFORMATION ........................... 6
FINANCIAL HIGHLIGHTS .......................... 7
--------------------------------------------------

File No. 811-2835
ACRPRO1100

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

Alliance
Capital
Reserves

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

Prospectus
November 1, 2000

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.

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

The Fund's investment adviser is Alliance Capital Management L.P., a
global investment manager providing diversified services to institutions and
individuals through a broad line of investments including more than 100 mutual
funds.

--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
--------------------------------------------------------------------------------

The following is a summary of certain key information about the Fund. You
will find additional information about the Fund, including a detailed
description of the risks of an investment in the Fund, after this summary.

Objectives: The investment objectives of the Fund are--in the following
order of priority--safety of principal, excellent liquidity, and maximum current
income to the extent consistent with the first two objectives.

Principal Investment Strategy: The Fund is a "money market fund" that
seeks to maintain a stable net asset value of $1.00 per share. The Fund pursues
its objectives by investing in a portfolio of high-quality, U.S.
dollar-denominated money market securities.

Principal Risks: The principal risks of investing in the Fund are:

o Interest Rate Risk. This is the risk that changes in interest rates will
adversely affect the yield or value of the Fund's investments in debt
securities.

o Credit Risk. This is the risk that the issuer or guarantor of a debt
security will be unable or unwilling to make timely interest or principal
payments, or to otherwise honor its obligations. The degree of risk for a
particular security may be reflected in its credit rating. Credit risk includes
the possibility that any of the Fund's investments will have its credit ratings
downgraded.

Another important thing for you to note:

An investment in the Fund is not a deposit in a bank and 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.

PERFORMANCE AND BAR CHART INFORMATION

The performance table shows the Fund's average annual total returns and
the bar chart shows the Fund's annual total returns. The table and the bar chart
provide an indication of the historical risk of an investment in the Fund by
showing:

o the Fund's average annual total returns for one, five, and 10 years; and

o changes in the Fund's performance from year to year over 10 years.

The Fund's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for the Fund by calling
(800) 221-9513 or your financial intermediary.

PERFORMANCE TABLE

1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
4.40% 4.72% 4.60%
--------------------------------------------------------------------------------

BAR CHART

[The following table was depicted as a bar chart in the printed material.]

7.70% 5.62% 3.34% 2.46% 3.33% 5.14% 4.58% 4.77% 4.71% 4.40%

90 91 92 93 94 95 96 97 98 99

Calendar Year End

Through 9/30/00, the year to date unannualized return for the Fund was
4.11%. During the period shown in the bar chart, the highest return for a
quarter was 1.89% (quarter ending March 31, 1990) and the lowest return for a
quarter was 0.60% (quarter ending September 30, 1993).

2
<PAGE>

--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
--------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets) and
Example

The example is to help you compare the cost of investing in the Fund with the
cost of investing in other funds. It 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. It also assumes that your investment has a 5% return each year,
the Fund's operating expenses stay the same, and all dividends and distributions
are reinvested. Your actual costs may be higher or lower.

ANNUAL FUND OPERATING EXPENSES EXAMPLE
-------------------------------------- --------------------------
Management Fees............... .46% 1 Year............ $102
Distribution (12b-1) Fees..... .25% 3 Years........... $318
Other Expenses................ .29% 5 Years........... $552
---- 10 Years.......... $1,225
Total Operating Expenses...... 1.00%

--------------------------------------------------------------------------------
OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND RISKS
--------------------------------------------------------------------------------

This section of the Prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Fund.

Please note:

o Additional descriptions of the Fund's strategies and investments, as
well as other strategies and investments not described below, may be found in
the Fund's Statement of Additional Information or SAI.

o There can be no assurance that the Fund will achieve its investment
objectives.

Investment Objectives and Strategies

As a money market fund, the Fund must meet the requirements of Securities
and Exchange Commission Rule 2a-7. The Rule imposes strict requirements on the
investment quality, maturity and diversification of the Fund's investments.
Under that Rule, the Fund's investments must each have a remaining maturity of
no more than 397 days and the Fund must maintain an average weighted maturity
that does not exceed 90 days.

The Fund's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies, or instrumentalities;

o certificates of deposit, bankers' acceptances, and interest-bearing
savings deposits that are issued or guaranteed by (i) banks or savings and loan
associations that are members of the Federal Deposit Insurance Corporation and
have total assets of more than $1 billion, or (ii) foreign branches of U.S.
banks and U.S. branches of foreign banks that have total assets of more than $1
billion (or, if not rated, determined by Alliance to be of comparable quality);

o high-quality commercial paper (or, if not rated, determined by Alliance
to be of comparable quality) issued by U.S. or foreign companies and
participation interests in loans made to companies that issue such commercial
paper;

o adjustable rate obligations;

o asset-backed securities;

o restricted securities (i.e., securities subject to legal or contractual
restrictions on resale); and

o repurchase agreements that are fully collateralized.

3
<PAGE>

acceptances, and interest bearing savings deposits, issued by U.S. banks
(including their foreign branches) and U.S. branches of foreign banks subject to
the same regulation as U.S. banks. For the purposes of this investment policy,
neither all financial companies as a group nor all utility companies as a group
are considered a single industry.

Risk Considerations

The Fund's principal risks are interest rate risk and credit risk. Because
the Fund invests in short-term securities, a decline in interest rates will
affect the Fund's yields as these securities mature or are sold and the Fund
purchases new short-term securities with lower yields. Generally, an increase in
interest rates causes the value of a debt instrument to decrease. The change in
value for shorter-term securities is usually smaller than for securities with
longer maturities. Because the Fund invests in securities with short maturities
and seeks to maintain a stable net asset value of $1.00 per share, it is
possible, though unlikely, that an increase in interest rates would change the
value of your investment.

Credit risk is the possibility that a security's credit rating will be
downgraded or that the issuer of the security will default (fail to make
scheduled interest and principal payments). The Fund invests in highly-rated
securities to minimize credit risk.

The Fund may invest up to 10% of its net assets in illiquid securities,
including illiquid restricted securities. Investments in illiquid securities may
be subject to liquidity risk, which is the risk that, under certain
circumstances, particular investments may be difficult to sell at an
advantageous price. Illiquid restricted securities also are subject to the risk
that the Fund may be unable to sell the security due to legal or contractual
restrictions on resale.

The Fund's investments in U.S. dollar-denominated obligations (or credit
and liquidity enhancements) of foreign branches of U.S. banks, U.S. branches of
foreign banks, and commercial paper of foreign companies may be subject to
foreign risk. Foreign securities issuers are usually not subject to the same
degree of regula tion as U.S. issuers. Reporting, accounting, and auditing
standards of foreign countries differ, in some cases, significantly from U.S.
standards. Foreign risk includes nationalization, expropriation, or confiscatory
taxation, political changes or diplomatic developments that could adversely
affect a Fund's investments.

The Fund also is subject to management risk because it is an actively
managed portfolio. Alliance will apply its investment techniques and risk
analyses in making investment decisions for the Fund, but there is no guarantee
that its techniques will produce the intended result.

--------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------

The Fund's investment adviser is Alliance Capital Management L.P., 1345
Avenue of the Americas, New York, New York 10105. Alliance is a leading
international investment adviser managing client accounts with assets as of June
30, 2000 totaling more than $388 billion (of which more than $185 billion
represented assets of investment companies). As of June 30, 2000, Alliance
managed retirement assets for many of the largest public and private employee
benefit plans (including 29 of the nation's FORTUNE 100 companies), for public
employee retirement funds in 33 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide. The 52
registered investment companies managed by Alliance, comprising 122 separate
investment portfolios, currently have more than 6.1 million shareholder
accounts.

Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 2000, the Fund paid
Alliance .46% as a percentage of average daily net assets.

Pursuant to the Advisory Agreement, unless changed by a vote of the Fund's
shareholders, the Adviser will reimburse the Fund to the extent that the Fund's
aggregate operating expenses exceed 1% of its average daily net assets for any
fiscal year.

Alliance makes significant payments from its own resources, which include
the management fees paid by the Fund, to compensate your broker-dealer,
depository institutions, or other persons for providing distribution assistance
and administrative services and to otherwise promote the sale of Fund shares,
including paying for the preparation, printing, and distribution of prospectuses
and sales literature or other promotional activities.

4
<PAGE>

--------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
--------------------------------------------------------------------------------

How The Fund Values Its Shares

The Fund's net asset value, or NAV, which is the price at which shares of
the Fund are sold and redeemed, is expected to be constant at $1.00 per share,
although this price is not guaranteed. The NAV is calculated at 12:00 Noon and
4:00 p.m., Eastern time, on each Fund business day (i.e., each weekday exclusive
of days the New York Stock Exchange or the banks in Massachusetts are closed).

To calculate NAV, the Fund's assets are valued and totaled, liabilities
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. The Fund values its securities at their amortized cost. This
method involves valuing an instrument at its cost and thereafter applying a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the investment.

How To Buy Shares

o Initial Investment

You may purchase the Fund's shares by instructing your Account Executive
to invest in the Fund in connection with your brokerage account.

You also may purchase the Fund's shares directly from Alliance Fund
Services, Inc., or AFS. To obtain an Application Form, please telephone AFS
toll-free at (800) 237-5822. In addition, you may obtain information about the
Application Form, purchasing shares, or other Fund procedures by calling this
number.

Minimum Investment Amounts

o Initial $1,000
o Subsequent $100
o Minimum Maintenance Amount $500

These minimums do not apply to shareholder ac counts maintained through
financial intermediaries, which may maintain their own minimums.

o Subsequent Investments

By Check:

Mail or deliver your check or negotiable draft made payable to your
brokerage firm to your Account Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.

By Sweep:

Your brokerage firm may offer an automatic "sweep" for the Fund in the
operation of brokerage cash accounts for its customers. Contact your Account
Executive to determine if a sweep is available and what the sweep requirements
are.

How To Sell Shares

You may "redeem" your shares (i.e., sell your shares) on any Fund business
day by contacting your Account Executive. If you do not maintain your shares
through a financial intermediary and recently purchased shares by check or
electronic funds transfer, you cannot redeem your investment until the Fund is
reasonably satisfied the check or electronic funds transfer has cleared (which
may take up to 15 days).

You also may redeem your shares:

o By Sweep:

If your brokerage firm offers an automatic sweep arrangement, the sweep
will automatically transfer from your Fund account sufficient amounts to cover a
debit balance that occurs in your brokerage account for any reason.

o By Checkwriting:

With this service, you may write checks made payable to any payee. First,
you must fill out a signature card, which you may obtain from your Account
Executive. There is a charge for check reorders. The checkwriting service
enables you to receive the daily dividends declared on the shares to be redeemed
until the day that your check is presented for payment. You cannot write checks
for more than the principal balance (not including any accrued dividends) in
your account.

Other

The Fund has two transaction times each Fund business day, 12:00 Noon and
4:00 p.m., Eastern time. Investments receive the full dividend for a day if
Federal funds or bank wire monies are received by State Street Bank before 4:00
p.m., Eastern time, on that day.

5
<PAGE>

Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time. Redemption
proceeds are wired or mailed the same day or the next business day, but in no
event later than seven days, unless redemptions have been suspended or postponed
due to the determination of an "emergency" by the Securities and Exchange
Commission or to certain other unusual conditions. Shares do not earn dividends
on the day a redemption is effected.

The Fund offers a variety of shareholder services. For more information
about these services, telephone AFS at (800) 221-5672.

A transaction, service, administrative or other similar fee may be charged
by your financial broker-dealer, agent, financial representative or other
financial intermediary with respect to the purchase, sale or exchange of shares
made through these financial intermediaries. These financial intermediaries may
also impose requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed by the Fund.

--------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS, AND TAXES
--------------------------------------------------------------------------------

The Fund's net income is calculated at 4:00 p.m., Eastern time, each
business day and paid as dividends to shareholders. The dividends are
automatically invested in additional shares in your account. These additional
shares are entitled to dividends on following days resulting in compounding
growth of income. The Fund expects that its distributions will primarily consist
of net income, or, if any, short-term capital gains as opposed to long-term
capital gains. For Federal income tax purposes, the Fund's dividend
distributions of net income (or short-term capital gains) will be taxable to you
as ordinary income. Any long-term capital gains distributions may be taxable to
you as long-term capital gains. The Fund's distributions also may be subject to
certain state and local taxes.

Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its distributions for the
year.

--------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
--------------------------------------------------------------------------------

The Fund has adopted a plan under Securities and Exchange Commission Rule
12b-1 that allows it to pay asset-based sales charges or distribution and
service fees in connection with the distribution of its shares. The amount of
these fees is .25% as a percentage of aggregate average daily net assets.
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees.

--------------------------------------------------------------------------------
GENERAL INFORMATION
--------------------------------------------------------------------------------

During drastic economic or market developments, you might have difficulty
in reaching AFS by telephone, in which event you should issue written
instructions to AFS. AFS is not responsible for the authenticity of telephone
requests to purchase or sell shares. AFS will employ reasonable procedures to
verify that telephone requests are genuine and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.

6
<PAGE>

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years. Certain information
reflects financial information for a single Fund share. The total return in the
table represents the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming investment of all dividends and distributions).
The information has been audited by PricewaterhouseCoopers LLP, the Fund's
independent accountants, for the fiscal year ended June 30, 2000 and by other
independent accountants for years prior to June 30, 2000. The report of
PricewaterhouseCoopers LLP, along with the Fund's financial statements, appears
in the Fund's Annual Report, which is available upon request.

<TABLE>
<CAPTION>
Year Ended June 30
==========================================================
2000 1999 1998 1997 1996
======= ======= ====== ====== ======
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ ------ ------
Income from Investment Operations
Net investment income .............................. .049 .043 .047 .045 .047
------- ------- ------ ------ ------
Less: Dividends
Dividends from net investment income ............... (.049) (.043) (.047) (.045) (.047)
------- ------- ------ ------ ------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ====== ====== ======
Total Return
Total investment return based on net asset value (a) 4.97% 4.40% 4.83% 4.63% 4.82%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $10,182 $10,278 $8,015 $5,733 $4,804
Ratio to average net assets of:
Expenses, net of waivers and reimbursements ..... 1.00% .99% 1.00% 1.00% 1.00%
Expenses, before waivers and reimbursements ..... 1.00% .99% 1.00% 1.00% 1.00%
Net investment income ........................... 4.88% 4.29% 4.71% 4.53% 4.69%
</TABLE>

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

(a) Total investment return is calculated assuming an initial investment made
at net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total investment return
calculated for a period of less than one year is not annualized.

7
<PAGE>

(This page left intentionally blank.)

8
<PAGE>

<PAGE>

For more information about the Fund, the following documents are available upon
request:

o Annual/Semi-Annual Reports to Shareholders

The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.

o Statement of Additional Information (SAI)

By mail: c/o Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096

By phone: For Information and Literature: (800) 824-1916

Or you may view or obtain these documents from the Securities and Exchange
Commission:

o Call the Commission at 1-202-942-8090 for information on the operation of
the Public Reference Room.

o Reports and other information about the Fund are available on the
EDGAR Database on the Commission's Internet site at http://www.sec.gov

o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at [email protected], or by writing the
Commission's Public Reference Section, Wash. DC 20549-0102

On the Internet: www.sec.gov

You may also find more information about Alliance and the Fund on the Internet
at: www.Alliancecapital.com

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

Table of Contents
-----------------

RISK/RETURN SUMMARY ........................................................ 2
FEES AND EXPENSES OF THE FUND .............................................. 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS .......................................... 3
Investment Objectives and Strategies .................................... 3
Risk Considerations ..................................................... 4
MANAGEMENT OF THE FUND ..................................................... 4
PURCHASE AND SALE OF SHARES ................................................ 5
How The Fund Values Its Shares .......................................... 5
How To Buy Shares ....................................................... 5
How To Sell Shares ...................................................... 5
Other ................................................................... 6
DIVIDENDS, DISTRIBUTIONS, AND TAXES ........................................ 6
DISTRIBUTION ARRANGEMENTS .................................................. 6
GENERAL INFORMATION ........................................................ 6
FINANCIAL HIGHLIGHTS ....................................................... 7

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

File No. 811-2835
AMRPRO1100

--------------------------------------------------------------------------------
Alliance
Money
Reserves
--------------------------------------------------------------------------------

Prospectus
November 1, 2000

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.

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

<PAGE>

--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
--------------------------------------------------------------------------------

Objectives: The Fund's investment objective is maximum current income to
the extent consistent with safety of principal and liquidity.

Principal Risks: The principal risks of investing in the Fund are:

o Interest Rate Risk. This is the risk that changes in interest rates will
adversely affect the yield or value of the Fund's investments in debt
securities.

Another important thing for you to note:

PERFORMANCE AND BAR CHART INFORMATION

o the Fund's average annual total returns for one, five and ten years; and

o changes in the Fund's performance from year to year over 10 years.

The Fund's past performance does not necessarily indicate how it will
perform in the future.

You may obtain current seven-day yield information for the Fund by calling
(800) 221-9513 or your financial intermediary.

PERFORMANCE TABLE

1 Year 5 Year 10 Years
--------------------------------------------------------------------------------
4.39% 4.72% 4.62%
--------------------------------------------------------------------------------

BAR CHART

[GRAPHIC OMITTED]

[The following table was represented as a bar chart in the printed material.]

90 91 92 93 94 95 96 97 98 99
--------------------------------------------------------------------------------
7.97% 5.66% 3.32% 2.46% 3.26% 5.14% 4.59% 4.77% 4.71% 4.39%

Calendar Year End

Through 9/30/00, the year to date unannualized return for the Fund was
4.12%. During the period shown in the bar chart, the highest return for a
quarter was 1.91% (quarter ending March 31, 1990) and the lowest return for a
quarter was 0.59% (quarter ending September 30, 1993).

2
<PAGE>

--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
--------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder Fees (fees paid directly from your investment)

None

Annual Fund Operating Expenses (expenses that are deducted from Fund assets) and
Example

ANNUAL FUND OPERATING EXPENSES
================================================================================

Management Fees ....................................................... .50%
Distribution (12b-1) Fees ............................................. .25%
Other Expenses ........................................................ .26%
----
Total Operating Expenses .............................................. 1.01%
Waiver and/or Expense Reimbursement* .................................. (.01)%
----
Net Expenses .......................................................... 1.00%

EXAMPLE*
================================================================================

1 Year ................................................................ $ 102
3 Years ............................................................... $ 318
5 Years ............................................................... $ 552
10 Years .............................................................. $1,225

----------
* Reflects Alliance's contractual waiver (which continues from year to year
unless changed by vote of the Fund's shareholders) of a portion of its
advisory fee and/or reimbursement of a portion of the Fund's operating
expenses so that the Fund's expense ratio does not exceed 1.00%.

This section of the Prospectus provides a more complete description of the
investment objectives and principal strategies and risks of the Fund.

Please note:

o There can be no assurance that the Fund will achieve its investment
objectives.

Investment Objectives and Strategies

The Fund's investments may include:

o marketable obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;

o certificates of deposit and bankers' acceptances issued or guaranteed
by, or time deposits maintained at banks or savings and loan associations
(including foreign branches of U.S. banks or U.S. or foreign branches of foreign
banks) having total assets of more than $500 million;

o adjustable rate obligations;

o asset-backed securities;

o restricted securities (i.e., securities subject to legal or contractual
restrictions on resale); and

o repurchase agreements that are fully collateralized.

3
<PAGE>

The Fund does not invest more than 25% of its assets in securities of
issuers whose principal business activities are in the same industry. This
limitation does not apply to investments in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, or to bank obligations,
including certificates of deposit, bankers' acceptances, and interest bearing
savings deposits, issued by U.S. banks (including their foreign branches) and
U.S. branches of foreign banks subject to the same regulation as U.S. banks. For
the purposes of this investment policy, neither all financial companies as a
group nor all utility companies as a group are considered a single industry.

Risk Considerations

The Fund's investments in U.S. dollar-denominated obligations (or credit
and liquidity enhancements) of foreign banks, foreign branches of U.S. banks,
U.S. branches of foreign banks, and commercial paper of foreign companies may be
subject to foreign risk. Foreign securities issuers are usually not subject to
the same degree of regulation as U.S. issuers. Reporting, accounting, and
auditing standards of foreign countries differ, in some cases, significantly
from U.S. standards. Foreign risk includes nationalization, expropriation, or
confiscatory taxation, political changes or diplomatic developments that could
adversely affect a Fund's investments.

--------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------

Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 2000, the Fund paid
Alliance .49% as a percentage of average daily net assets, net of any waivers.
(See the "Annual Fund Operating Expenses" at the beginning of the Prospectus for
more information about fee waivers.)

4
<PAGE>

--------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
--------------------------------------------------------------------------------

How The Fund Values Its Shares

How To Buy Shares

o Initial Investment

You may purchase the Fund's shares by instructing your Account Executive
to invest in the Fund in connection with your brokerage account.

Minimum Investment Amounts
o Initial $1,000
o Subsequent $ 100
o Minimum Maintenance Amount $ 500

These minimums do not apply to shareholder accounts maintained through
financial intermediaries, which may maintain their own minimums.

o Subsequent Investments

By Check:

Mail or deliver your check or negotiable draft made payable to your
brokerage firm to your Account Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.

By Sweep:

How To Sell Shares

You also may redeem your shares:

o By Sweep:

o By Checkwriting:

Other

Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time. Redemption
proceeds are wired

5
<PAGE>

or mailed the same day or the next business day, but in no event later than
seven days, unless redemptions have been suspended or postponed due to the
determination of an "emergency" by the Securities and Exchange Commission or to
certain other unusual conditions. Shares do not earn dividends on the day a
redemption is effected.

The Fund offers a variety of shareholder services. For more information
about these services, telephone AFS at (800) 221-5672.

--------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS, AND TAXES
--------------------------------------------------------------------------------

Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its distributions for the
year.

--------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
GENERAL INFORMATION
--------------------------------------------------------------------------------

6
<PAGE>

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years. Certain information
reflects financial information for a single Fund share. The total return in the
table represents the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming investment of all dividends and distributions).
The information has been audited by PricewaterhouseCoopers, LLP, the Fund's
independent accountants for the fiscal year ended June 30, 2000 and by other
independent accountants for years prior to June 30, 2000. The report of
PricewaterhouseCoopers LLP, along with the Fund's financial statements, appears
in the Fund's Annual Report, which is available upon request.

<TABLE>
<CAPTION>
Year Ended June 30
------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------
Income from Investment Operations
Net investment income (a) .......................... .049 .043 .047 .045 .047
------- ------- ------- ------- ------
Less: Dividends
Dividends from net investment income ............... (.049) (.043) (.047) (.045) (.047)
------- ------- ------- ------- ------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======
Total Return
Total investment return based on net
asset value (b) ................................... 4.98% 4.39% 4.83% 4.64% 4.81%
Ratios/Supplemental Data
Net assets, end of year (in millions) .............. $ 1,812 $ 1,407 $ 1,166 $ 1,011 $ 755
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and reimbursements ..... 1.01% 1.02% 1.02% 1.06% 1.00%
Net investment income (a) ....................... 4.90% 4.28% 4.72% 4.55% 4.80%
</TABLE>

----------
(a) Net of expenses reimbursed or waived by the Adviser.

(b) Total investment return is calculated assuming an initial investment made
at net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total investment return
calculated for a period of less than one year is not annualized.

7
<PAGE>

(This page left intentionally blank.)

<PAGE>

(LOGO) ALLIANCE CAPITAL RESERVES
________________________________________________________________

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION
November 1, 2000
________________________________________________________________

TABLE OF CONTENTS
Page

The Fund....................................................
Investment Objectives and Policies..........................
Investment Restrictions.....................................
Management..................................................
Purchase and Redemption of Shares...........................
Additional Information......................................
Daily Dividends-Determination of Net Asset Value............
Taxes.......................................................
General Information.........................................
Financial Statements and Report of Independent Accountants..
Appendix-Commercial Paper and Bond Ratings..................

_______________________________________________________________

This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated November 1, 2000. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.

(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.

<PAGE>

_______________________________________________________________

THE FUND
_______________________________________________________________

Alliance Capital Reserves (the "Fund") is one of two
portfolios of Alliance Capital Reserves (the "Trust"), a
diversified, open-end investment company. The Trust was
reorganized as a Massachusetts business trust in October 1984,
having previously been a Maryland corporation since formation in
April 1978. The other portfolio, Alliance Money Reserves, is
described in a separate Prospectus and Statement of Additional
Information, which may be obtained from Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, toll free
(800) 221-5672.

_______________________________________________________________

INVESTMENT OBJECTIVES AND POLICIES
_______________________________________________________________

The Fund's objectives are - in the following order of
priority - safety of principal, excellent liquidity, and maximum
current income to the extent consistent with the first two
objectives. As a matter of fundamental policy, the Fund pursues
its objectives by maintaining a portfolio of high-quality money
market securities all of which, at the time of investment, have
remaining maturities not exceeding one year or less (which
maturities pursuant to Rule 2a-7 under the Investment Company Act
of 1940, as amended (the "Act"), may extend to 397 days, or such
greater length of time as may be permitted from time to time
pursuant to Rule 2a-7). Accordingly, the Fund's investments may
include the following diversified by maturities and issuers:

1. Marketable obligations of, or guaranteed by, the
United States Government, its agencies or instrumentalities.
These include issues of the U.S. Treasury, such as bills,
certificates of indebtedness, notes and bonds, and issues of
agencies and instrumentalities established under the authority of
an act of Congress. The latter issues include, but are not
limited to, obligations of the Bank for Cooperatives, Federal
Financing Bank, Federal Home Loan Bank, Federal Intermediate
Credit Banks, Federal Land Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Some of the
securities are supported by the full faith and credit of the U.S.
Treasury, others are supported by the right of the issuer to
borrow from the Treasury, and still others are supported only by
the credit of the agency or instrumentality.

2. Certificates of deposit, bankers' acceptances and
interest-bearing savings deposits issued or guaranteed by banks

<PAGE>

or savings and loan associations having total assets of more than
$1 billion and which are members of the Federal Deposit Insurance
Corporation or denominated in U.S. dollars and issued by U.S.
branches of foreign banks and foreign branches of U.S. banks, in
each case having total assets of at least $1 billion that are
believed by Alliance Capital Management L.P. (the "Adviser") to
be of quality equivalent to that of other such instruments in
which the Fund may invest. Certificates of deposit are receipts
issued by a depository institution in exchange for the deposit of
funds. The issuer agrees to pay the amount deposited plus
interest to the bearer of the receipt on the date specified on
the certificate. Such certificates may include, for example,
those issued by foreign subsidiaries of such banks which are
guaranteed by them. The certificate usually can be traded in the
secondary market prior to maturity. Bankers' acceptances
typically arise from short-term credit arrangements designed to
enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on
a bank by an exporter or an importer to obtain a stated amount of
funds to pay for specific merchandise. The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees
to pay the face value of the instrument on its maturity date.
The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the
going rate of discount for a specific maturity. Although
maturities for acceptances can be as long as 270 days, most
acceptances have maturities of six months or less.

3. Commercial paper, including variable amount master
demand notes and funding agreements, of prime quality i.e. rated
A-1+ or A-1 by Standard & Poor's Corporation ("Standard &
Poor's") or Prime-1 by Moody's Investors Service, Inc.
("Moody's") or, if not rated, issued by domestic and foreign
companies which have an outstanding debt issue rated AAA or AA by
Standard & Poor's, or Aaa or Aa by Moody's. For a description of
such ratings see the Appendix. Commercial paper consists of
short-term (usually from 1 to 270 days) unsecured promissory
notes issued by corporations in order to finance their current
operations. A variable amount master demand note represents a
direct borrowing arrangement involving periodically fluctuating
rates of interest under a letter agreement between a commercial
paper issuer and an institutional lender pursuant to which the
lender may determine to invest varying amounts. For a further
description of variable amount master demand notes, see Floating
and Variable Rate Obligations below. To the extent that the Fund
invests in such instruments, including commercial paper issued by
foreign companies meeting the rating criteria specified above,
consideration is given to their domestic marketability, the lower
reserve requirements generally mandated for overseas banking
operations, the possible impact of interruptions in the flow of
international currency transactions, potential political and

<PAGE>

social instability or expropriation, imposition of foreign taxes,
less government supervision of issuers, difficulty in enforcing
contractual obligations and lack of uniform accounting standards.

4. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the
counterparty at an agreed-upon future date. The resale price is
greater than the purchase price, reflecting an agreed-upon market
rate which is effective for the period of time the buyer's money
is invested in the security and which is not related to the
coupon rate on the purchased security. Repurchase agreements are
currently entered into with counterparties deemed to be
creditworthy by the Adviser, including broker-dealers, member
banks of the Federal Reserve System or "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S.
Government securities or with State Street Bank and Trust Company
("State Street Bank"), the Fund's Custodian. For each repurchase
agreement, the Fund requires continual maintenance of the market
value of underlying collateral in amounts equal to, or in excess
of, the agreement amount. While the maturities of the underlying
collateral may exceed 397 days, the term of the repurchase
agreement is always less than 397 days. In the event that a
counterparty defaulted on its repurchase obligation, the Fund
might suffer a loss to the extent that the proceeds from the sale
of the collateral were less than the repurchase price. If the
counterparty became bankrupt, the Fund might be delayed in
selling the collateral. Repurchase agreements often are for
short periods such as one day or a week, but may be longer.
Repurchase agreements not terminable within seven days will be
limited to no more than 10% of the Fund's assets.* Pursuant to
Rule 2a-7, a repurchase agreement is deemed to be an acquisition
of the underlying securities provided that the obligation of the
seller to repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
counterparty of a fully collateralized repurchase agreement is
deemed to be the issuer of the underlying securities.

Floating and Variable Rate Obligations. The Fund may
purchase floating and variable rate obligations, including
floating and variable rate demand notes and bonds. The Fund may
invest in variable and floating rate obligations whose interest
rates are adjusted either at predesignated periodic intervals or
whenever there is a change in the market rate to which the
security's interest rate is tied. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
____________________

* As used throughout the Prospectus and Statement of
Additional Information, the term assets shall refer to the
Funds total assets.

<PAGE>

obligations ordinarily having stated maturities in excess of 397
days, but which permit the holder to demand payment of principal
at any time, or at specified intervals not exceeding 397 days, in
each case upon not more than 30 days notice.

The Fund also invests in variable amount master demand
notes (which may have put features in excess of 30 days) which
are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct
arrangements between the Fund, as lender, and the borrower.
Because these obligations are direct lending arrangements between
the lender and the borrower, it is not contemplated that such
instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they
are redeemable at face value, plus accrued interest.
Accordingly, when these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to
redeem is dependent on the ability of the borrower to pay
principal and interest on demand.

Reverse Repurchase Agreements. While the Fund has not
previously and has no future plans to do so, it may enter into
reverse repurchase agreements, which involve the sale of money
market securities held by the Fund with an agreement to
repurchase the securities at an agreed-upon price, date and
interest payment.

Asset-backed Securities. The Fund may invest in asset-
backed securities that meet its existing diversification, quality
and maturity criteria. These securities must generally be rated.
Asset-backed securities are securities issued by special purpose
entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may be in the form of a
beneficial interest in a special purpose trust, limited
partnership interest, or commercial paper or other debt
securities issued by a special purpose corporation. Although the
securities may have some form of credit or liquidity enhancement
payments on the securities depend predominately upon collection
of the loans and receivables held by the issuer. Generally, the
special purpose entity is deemed to be the issuer of the asset-
backed security. However, the Fund is required to treat any
person whose obligations constitute ten percent or more of the
assets of the asset-backed security as the issuer of the portion
of the asset-backed security such obligations represent.

Illiquid Securities. The Fund may also invest up to 10%
of the value of its net assets in securities as to which a liquid
trading market does not exist. Such securities may include
securities that are not readily marketable, such as certain
securities that are subject to legal or contractual restrictions
on resale (other than those restricted securities determined to

<PAGE>

be liquid as described below) and repurchase agreements not
terminable within seven days. As to illiquid securities, the
Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Funds net
assets could be adversely affected.

Liquid Restricted Securities. The Fund may also
purchase restricted securities that are determined by the Adviser
to be liquid in accordance with procedures adopted by the
Trustees. Restricted securities are securities subject to
contractual or legal restrictions on resale, such as those
arising from an issuer's reliance upon certain exemptions from
registration under the Securities Act of 1933 (the "Securities
Act").

In recent years, a large institutional market has
developed for certain types of restricted securities including,
among others, private placements, repurchase agreements,
commercial paper, foreign securities and corporate bonds and
notes. These instruments are often restricted securities because
they are sold in transactions not requiring registration. For
example, commercial paper issues in which the Fund may invest
include, among others, securities issued by major corporations
without registration under the Securities Act in reliance on the
exemption from registration afforded by Section 3(a)(3) of such
Act and commercial paper issued in reliance on the private
placement exemption from registration which is afforded by
Section 4(2) of the Securities Act ("Section 4(2) paper").
Section 4(2) paper is restricted as to disposition under the
Federal securities laws in that any resale must also be made in
an exempt transaction. Section 4(2) paper is normally resold to
other institutional investors through or with the assistance of
investment dealers who make a market in Section 4(2) paper, thus
providing liquidity. Institutional investors, rather than
selling these instruments to the general public, often depend on
an efficient institutional market in which such restricted
securities can be readily resold in transactions not involving a
public offering. In many instances, therefore, the existence of
contractual or legal restrictions on resale to the general public
does not, in practice, impair the liquidity of such investments
from the perspective of institutional holders. In recognition of
this fact, the Staff of the Securities and Exchange Commission
(the "Commission") has stated that Section 4(2) paper may be
determined to be liquid by the Fund's Trustees, so long as
certain conditions, which are described below, are met.

In 1990, in part to enhance the liquidity in the
institutional markets for restricted securities, the Commission
adopted Rule 144A under the Securities Act to establish a safe
harbor from the Securities Act's registration requirements for

<PAGE>

resale of certain restricted securities to qualified
institutional buyers. Section 4(2) paper that is issued by a
company that files reports under the Securities Exchange Act of
1934 is generally eligible to be resold in reliance on the safe
harbor of Rule 144A. Pursuant to Rule 144A, the institutional
restricted securities markets may provide both readily
ascertainable values for restricted securities and the ability to
liquidate an investment in order to satisfy share redemption
orders on a timely basis. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted
securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at reasonable
prices. Rule 144A has already produced enhanced liquidity for
many restricted securities, and market liquidity for such
securities may continue to expand as a result of Rule 144A and
the consequent inception of the PORTAL System sponsored by the
National Association of Securities Dealers, Inc., an automated
system for the trading, clearance and settlement of unregistered
securities.

The Fund's Trustees have the ultimate responsibility for
determining whether specific securities are liquid or illiquid.
The Trustees have delegated the function of making day-to-day
determinations of liquidity to the Adviser, pursuant to
guidelines approved by the Trustees. The Adviser takes into
account a number of factors in determining whether a restricted
security being considered for purchase is liquid, including at
least the following:

(i) the frequency of trades and quotations for the
security;

(ii) the number of dealers making quotations to
purchase or sell the security;

(iii) the number of other potential purchasers of the
security;

(iv) the number of dealers undertaking to make a market
in the security;

(v) the nature of the security (including its
unregistered nature) and the nature of the marketplace
for the security (e.g., the time needed to dispose of
the security, the method of soliciting offers and the
mechanics of transfer); and

(vi) any applicable Commission interpretation or
position with respect to such types of securities.

<PAGE>

To make the determination that an issue of Section 4(2)
paper is liquid, the Adviser must conclude that the following
conditions have been met:

(i) the Section 4(2) paper must not be traded flat or
in default as to principal or interest; and

(ii) the Section 4(2) paper must be rated in one of the
two highest rating categories by at least two NRSROs, or
if only one NRSRO rates the security, by that NRSRO; if
the security is unrated, the Adviser must determine that
the security is of equivalent quality.

The Adviser must also consider the trading market for
the specific security, taking into account all relevant factors.

Following the purchase of a restricted security by the
Fund, the Adviser monitors continuously the liquidity of such
security and reports to the Trustees regarding purchases of
liquid restricted securities.

Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.

General. While there are many kinds of short-term
securities used by money market investors, the Fund, in keeping
with its primary investment objective of safety of principal,
generally restricts its portfolio to the types of investments
summarized above. As even the safest of securities involve some
risk, there can be no assurance, as is true with all investment
companies, that the Fund's objectives will be achieved. The
market value of the Fund's investments tends to decrease during
periods of rising interest rates and to increase during intervals
of falling rates.

Net income to shareholders is aided both by the Fund's
ability to make investments in large denominations and by its
efficiencies of scale. Also, the Fund may seek to improve
portfolio income by selling certain portfolio securities prior to
maturity in order to take advantage of yield disparities that
occur in money markets. The Fund's investment objectives may not
be changed without the affirmative vote of a majority of the
Fund's outstanding shares as defined below.

Except as otherwise provided, the Fund's investment
policies are not designated "fundamental policies" within the
meaning of the Act and may, therefore, be changed by the Trustees
of the Trust without a shareholder vote. However, the Fund will
not change its investment policies without contemporaneous
written notice to shareholders.

<PAGE>

Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule. To the extent that the Fund's limitations are more
permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.

Currently, pursuant to Rule 2a-7, the Fund may invest
only in U.S. dollar-denominated "Eligible Securities" (as that
term is defined in the Rule) that have been determined by the
Adviser to present minimal credit risks pursuant to procedures
approved by the Trustees. Generally, an Eligible Security is a
security that (i) has a remaining maturity of 397 days or less
and (ii) is rated, or is issued by an issuer with short-term debt
outstanding that is rated, in one of the two highest rating
categories by two nationally recognized statistical rating
organizations ("NRSROS") or, if only one NRSRO has issued a
rating, by that NRSRO (the "requisite NRSROs"). An unrated
security may also be an Eligible Security if the Adviser
determines that it is of comparable quality to a rated Eligible
Security pursuant to guidelines approved by the Trustees. A
description of the ratings of some NRSROs appears in Appendix A
attached hereto. Securities in which the Fund invests may be
subject to liquidity or credit enhancements. These securities
are generally considered to be Eligible Securities if the
enhancement or the issuer of the enhancement has received the
appropriate rating from the requisite NRSROs.

Under Rule 2a-7 the Fund may not invest more than five
percent of its assets in the first tier securities of any one
issuer other than the United States Government, its agencies and
instrumentalities. A first tier security is an Eligible Security
that has received a short-term rating from the requisite NRSROs
in the highest short-term rating category for debt obligations,
or is an unrated security deemed to be of comparable quality.
Government securities are also considered to be first tier
securities. In addition, the Fund may not invest in a security
that has received, or is deemed comparable in quality to a
security that has received, the second highest rating by the
requisite number of NRSROs (a "second tier security") if
immediately after the acquisition thereof the Fund would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.

<PAGE>

_______________________________________________________________

INVESTMENT RESTRICTIONS
_______________________________________________________________

The following restrictions may not be changed without
the affirmative vote of a majority of the Fund's outstanding
shares, which means the vote of (1) 67% or more of the shares
represented at a meeting at which more than 50% of the
outstanding shares are represented or (2) more than 50% of the
outstanding shares, whichever is less. If a percentage
restriction is adhered to at the time of an investment, a later
increase or decrease in percentage resulting from a change in
value of portfolio securities or in amount of the Funds assets
will not constitute a violation of that restriction.

The Fund:

1. May not purchase any security which has a maturity
date more than one year** from the date of the Fund's purchase;

2. May not invest more than 25% of its assets in the
securities of issuers conducting their principal business
activities in any one industry provided that for purposes of this
restriction (a) there is no limitation with respect to
investments in securities issued or guaranteed by the United
States Government, its agencies or instrumentalities,
certificates of deposit, bankers' acceptances and interest-
bearing savings deposits and (b) neither all finance companies as
a group nor all utility companies as a group are considered a
single industry;

3. May not invest more than 5% of its assets in the
securities of any one issuer*** (exclusive of securities issued
____________________

** Which maturity, pursuant to Rule 2a-7, may extend to 397
days, or such greater length of time as may be permitted
from time to time pursuant to Rule 2a-7.

*** As a matter of operating policy, pursuant to Rule 2a-7,
the Fund will invest no more than 5% of its assets in the
first tier (as defined in Rule 2a-7) securities of any one
issuer except that under Rule 2a-7, a Fund may invest up
to 25% of its total assets in the first tier securities of
a single issuer for a period of up to three business days.
Fundamental policy number (3) would give the Portfolio the
ability to invest, with respect to 25% of its assets, more
than 5% of its assets in any one issuer only in the event
Rule 2a-7 is amended in the future. Pursuant to Rule 2a-
7, acquisition of a fully collateralized repurchase
(footnote continued)

<PAGE>

or guaranteed by the United States Government, its agencies or
instrumentalities), except that up to 25% of the value of the
Fund's total assets may be invested without regard to such 5%
limitation;

4. May not invest in more than 10% of any one class of
an issuer's outstanding securities (exclusive of securities
issued or guaranteed by the United States Government, its
agencies or instrumentalities);

5. May not borrow money except from banks on a
temporary basis or via entering into reverse repurchase
agreements in aggregate amounts not to exceed 15% of the Fund's
assets and to be used exclusively to facilitate the orderly
maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and the Fund
will not purchase any investment while any such borrowings exist;

6. May not pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by the Fund except as may be necessary in connection with
any borrowing mentioned above, including reverse repurchase
agreements, and in an aggregate amount not to exceed 15% of the
Fund's assets;

7. May not make loans, provided that the Fund may
purchase money market securities and enter into repurchase
agreements;

8. May not enter into repurchase agreements if, as a
result thereof, more than 10% of the Fund's assets would be
subject to repurchase agreements not terminable within seven days
(which may be considered to be illiquid); or

9. May not (a) make investments for the purpose of
exercising control; (b) purchase securities of other investment
companies, except in connection with a merger, consolidation,
acquisition or reorganization; (c) invest in real estate (other
than money market securities secured by real estate or interests
therein or money market securities issued by companies which
invest in real estate, or interests therein), commodities or
commodity contracts, interests in oil, gas and other mineral
exploration or other development programs; (d) purchase
securities on margin; (e) make short sales of securities or
maintain a short position or write, purchase or sell puts, calls,
____________________

(footnote continued)
agreement is deemed to be the acquisition of the
underlying securities.

<PAGE>

straddles, spreads or combinations thereof; (f) invest in
securities of issuers (other than agencies and instrumentalities
of the United States Government) having a record, together with
predecessors, of less than three years of continuous operation if
more than 5% of the Fund's assets would be invested in such
securities; (g) purchase or retain securities of any issuers if
those officers and trustees of the Fund and employees of the
Adviser who own individually more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5%
of the securities of such issuer; or (h) act as an underwriter of
securities.

_______________________________________________________________

MANAGEMENT
_______________________________________________________________

Trustees and Officers

The business and affairs of the Fund are managed under
the direction of the Board of Trustees. The Trustees and
principal officers of the Fund and their principal occupations
during the past five years are set forth below. Unless otherwise
specified, the address of each such person is 1345 Avenue of the
Americas, New York, N.Y. 10105. Those Trustees whose names are
preceded by an asterisk are "interested persons" of the Trust as
determined under the Act. Each Trustee and officer is also a
director, trustee or officer of other registered investment
companies sponsored by the Adviser.

Trustees

DAVE H. WILLIAMS**** , 68, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
("ACMC")***** , sole general partner of the Adviser with which he
has been associated since prior to 1995.

JOHN D. CARIFA4, 55, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1995.

____________________

**** An "interested person" of the Fund as defined in the Act.

***** For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation,
the sole general partner of the Adviser, and to the
predecessor general partner of the Adviser of the same
name.

<PAGE>

SAM Y. CROSS, 73, was, since prior to 1995, Executive
Vice President of The Federal Reserve Bank of New York and
manager for foreign operations for The Federal Reserve System.
He is Executive-In-Residence at the School of International and
Public Affairs, Columbia University. He is also a director of
Fuji Bank and Trust Co. His address is 200 East 66th Street, New
York, New York 10021.

CHARLES H. P. DUELL, 62, is President of Middleton Place
Foundation with which he has been associated since prior to 1995.
He is also a Trustee Emeritus of the National Trust for Historic
Preservation and serves as Chairman of the Board of Architectural
Review, City of Charleston. His address is Middleton Place
Foundation, 4300 Ashley River Road, Charleston, South Carolina
29414.

WILLIAM H. FOULK, JR., 68, is an Investment Adviser and
an Independent Consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1995. He was
formerly Deputy Comptroller of the State of New York and, prior
thereto, Chief Investment Officer of the New York Bank for
Savings. His address is 2 Greenwich Plaza, Suite 100, Greenwich,
CT 06830.

DAVID K. STORRS, 56, is President and Chief Executive
Officer of Alternative Investment Group, LLC (an investment
firm). He was formerly President of The Common Fund (investment
management for educational institutions) with which he had been
associated since prior to 1995. His address is 65 South Gate
Lane, Southport, Connecticut 06490.

SHELBY WHITE, 62, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York
10022.

Officers

RONALD M. WHITEHILL - President, 62, is a Senior Vice
President of ACMC and President and Chief Executive Officer of
Alliance Cash Management Services with which he has been
associated since prior to 1995.

KATHLEEN A. CORBET - Senior Vice President, 40, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1995.

ANDREW M. ARAN - Senior Vice President, 43, is a Senior
Vice President of ACMC with which he has been associated since
prior to 1995.

<PAGE>

DREW A. BIEGEL - Senior Vice President, 49 is a Vice
President of Alliance Fund Distributors, Inc. ("AFD") which he
has been associated with since prior to 1995.

JOHN R. BONCZEK - Senior Vice President, 41, is a Senior
Vice President of AFD with which he has been associated since
prior to 1995.

DORIS T. CILIBERTI - Senior Vice President, 36, is a
Senior Vice President of AFD with which she has been associated
since prior to 1995.

ROBERT I. KURZWEIL - Senior Vice President, 49, is a
Vice President of AFD with which he has been associated since
prior to 1995.

WAYNE D. LYSKI - Senior Vice President, 59, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1995.

PATRICIA ITTNER - Senior Vice President, 49, is a Vice
President of AFD with which she has been associated since prior
to 1995.

RAYMOND J. PAPERA - Senior Vice President, 44, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1995.

KENNETH T. CARTY - Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1995.

JOHN F. CHIODI, Jr. - Vice President, 34, is a Vice
President of ACMC with which he has been associated since prior
to 1995.

MARIA R. CONA - Vice President, 45, is a Vice President
of ACMC with which she has been associated since prior to 1995.

JOSEPH DONA - Vice President, 39, is a Vice President of
ACMC with which he has been associated since prior to 1995.

WILLIAM J. FAGAN - Vice President, 38, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.

LINDA N. KELLEY - Vice President, 40, is an Assistant
Vice President of AFD with which she has been associated since
prior to 1995.

<PAGE>

JOSEPH R. LASPINA -Vice President, 40, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.

EDMUND P. BERGAN, Jr. - Secretary, 50, is a Senior Vice
President and the General Counsel of AFD and Alliance Fund
Services, Inc. ("AFS") with which he has been associated since
prior to 1995.

MARK D. GERSTEN - Treasurer and Chief Financial Officer,
50, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1995.

VINCENT S. NOTO - Controller, 35, is a Vice President of
AFS with which he has been associated since prior to 1995.

ANDREW L. GANGOLF - Assistant Secretary, 46, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since prior to 1995.

DOMENICK PUGLIESE - Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.

As of October 6, 2000, the Trustees and officers as
a group owned more than 1% of the shares of the Fund.

The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 2000, the
aggregate compensation paid to each of the Trustees during
calendar year 1999 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of registered
investment companies (and separate investment portfolios within
those companies) in the Alliance Fund Complex with respect to
which each of the Trustees serves as a director or trustee, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
pension or retirement benefits to any of its directors or
trustees.

<PAGE>

Total Number Total Number
of Funds in of Investment
the Alliance Portfolios
Total Fund Complex, Within the Funds,
Compensation Including the Including the
From the Fund, as to Fund, as to
Alliance Fund which the which the
Name of Aggregate Complex, Trustee is a Trustee is a
Trustee Compensation Including the Director or Director or
of the Fund From the Fund Fund Trustee Trustee
___________ ____________ _____________ _____________ _______________

Dave H. Williams $-0- $-0- 6 16
John D. Carifa $-0- $-0- 49 107
Sam Y. Cross $4,641 $ 15,750 3 14
Charles H.P. Duell $4,266 $ 15,000 3 14
William H. Foulk, Jr. $4,562 $246,413 45 102
David K. Storrs $4,263 $ 15,000 3 14
Shelby White $4,641 $ 15,750 3 14

The Adviser

The Fund's investment adviser is Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York
10105. The Adviser is a leading international adviser managing
client accounts with assets as of June 30, 2000 totaling more
than $388 billion (of which more than $185 billion represented
assets of investment companies). As of June 30, 2000, the
Adviser managed retirement assets for many of the largest public
and private employee benefit plans (including 29 of the nation's
FORTUNE 100 companies), for public employee retirement funds in
33 out of the 50 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide.
The 52 registered investment companies managed by the Adviser,
comprising 122 separate investment portfolios, currently have
approximately 6.1 million shareholder accounts.

Alliance Capital Management Corporation ("ACMC") is the
general partner of the Adviser and a wholly owned subsidiary of
the The Equitable Life Assurance Society of the United States
("Equitable"). Equitable, one of the largest life insurance
companies in the United States, is the beneficial owner of an
approximately 55.4% partnership interest in the Adviser.
Alliance Capital Management Holding L.P. ("Alliance Holding")
owns an approximately 41.9% partnership interest in the

<PAGE>

Adviser.****** Equity interests in Alliance Holding are traded
on the New York Stock Exchange in the form of units.
Approximately 98% of such interests are owned by the public and
management or employees of the Adviser and approximately 2% are
owned by Equitable. Equitable is a wholly owned subsidiary of
AXA Financial, Inc. ("AXA Financial"), a Delaware corporation
whose shares are traded on the New York Stock Exchange. AXA
Financial serves as the holding company for the Adviser,
Equitable and Donaldson, Lufkin & Jenrette, Inc., an integrated
investment and merchant bank. As of June 30, 1999, AXA, a French
insurance holding company, owned approximately 58.2% of the
issued and outstanding shares of common stock of AXA Financial.

Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Trust who
are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of the first $1.25 billion of the average daily
net value of the Fund's net assets, .49 of 1% of the next $.25
billion of such assets, .48 of 1% of the next $.25 billion of
such assets, .47 of 1% of the next $.25 billion of such assets,
.46 of 1% of the next $1 billion of such assets and .45 of 1% of
the average daily value of the Fund's net assets in excess of $3
billion. The fee is accrued daily and paid monthly under the
Advisory Agreement. The Adviser will reimburse the Fund to the
extent that its net expenses (excluding taxes, brokerage,
interest and extraordinary expenses) exceed 1% of its average
daily net assets for any fiscal year. For the fiscal years ended
June 30, 1998, 1999 and 2000, the Adviser received from the Fund
advisory fees of $31,190,832, $43,181,153 and $53,197,833,
respectively. In accordance with the Distribution Services
Agreement described below, the Fund may pay a portion of
advertising and promotional expenses in connection with the sale
of shares of the Fund. The Fund also pays for printing of
prospectuses and other reports to shareholders and all expenses
____________________

****** Until October 29, 1999, Alliance Holding served as the
investment adviser to the Fund. On that date, Alliance
Holding reorganized by transferring its business to the
Adviser. Prior thereto, the Adviser had no material
business operations. One result of the reorganization was
that the Advisory Agreement, then between the Fund and
Alliance Holding, was transferred to the Adviser by means
of a technical assignment, and ownership of Alliance Fund
Distributors, Inc. and Alliance Fund Services, Inc., the
Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Advisers.

<PAGE>

and fees related to registration and filing with the Commission
and with state regulatory authorities. The Fund pays all other
expenses incurred in its operations, including the Adviser's
management fees; custody, transfer and dividend disbursing
expenses; legal and auditing costs; clerical, administrative
accounting, and other office costs; fees and expenses of Trustees
who are not affiliated with the Adviser; costs of maintenance of
the Trust's existence; and interest charges, taxes, brokerage
fees, and commissions. As to the obtaining of clerical and
accounting services not required to be provided to the Fund by
the Adviser under the Advisory Agreement, the Fund may employ its
own personnel. For such services, it also may utilize personnel
employed by the Adviser; if so done, the services are provided to
the Fund at cost and the payments therefor must be specifically
approved in advance by the Trustees. The Fund paid to the
Adviser a total of $176,500, $178,000 and $184,000 in respect of
such services for the fiscal years ended June 30, 1998, 1999 and
2000, respectively.

The Fund has made arrangements with certain broker-
dealers, including Pershing, Division of Donaldson, Lufkin &
Jenrette Securities Corporation (Pershing), an affiliate of the
Adviser, whose customers are Fund shareholders pursuant to which
payments are made to such broker-dealers performing recordkeeping
and shareholder servicing functions. Such functions may include
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays fully disclosed and omnibus broker dealers
(including Pershing) for such services. The Fund may also pay
for the electronic communications equipment maintained at the
broker-dealers' offices that permits access to the Fund's
computer files and, in addition, reimburses fully-disclosed
broker-dealers at cost for personnel expenses involved in
providing such services. All such payments must be approved or
ratified by the Trustees. For the fiscal years ended June 30,
1998, 1999 and 2000, the Fund paid such broker-dealers a total of
$6,980,773, $14,426,435 and $19,353,826, respectively, a
substantial portion of which was paid to affiliates.

The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement for an additional
annual term was approved by the vote, cast in person by all the
Trustees of the Trust who neither were interested persons of the
Trust nor had any direct or indirect financial interest in the
Agreement or any related agreement, at a meeting called for that
purpose on June 5, 2000.

The Advisory Agreement remains in effect from year to
year provided that such continuance is specifically approved at
least annually by a vote of a majority of the outstanding shares

<PAGE>

of the Fund or by the Fund's Trustees including in either case
approval by a majority of the Trustees who are not parties to the
Advisory Agreement or interested persons as defined in the Act.
The Advisory Agreement may be terminated without penalty on 60
days' written notice at the option of either party or by a vote
of the outstanding voting securities of the Fund; it will
automatically terminate in the event of assignment. The Adviser
is not liable for any action or inaction with regard to its
obligations under the Advisory Agreement as long as it does not
exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.

Distribution Services Agreement

Rule 12b-1 under the Act permits an investment company
to directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan") with AFD (the "Distributor")
which applies to both series of the Trust. Pursuant to the Plan,
the Fund pays to the Distributor a Rule 12b-1 distribution
services fee which may not exceed an annual rate of .25 of 1% of
the Trust's (equal to each of its series') aggregate average
daily net assets. In addition, under the Agreement the Adviser
makes payments for distribution assistance and for administrative
and accounting services from its own resources which may include
the management fee paid by the Fund.

Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor and Donaldson, Lufkin &
Jenrette Securities Corporation and its Pershing Division,
affiliates of the Adviser, for distribution assistance and to
banks and other depository institutions for administrative and
accounting services, and (ii) otherwise promoting the sale of
shares of the Fund such as by paying for the preparation,
printing and distribution of prospectuses and other promotional
materials sent to existing and prospective shareholders and by
directly or indirectly purchasing radio, television, newspaper
and other advertising. In approving the Agreement the Trustees
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. During
the fiscal year ended June 30, 2000, the Fund made payments to
the Distributor for expenditures under the Agreement in amounts
aggregating $29,026,574 which constituted .25 of 1% at an annual
rate of the Fund's average daily net assets during the period,
and the Adviser made payments from its own resources as described
above aggregating $32,261,226. Of the $61,287,800 paid by the
Adviser and the Fund under the Agreement, $295,000 was paid for
advertising, printing and mailing of prospectuses to persons

<PAGE>

other than current shareholders (the Fund's pro rata share was
approximately $139,715); and $60,992,800 was paid to broker-
dealers and other financial intermediaries for distribution
assistance (the Fund's pro rata share was approximately
$28,886,859).

The administrative and accounting services provided by
banks and other depository institutions may include, but are not
limited to, establishing and maintaining shareholder accounts,
sub-accounting, processing of purchase and redemption orders,
sending confirmations of transactions, forwarding financial
reports and other communications to shareholders and responding
to shareholder inquiries regarding the Trust. As interpreted by
courts and administrative agencies, certain laws and regulations
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Fund's management based on the advice of
counsel, these laws and regulations do not prohibit such
depository institutions from providing other services for
investment companies such as the administrative and accounting
services described above. The Trustees will consider appropriate
modifications to the Trust's operations, including discontinuance
of payments under the Agreement to banks and other depository
institutions, in the event of any future change in such laws or
regulations which may affect the ability of such institutions to
provide the above-mentioned services.

The Treasurer of the Trust reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the Act) are committed to
the discretion of the disinterested Trustees then in office.

The Agreement became effective on July 22, 1992.
Continuance of the Agreement for an additional annual term was
approved by the vote, cast in person by all the Trustees of the
Trust who neither were interested persons of the Trust nor had
any direct or indirect financial interest in the Agreement or any
related agreement, at a meeting called for that purpose on
June 5, 2000. The Agreement may be continued annually thereafter
if approved by a majority vote of the Trustees who neither are
interested persons of the Fund nor have any direct or indirect
financial interest in the Agreement or in any related agreement,
cast in person at a meeting called for that purpose.

All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to

<PAGE>

the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Distributor. Any agreement with a qualifying broker-
dealer or other financial intermediary may be terminated without
penalty on not more than sixty days' written notice by a vote of
the majority of non-party Trustees, by a vote of a majority of
the outstanding shares of the Fund, or by the Distributor and
will terminate automatically in the event of its assignment.

The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.

_______________________________________________________________

PURCHASE AND REDEMPTION OF SHARES
_______________________________________________________________

Generally, shares of the Fund are sold and redeemed on a
continuous basis without sales or redemption charges at their net
asset value which is expected to be constant at $1.00 per share,
although this price is not guaranteed.

Accounts Not Maintained Through Financial Intermediaries

Opening Accounts -- New Investments

A. When Funds are Sent by Wire (the wire method permits
immediate credit)

1) Telephone the Fund toll-free at (800) 824-1916.
The Fund will ask for the name of the account as
you wish it to be registered, address of the
account, and taxpayer identification number (social
security number for an individual). The Fund will
then provide you with an account number.

<PAGE>

2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:

ABA 0110 0002 8
State Street Bank and Trust Company
Boston, MA 02101
Alliance Capital Reserves
DDA 9903-279-9

Your account name as registered with the Fund
Your account number as registered with the Fund

3) Mail a completed Application Form to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

B. When Funds are Sent by Check

1) Fill out an Application Form.

2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000),
payable to "Alliance Capital Reserves," to Alliance
Fund Services, Inc. as in A(3) above.

Subsequent Investments

A. Investments by Wire (to obtain immediate credit)

Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank") as
in A(2) above.

B. Investments by Check

Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Capital Reserves," to Alliance Fund
Services, Inc. as in A(3) above.

Include with the check or draft the "next investment"
stub from one of your previous monthly or interim account
statements. For added identification, place your Fund account
number on the check or draft.

<PAGE>

Investments Made by Check

Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the
Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.

PROCEEDS FROM ANY SUBSEQUENT REDEMPTION BY YOU OF FUND
SHARES THAT WERE PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER
WILL NOT BE FORWARDED TO YOU UNTIL THE FUND IS REASONABLY ASSURED
THAT YOUR CHECK OR ELECTRONIC FUNDS TRANSFER HAS CLEARED, UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.

Redemptions

A. By Telephone

You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on which
the New York Stock Exchange or State Street Bank is closed) via
orders given to AFS by telephone toll-free (800) 824-1916. Such
redemption orders must include your account name as registered
with the Fund and the account number.

If your telephone redemption order is received by AFS
prior to 12:00 Noon (Eastern time), we will send the proceeds in
Federal funds by wire to your designated bank account that day.
The minimum amount for a wire is $1,000. If your telephone
redemption order is received by AFS after 12:00 Noon and before
4:00 p.m., we will wire the proceeds the next business day. You
also may request that proceeds be sent by check to your
designated bank. Redemptions are made without any charge to you.

During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching AFS
by telephone (although no such difficulty was apparent at any
time in connection with the 1987 market break). If a shareholder
were to experience such difficulty, the shareholder should issue
written instructions to AFS at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Telephone redemption is not available
with respect to shares (i) for which certificates have been
issued, (ii) held by a shareholder who has changed his or her
address of record within the preceding 30 calendar days or (iii)

<PAGE>

held in any retirement plan account. Neither the Fund nor the
Adviser, or AFS will be responsible for the authenticity of
telephone requests for redemptions that the Fund reasonably
believes to be genuine. The Fund will employ reasonable
procedures in order to verify that telephone requests for
redemptions are genuine, including among others, recording such
telephone instructions and causing written confirmations of the
resulting transactions to be sent to shareholders. If the Fund
did not employ such procedures, it could be liable for losses
arising from unauthorized or fraudulent telephone instructions.
Selected dealers or agents may charge a commission for handling
telephone requests for redemptions.

B. By Checkwriting

With this service, you may write checks made payable to
any payee. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account.
First, you must fill out the Signature Card which is with the
Application Form. If you wish to establish this checkwriting
service, subsequent to the opening of your Fund account, contact
the Fund by telephone or mail. There is no separate charge for
the checkwriting service, except that State Street Bank may
impose charges for checks which are returned unpaid because of
insufficient funds or for checks upon which you have placed a
stop order. There is currently a $7.50 charge for check
reorders.

The checkwriting service enables you to receive the
daily dividends declared on the shares to be redeemed until the
day that your check is presented to State Street Bank for
payment.

C. By Mail

You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by duly
endorsed certificates, if issued, should be mailed to Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey 07096-
1520. Such orders must include the account name as registered
with the Fund and the account number. All written orders for
redemption, and accompanying certificates, if any, must be signed
by all owners of the account with the signatures guaranteed by an
institution which is an "eligible guarantor" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended.

<PAGE>

_______________________________________________________________

ADDITIONAL INFORMATION
_______________________________________________________________

Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself or herself
with the deadlines set by his or her institution. (For example,
the Fund's Distributor accepts purchase orders from its customers
up to 2:15 p.m. (Eastern time) for issuance at the 4:00 p.m.
(Eastern time) transaction time and price.) A brokerage firm
acting on behalf of a customer in connection with transactions in
Fund shares is subject to the same legal obligations imposed on
it generally in connection with transactions in securities for a
customer, including the obligation to act promptly and
accurately.

Orders for the purchase of Fund shares become effective
at the next transaction time after Federal funds or bank wire
monies become available to State Street Bank for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at State Street Bank by bank wire. Money
transmitted by a check drawn on a member of the Federal Reserve
System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members
of the Federal Reserve System may take longer. All payments
(including checks from individual investors) must be in United
States dollars.

All shares purchased are confirmed to each shareholder
and are credited to his or her account at the net asset value.
To avoid unnecessary expense to the Fund and to facilitate the
immediate redemption of shares, share certificates, for which no
charge is made, are not issued except upon the written request of
a shareholder. Certificates are not issued for fractional
shares. Shares for which certificates have been issued are not
eligible for any of the optional methods of withdrawal; namely,
the telephone, telegraph, check-writing or periodic redemption

<PAGE>

procedures. The Fund reserves the right to reject any purchase
order.

Arrangements for Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.

Automatic Investment Program. A shareholder may
purchase shares of the Fund through an automatic investment
program through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or AFS at (800) 221-5672.

Retirement Plans. The Fund's objectives of safety of
principal, excellent liquidity and maximum current income to the
extent consistent with the first two objectives may make it a
suitable investment vehicle for part or all of the assets held in
various tax-deferred retirement plans. The Fund has available
forms of individual retirement account (IRA), simplified employee
pension plans (SEP), 403(b)(7) plans and employer-sponsored
retirement plans (Keogh or HR10 Plan). Certain services
described in this prospectus may not be available to retirement
accounts and plans. Persons desiring information concerning
these plans should write or telephone the Fund or AFS at
(800) 221-5672.

The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, is the custodian under these plans. The custodian
charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.

<PAGE>

close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,
via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.

The Fund has the right to close out an account if it has
a zero balance on December 31 and no account activity for the
first six months of the subsequent year. Therefore, unless this
has occurred, a shareholder with a zero balance, when
reinvesting, should continue to use his account number.
Otherwise, the account should be re-opened pursuant to procedures
described above or through instructions given to a financial
intermediary.

A "business day," during which purchases and redemptions
of Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday, exclusive of New Years Day, Martin Luther King, Jr.
Day, Presidents Day (observed), Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day and
Christmas Day; if one of these holidays falls on a Saturday or
Sunday, purchases and redemptions will likewise not be processed
on the preceding Friday or the following Monday, respectively.
However, on any such day that is an official bank holiday in
Massachusetts, neither purchases nor wired redemptions can become
effective because Federal funds cannot be received or sent by
State Street Bank. On such days, therefore, the Fund can only
accept redemption orders for which shareholders desire remittance
by check. The right of redemption may be suspended or the date
of a redemption payment postponed for any period during which the
New York Stock Exchange is closed (other than customary weekend
and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency (as determined by the
Commission) exists, or the Commission has ordered such a
suspension for the protection of shareholders. The value of a
shareholder's investment at the time of redemption may be more or
less than his or her cost, depending on the market value of the
securities held by the Fund at such time and the income earned.

_______________________________________________________________

DAILY DIVIDENDS-DETERMINATION OF NET ASSET VALUE
_______________________________________________________________

All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. Eastern time (and at
such other times as the Trustees may determine) and is paid

<PAGE>

immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.

Net income consists of all accrued interest income on
Fund portfolio assets less the Fund's expenses applicable to that
dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.

The valuation of the Fund's portfolio securities is
based upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may be higher than that of
a fund with identical investments utilizing a method of valuation
based upon market prices for its portfolio instruments; the
converse would apply in a period of rising interest rates.

The Fund maintains procedures designed to maintain, to
the extent reasonably possible, the price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the
Trustees to the extent required by Rule 2a-7 under the Act at
such intervals as they deem appropriate to determine whether and
to what extent the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates
from net asset value based on amortized cost. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.

The net asset value of the shares is determined each
business day at 12:00 Noon and 4:00 p.m. (Eastern time). The net
asset value per share is calculated by taking the sum of the
value of the Fund's investments and any cash or other assets,
subtracting liabilities, and dividing by the total number of
shares outstanding. All expenses, including the fees payable to
the Adviser, are accrued daily.

<PAGE>

_______________________________________________________________

TAXES
_______________________________________________________________

The Fund has qualified in each fiscal year to date and
intends to qualify in each future year to be taxed as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code") and, as such, will not be liable for Federal
income and excise taxes on the net income and capital gains
distributed to its shareholders. Since the Fund distributes all
of its net income and capital gains, the Fund itself should
thereby avoid all Federal income and excise taxes.

For shareholders' Federal income tax purposes, all
distributions by the Fund out of interest income and net realized
short-term capital gains are treated as ordinary income, and
distributions of long-term capital gains, if any, are treated as
long-term capital gains irrespective of the length of time the
shareholder held shares in the Fund. Since the Fund derives
nearly all of its gross income in the form of interest and the
balance in the form of short-term capital gains, it is expected
that for corporate shareholders, none of the Fund's distributions
will be eligible for the dividends-received deduction under
current law.

_______________________________________________________________

GENERAL INFORMATION
_______________________________________________________________

Portfolio Transactions. Subject to the general
supervision of the Trustees of the Fund, the Adviser is
responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Fund. Because the Fund
invests in securities with short maturities, there is a
relatively high portfolio turnover rate. However, the turnover
rate does not have an adverse effect upon the net yield and net
asset value of the Fund's shares since the Fund's portfolio
transactions occur primarily with issuers, underwriters or major
dealers in money market instruments acting as principals. Such
transactions are normally on a net basis which does not involve
payment of brokerage commissions. The cost of securities
purchased from an underwriter usually includes a commission paid
by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices.

<PAGE>

transactions. Where best price and execution may be obtained
from more than one dealer, the Adviser may, in its discretion,
purchase and sell securities through dealers who provide
research, statistical and other information to the Adviser. Such
services may be used by the Adviser for all of its investment
advisory accounts and, accordingly, not all such services may be
used by the Adviser in connection with the Fund. The
supplemental information received from a dealer is in addition to
the services required to be performed by the Adviser under the
Advisory Agreement, and the expenses of the Adviser will not
necessarily be reduced as a result of the receipt of such
information. During the fiscal years ended June 30, 1998, 1999
and 2000, the Fund paid no brokerage commissions.

Capitalization. All shares of the Fund, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of additional classes would be governed by the Act and the
law of the Commonwealth of Massachusetts. Shares of each
portfolio are normally entitled to one vote for all purposes.
Generally, shares of all portfolios vote as a single series for
the election of Trustees and on any other matter affecting all
portfolios in substantially the same manner. As to matters
affecting each portfolio differently, such as approval of the
Advisory Agreement and changes in investment policy, shares of
each portfolio vote as separate classes. Certain procedures for
the removal by shareholders of trustees of investment trusts,
such as the Fund, are set forth in Section 16(c) of the Act.

At October 6, 2000, there were 11,397,934,299 shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund the following persons owned of record and no person
owned beneficially, 5% or more of the outstanding shares of the
Portfolio as of October 6, 2000:

<PAGE>

No. of % of
Shares Class

Pershing As Agent 7,614,654,420 66.81%
Omnibus Account
For Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0022

Janet Montgomery Scott 1,283,266,633 11.26%
As Agent Omnibus A/C For
Exclusive Benefit of Customers
1801 Market Street
Philadelphia, PA 19103

Shareholder Liability. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that
the Trustees use their best efforts to ensure that notice of such
disclaimer be given in each note, bond, contract, instrument,
certificate or undertaking made or issued by the Trustees or
officers of the Trust. The Agreement and Declaration of Trust
provides for indemnification out of the property of the Fund for
all loss and expense of any shareholder of the Fund held
personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the
Fund would be unable to meet its obligations. In the view of the
Adviser, such risk is not material.

Legal Matters. The legality of the shares offered
hereby has been passed upon by Seward & Kissel LLP, New York, New
York, counsel for the Fund and the Adviser. Seward & Kissel has
relied upon the opinion of Sullivan & Worcester, Boston,
Massachusetts, for matters relating to Massachusetts law.

Accountants. The Fund's independent accountants for the
fiscal year ending June 30, 2001 are PricewaterhouseCoopers LLP.
Prior to June 30, 2000 the accountants were McGladrey & Pullen
LLP.

<PAGE>

bank money market deposit accounts, certificates of deposit or
various indices. Such yield quotations are calculated in
accordance with the standardized method referred to in Rule 482
under the Securities Act of 1933. Yield quotations are thus
determined by (i) computing the net changes over a seven-day
period, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of
such period, and (iii) multiplying such base period return by
(365/7) with the resulting yield figure carried to the nearest
hundredth of one percent. The Fund's effective annual yield
represents a compounding of the annualized yield according to the
following formula:

effective yield = [(base period return + 1) 365/7] - 1.

Additional Information. This Statement of
Additional Information does not contain all the information set
forth in the Registration Statement filed by the Fund with the
Commission under the Securities Act of 1933. Copies of the
Registration Statement may be obtained at a reasonable charge
from the Commission or may be examined, without charge, at the
Commission's offices in Washington, D.C.

<PAGE>

________________________________________________________________

FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS.
________________________________________________________________

The financial statements and the report of
PricewaterhouseCoopers LLP of Alliance Capital Reserves are
incorporated herein by reference to its annual report filing made
with the SEC pursuant to Section 30(b) of the Act and Rule 30b2-1
thereunder. The annual report is dated June 30, 2000 and was
filed on August 29, 2000. It is available without charge upon
request by calling Alliance Fund Services, Inc. at (800) 227-
4618. The Fund's financial statements include the financial
statements of each of the Fund's portfolios.

<PAGE>

______________________________________________________________

APPENDIX
______________________________________________________________

A-1+, A-1, Prime-1, Fitch-1 and Duff 1 Commercial Paper Ratings

"A-1+" is the highest, and "A-1" the second highest,
commercial paper ratings assigned by Standard & Poor's and
"Prime-1" is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Standard & Poor's
uses the numbers 1+, 1, 2 and 3 to denote relative strength
within its highest classification of "A", while Moody's uses the
numbers 1, 2 and 3 to denote relative strength within its highest
classification of "Prime". Commercial paper issuers rated "A" by
Standard & Poor's have the following characteristics: liquidity
ratios are better than industry average; long-term debt rating is
A or better; the issuer has access to at least two additional
channels of borrowing; basic earnings and cash flow are in an
upward trend; and typically, the issuer is a strong company in a
well-established industry and has superior management.
Commercial paper issuers rated "Prime" by Moody's have the
following characteristics: their short-term debt obligations
carry the smallest degree of investment risk; margins of support
for current indebtedness are large or stable with cash flow and
asset protection well assured; current liquidity provides ample
coverage of near-term liabilities and unused alternative
financing arrangements are generally available; and while
protective elements may change over the intermediate or longer
term, such changes are most unlikely to impair the fundamentally
strong position of short-term obligations. Commercial paper
rated "Fitch-1" is considered to be the highest grade paper and
is regarded as having the strongest degree of assurance for
timely payment. Commercial paper issues rated "Duff 1" by Duff &
Phelps, Inc. have the following characteristics: very high
certainty of timely payment, excellent liquidity factors
supported by strong fundamental protection factors, and risk
factors which are very small.

AAA & AA and Aaa & Aa Bond Ratings

Bonds rated AAA and Aaa have the highest ratings
assigned to debt obligations by Standard & Poor's and Moody's,
respectively. Standard & Poor's AAA rating indicates an
extremely strong capacity to pay principal and interest. Bonds
rated AA by Standard & Poor's also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA
issues only in small degree. Moody's Aaa rating indicates the
ultimate degree of protection as to principal and interest.

A-1

<PAGE>

Moody's Aa rated bonds, though also high-grade issues, are rated
lower than Aaa bonds because margins of protection may not be as
large or fluctuations of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger.

A-2

<PAGE>

(LOGO) ALLIANCE CAPITAL RESERVES
- Alliance Money Reserves

P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
________________________________________________________________

STATEMENT OF ADDITIONAL INFORMATION
November 1, 2000
________________________________________________________________

TABLE OF CONTENTS
Page

The Fund....................................................

Investment Objective and Policies...........................

Investment Restrictions.....................................

Management..................................................

Purchase and Redemption of Shares...........................

Additional Information......................................

Daily Dividends-Determination of Net Asset Value............

Taxes.......................................................

General Information.........................................

Financial Statements and Report of Independent Accountants..

Appendix-Commercial Paper and Bond Ratings..................

________________________________________________________________

(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.

<PAGE>

_______________________________________________________________

THE FUND
________________________________________________________________

Alliance Money Reserves (the "Fund") is one of two
portfolios of Alliance Capital Reserves (the "Trust"), a
diversified, open-end investment company. The Trust was
reorganized as a Massachusetts business trust in October 1984,
having previously been a Maryland corporation since formation in
April 1978. The other portfolio, also named Alliance Capital
Reserves, is described in a separate Prospectus and Statement of
Additional Information, which may be obtained from Alliance Fund
Services, Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520,
toll free (800) 221-5672.

________________________________________________________________

INVESTMENT OBJECTIVE AND POLICIES
________________________________________________________________

The Fund's objective is maximum current income, to the
extent it is consistent with safety of principal and liquidity.
As a matter of fundamental policy, the Fund pursues its objective
by maintaining a portfolio of high-quality U.S. dollar-
denominated money market securities, all of which at the time of
investment have remaining maturities not exceeding one year or
less (which maturities pursuant to Rule 2a-7 under the Investment
Company Act of 1940 as amended, (the "Act"), may extend to 397
days, or such greater length of time as may be permitted from
time to time pursuant to Rule 2a-7). Accordingly, the Fund may
make the following investments diversified by maturities and
issuers:

2. Certificates of deposit and bankers' acceptances
issued or guaranteed by, or time deposits maintained at, banks or

<PAGE>

savings and loan associations (including foreign branches of U.S.
banks or U.S. or foreign branches of foreign banks) having total
assets of more than $500 million. Certificates of deposit are
receipts issued by a depository institution in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited
plus interest to the bearer of the receipt on the date specified
on the certificate. The certificate usually can be traded in the
secondary market prior to maturity. Bankers' acceptances
typically arise from short-term credit arrangements designed to
enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on
a bank by an exporter or an importer to obtain a stated amount of
funds to pay for specific merchandise. The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees
to pay the face value of the instrument on its maturity date.
The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the
going rate of discount for a specific maturity. Although
maturities for acceptances can be as long as 270 days, most
acceptances have maturities of six months or less.

3. Commercial paper, including funding agreements and
variable amount master demand notes, of high quality i.e. rated
A-1 or A-2 by Standard & Poor's Corporation ("Standard &
Poor's"), Prime-1 or Prime-2 by Moody's Investors Service, Inc.,
("Moody's") Fitch-1 or Fitch-2 by Fitch Investors Service, Inc.,
or Duff 1 or Duff 2 by Duff & Phelps Inc. or, if not rated,
issued by U.S. or foreign companies which have an outstanding
debt issue rated AAA, AA or A by Standard & Poor's, or Aaa, Aa or
A by Moody's and participation interests in loans extended by
banks to such companies. For a description of such ratings see
the Appendix. Commercial paper consists of short-term (usually
from 1 to 270 days) unsecured promissory notes issued by
corporations in order to finance their current operations. A
variable amount master demand note represents a direct borrowing
arrangement involving periodically fluctuating rates of interest
under a letter agreement between a commercial paper issuer and an
institutional lender pursuant to which the lender may determine
to invest varying amounts. For a further description of variable
amount master demand notes, see "Floating and Variable Rate
Obligations" below. The Fund may make investments in
certificates of deposit and bankers' acceptances issued or
guaranteed by, or time deposits maintained at, foreign branches
of U.S. banks and foreign branches of foreign banks, and
commercial paper issued by foreign companies. To the extent that
the Fund makes such investments, consideration is given to their
domestic marketability, the lower reserve requirements generally
mandated for overseas banking operations, the possible impact of
interruptions in the flow of international currency transactions,
potential political and social instability or expropriation,
imposition of foreign taxes, the lower level of government

<PAGE>

supervision of issuers, the difficulty in enforcing contractual
obligations and the lack of uniform accounting and financial
reporting standards.

4. Repurchase agreements that are collateralized in
full each day by liquid securities of the types listed above. A
repurchase agreement arises when a buyer purchases a security and
simultaneously agrees to resell it to the counterparty at an
agreed-upon future date. The resale price is greater than the
purchase price, reflecting an agreed-upon market rate which is
effective for the period of time the buyer's money is invested in
the security and which is not related to the coupon rate on the
purchased security. Repurchase agreements are currently entered
into with counterparties deemed to be creditworthy by Alliance
Capital Management L.P. (the "Adviser"), including broker-
dealers, member banks of the Federal Reserve System or "primary
dealers" (as designated by the Federal Reserve Bank of New York)
in U.S. Government securities or with State Street Bank and Trust
Company ("State Street Bank"), the Fund's Custodian. For each
repurchase agreement, the Fund requires continual maintenance of
the market value of underlying collateral in amounts equal to, or
in excess of, the agreement amount. While the maturities of the
underlying collateral may exceed 397 days, the term of the
repurchase agreement is always less than 397 days. In the event
that a counterparty defaulted on its repurchase obligation, the
Fund might suffer a loss to the extent that the proceeds from the
sale of the collateral were less than the repurchase price. If
the counterparty became bankrupt, the Fund might be delayed in
selling the collateral. Repurchase agreements often are for
short periods such as one day or a week, but may be longer.
Repurchase agreements not terminable within seven days will be
limited to no more than 10% of the Fund's assets.*******
Pursuant to Rule 2a-7, a repurchase agreement is deemed to be an
acquisition of the underlying securities provided that the
obligation of the seller to repurchase the securities from the
money market fund is collateralized fully (as defined in such
Rule). Accordingly, the counterparty of a fully collateralized
repurchase agreement is deemed to be the issuer of the underlying
securities.

*******As used throughout the Prospectus and Statement of
Additional Information, the term "assets" shall refer to
the Fund's total assets.

<PAGE>

security's interest rate is tied. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 397
days, but which permit the holder to demand payment of principal
at any time, or at specified intervals not exceeding 397 days, in
each case upon not more than 30 days' notice.

Reverse Repurchase Agreements. While the Fund has no
plans to do so, it may enter into reverse repurchase agreements,
which involve the sale of money market securities held by the
Fund with an agreement to repurchase the securities at an agreed-
upon price, date and interest payment.

Asset-backed Securities. The Fund may invest in asset-
backed securities that meet its existing diversification, quality
and maturity criteria. These securities must generally be rated.
Asset-backed securities are securities issued by special purpose
entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may be in the form of a
beneficial interest in a special purpose trust, limited
partnership interest, or commercial paper or other debt
securities issued by a special purpose corporation. Although the
securities may have some form of credit or liquidity enhancement,
payments on the securities depend predominately upon collection
of the loans and receivables held by the issuer. Generally, the
special purpose entity is deemed to be the issuer of the asset-
backed security. However, the Fund is required to treat any
person whose obligations constitute ten percent or more of the
assets of the asset-backed security as the issuer of the portion
of the asset-backed security such obligations represent.

<PAGE>

on resale (other than those restricted securities determined to
be liquid as described below) and repurchase agreements not
terminable within seven days. As to illiquid securities, the
Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Fund's net
assets could be adversely affected.

In 1990, in part to enhance the liquidity in the
institutional markets for restricted securities, the Commission
adopted Rule 144A under the Securities Act to establish a safe

<PAGE>

harbor from the Securities Act's registration requirements for
resale of certain restricted securities to qualified
institutional buyers. Section 4(2) paper that is issued by a
company that files reports under the Securities Exchange Act of
1934 is generally eligible to be resold in reliance on the safe
harbor of Rule 144A. Pursuant to Rule 144A, the institutional
restricted securities markets may provide both readily
ascertainable values for restricted securities and the ability to
liquidate an investment in order to satisfy share redemption
orders on a timely basis. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted
securities held by the Fund, however, could affect adversely the
marketability of such portfolio securities and the Fund might be
unable to dispose of such securities promptly or at reasonable
prices. Rule 144A has already produced enhanced liquidity for
many restricted securities, and market liquidity for such
securities may continue to expand as a result of Rule 144A and
the consequent inception of the PORTAL System sponsored by the
National Association of Securities Dealers, Inc., an automated
system for the trading, clearance and settlement of unregistered
securities.

(i) the frequency of trades and quotations for the
security;

(ii) the number of dealers making quotations to
purchase or sell the security;

(iii) the number of other potential purchasers of the
security;

(iv) the number of dealers undertaking to make a market
in the security;

(v) the nature of the security (including its
unregistered nature) and the nature of the
marketplace for the security (e.g., the time
needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer);
and

<PAGE>

(vi) any applicable Commission interpretation or
position with respect to such types of securities.

To make the determination that an issue of Section 4(2)
paper is liquid, the Adviser must conclude that the following
conditions have been met:

(i) the Section 4(2) paper must not be traded flat or
in default as to principal or interest; and

(ii) the Section 4(2) paper must be rated in one of the
two highest rating categories by at least two
NRSROs, or if only one NRSRO rates the security,
by that NRSRO; if the security is unrated, the
Adviser must determine that the security is of
equivalent quality.

The Adviser must also consider the trading market for
the specific security, taking into account all relevant factors.

Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.

General

There can be no assurance, as is true with all
investment companies, that the Fund's objective will be achieved.
The market value of the Fund's investments tends to decrease
during periods of rising interest rates and to increase during
intervals of falling rates.

The Fund's investment objective may not be changed
without the affirmative vote of a majority of the Fund's
outstanding shares as defined below. Except as otherwise
provided, the Fund's investment policies are not designated
"fundamental policies" within the meaning of the Act and may,
therefore, be changed by the Trustees of the Trust without a

<PAGE>

shareholder vote. However, the Fund will not change its
investment policies without contemporaneous written notice to
shareholders.

Rule 2a-7 under the Act. The Fund will comply with
Rule 2a-7 under the Act, as amended from time to time, including
the diversification, quality and maturity limitations imposed by
the Rule. To the extent that the Fund's limitations are more
permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.

Under Rule 2a-7 the Fund may not invest more than five
percent of its assets in the securities of any one issuer other
than the United States Government, its agencies and
instrumentalities. A first tier security is an Eligible Security
that has received a short-term rating from the requisite NRSROs
in the highest short-term rating category for debt obligations,
or is an unrated security deemed to be of comparable quality.
Government securities are also considered to be first tier
securities. In addition, the Fund may not invest in a security
that has received, or is deemed comparable in quality to a
security that has received, the second highest rating by the
requisite number of NRSROs (a "second tier security") if
immediately after the acquisition thereof the Fund would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.

<PAGE>

________________________________________________________________

INVESTMENT RESTRICTIONS
________________________________________________________________

The following restrictions may not be changed without
the affirmative vote of a majority of the Fund's outstanding
shares, which means the vote of (1) 67% or more of the shares
represented at a meeting at which more than 50% of the
outstanding shares are represented or (2) more than 50% of the
outstanding shares, whichever is less. If a percentage
restriction is adhered to at the time of an investment, a later
increase or decrease in percentage resulting from a change in
value of portfolio securities or in amount of the Fund's assets
will not constitute a violation of that restriction.

The Fund:

1. May not purchase any security which has a maturity
date more than one year******** from the date of the Fund's
purchase;

3. May not invest more than 5% of its assets in the
securities of any one issuer********* (exclusive of securities
____________________

********Which maturity, pursuant to Rule 2a-7, may extend to 397
days, or such greater length of time as may be permitted
from time to time pursuant to Rule 2a-7.

********* As a matter of operating policy, pursuant to Rule 2a-
7, the Fund will invest no more than 5% of its assets in
the first tier (as defined in Rule 2a-7) securities of any
one issuer except that under Rule 2a-7, a Fund may invest
up to 25% of its total assets in the first tier securities
of a single issuer for a period of up to three business
days. Fundamental policy number (3) would give the
Portfolio the ability to invest, with respect to 25% of
its assets, more than 5% of its assets in any one issuer
only in the event Rule 2a-7 is amended in the future.
(footnote continued)

<PAGE>

issued or guaranteed by the United States Government, its
agencies or instrumentalities), except that up to 25% of the
value of the Fund's total assets may be invested without regard
to such 5% limitation;

7. May not make loans, provided that the Fund may
purchase money market securities and enter into repurchase
agreements;

(footnote continued)
Pursuant to Rule 2a-7, acquisition of a fully
collateralized repurchase agreement is deemed to be the
acquisition of the underlying securities.

<PAGE>

maintain a short position or write, purchase or sell puts, calls,
straddles, spreads or combinations thereof; (f) invest in
securities of issuers (other than agencies and instrumentalities
of the United States Government) having a record, together with
predecessors, of less than three years of continuous operation if
more than 5% of the Fund's assets would be invested in such
securities; (g) purchase or retain securities of any issuers if
those officers and trustees of the Fund and employees of the
Adviser who own individually more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5%
of the securities of such issuer; or (h) act as an underwriter of
securities.

________________________________________________________________

MANAGEMENT
________________________________________________________________

Trustees and Officers

The business and affairs of the Fund are managed under
the direction of the Board of Trustees. The Trustees and
principal officers of the Fund and their principal occupations
during the past five years are set forth below. Unless otherwise
specified, the address of each such person is 1345 Avenue of the
Americas, New York, New York 10105. Those Trustees whose names
are preceded by an asterisk are "interested persons" of the Trust
as determined under the Act. Each Trustee and officer is also a
director, trustee or officer of other registered investment
companies sponsored by the Adviser.

Trustees

DAVE H. WILLIAMS********** , 68, Chairman, is Chairman
of the Board of Directors of Alliance Capital Management
Corporation ("ACMC") , sole general partner of the Adviser with
which he has been associated since prior to 1995.

JOHN D. CARIFA4, 55, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1995.
____________________

**********An "interested person" of the Fund as defined in the
Act.

For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation,
the sole general partner of the Adviser, and to the
predecessor general partner of the Adviser of the same
name.

<PAGE>

SAM Y. CROSS, 73, was, since prior to 1995, Executive
Vice President of The Federal Reserve Bank of New York and
manager for foreign operations for The Federal Reserve System.
He is also a director of Fuji Bank and Trust Co. He is
Executive-In-Residence at the School of International and Public
Affairs, Columbia University. His address is 200 East 66th
Street, New York, New York 10021.

SHELBY WHITE, 62, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York
10022.

Officers

KATHLEEN A. CORBET - Senior Vice President, 40, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1995.

ANDREW A. ARAN - Senior Vice President, 43, is a Senior
Vice President of ACMC with which he has been associated since
prior to 1995.

<PAGE>

DREW A. BIEGEL - Senior Vice President, 49, is a Vice
President of Alliance Fund Distributions ("AFD") with which he
has been associated since prior to 1995.

JOHN R. BONCZEK - Senior Vice President, 40, is a Senior
Vice President of AFD with which he has been associated since
prior to 1995.

DORIS T. CILIBERTI - Senior Vice President, 36, is a
Vice President of AFD with which she has been associated since
prior to 1995.

ROBERT I. KURZWEIL - Senior Vice President, 49, is a
Vice President of AFD with which he has been associated since
prior to 1995.

WAYNE D. LYSKI - Senior Vice President, 59, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1995.

PATRICIA ITTNER - Senior Vice President, 49, is a Vice
President of ACMC with which she has been associated since prior
to 1995.

RAYMOND J. PAPERA - Senior Vice President, 44, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1995.

KENNETH T. CARTY - Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1995.

JOHN F. CHIODI, Jr. - Vice President, 34, is a Vice
President of ACMC with which he has been associated since prior
to 1995.

MARIA R. CONA - Vice President, 45, is a Vice President
of ACMC with which she has been associated since prior to 1995.

JOSEPH DONA - Vice President, 39, is a Vice President of
ACMC with which he has been associated since prior to 1995.

WILLIAM J. FAGAN - Vice President, 38, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.

LINDA N. KELLEY - Vice President, 40, is an Assistant
Vice President of AFD with which she has been associated since
prior to 1995.

<PAGE>

JOSEPH R. LASPINA - Vice President, 40, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.

EDMUND P. BERGAN, Jr. - Secretary, 50, is a Senior Vice
President and the General Counsel of AFD and Alliance Fund
Services, Inc. ("AFS") with which he has been associated since
prior to 1995.

MARK D. GERSTEN - Treasurer and Chief Financial Officer,
50, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1995.

VINCENT S. NOTO - Controller, 35 is a Vice President of
AFS with which he has been associated since prior to 1995.

ANDREW L. GANGOLF - Assistant Secretary, 46, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.

DOMENICK PUGLIESE - Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995 .

As of October 6, 2000 the Trustees and officers as a
group owned less than 1% of the shares of the Fund.

<PAGE>

Dave H. Williams $-0- $-0- 6 16
John D. Carifa $-0- $-0- 49 107
Sam Y. Cross $3,438 $ 15,750 3 14
Charles H.P. Duell $3,063 $ 15,000 3 14
William H. Foulk, Jr. $3,359 $246,413 45 102
David K. Storrs $3,063 $ 15,000 3 14
Shelby White $3,438 $ 15,750 3 14

The Adviser

Until October 29, 1999, Alliance Holding served as the
investment adviser to the Fund. On that date, Alliance
Holding reorganized by transferring its business to the
(footnote continued)

<PAGE>

Equity interests in Alliance Holding are traded on the New York
Stock Exchange in the form of units. Approximately 98% of such
interests are owned by the public and management or employees of
the Adviser and approximately 2% are owned by Equitable.
Equitable is a wholly owned subsidiary of AXA Financial, Inc.
("AXA Financial"), a Delaware corporation whose shares are traded
on the New York Stock Exchange. AXA Financial serves as the
holding company for the Adviser, Equitable and Donaldson, Lufkin
& Jenrette, Inc., an integrated investment and merchant bank. As
of June 30, 1999, AXA, a French insurance holding company, owned
approximately 58.2% of the issued and outstanding shares of
common stock of AXA Financial.

Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Trust who
are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of the first $1.25 billion of the average daily
net value of the Fund's net assets, .49 of 1% of the next $.25
billion of such assets, .48 of 1% of the next $.25 billion of
such assets, .47 of 1% of the next $.25 billion of such assets,
.46 of 1% of the next $1 billion of such assets and .45 of 1% of
the average daily value of the Fund's net assets in excess of $3
billion. The fee is accrued daily and paid monthly under the
Advisory Agreement. The Adviser will reimburse the Fund to the
extent that its net expenses (excluding taxes, brokerage,
interest and extraordinary expenses) exceed 1% of its average
daily net assets for any fiscal year. For the fiscal years ended
June 30, 1998, 1999 and 2000, the Adviser received from the Fund
advisory fees (net of reimbursement for each fiscal year) of
$5,418,833 (net of $268,438 of expense reimbursement), $6,724,074
(net of $304,024 of expense reimbursement) and $8,639,994 (net of
$264,007 of expense reimbursement), respectively. In accordance
with the Distribution Services Agreement described below, the
Fund may pay a portion of advertising and promotional expenses in
connection with the sale of shares of the Fund. The Fund also
pays for printing of prospectuses and other reports to
____________________

(footnote continued)
Adviser. Prior thereto, the Adviser had no material
business operations. One result of the reorganization was
that the Advisory Agreement, then between the Fund and
Alliance Holding, was transferred to the Adviser by means
of a technical assignment, and ownership of Alliance Fund
Distributors, Inc. and Alliance Fund Services, Inc., the
Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Advisers.

<PAGE>

shareholders and all expenses and fees related to registration
and filing with the Commission and with state regulatory
authorities. The Fund pays all other expenses incurred in its
operations, including the Adviser's management fees; custody,
transfer and dividend disbursing expenses; legal and auditing
costs; clerical, administrative, accounting, and other office
costs; fees and expenses of Trustees who are not affiliated with
the Adviser; costs of maintenance of the Trust's existence; and
interest charges, taxes, brokerage fees, and commissions. As to
the obtaining of clerical and accounting services not required to
be provided to the Fund by the Adviser under the Advisory
Agreement, the Fund may employ its own personnel. For such
services, it also may utilize personnel employed by the Adviser;
if so done, the services are provided to the Fund at cost and the
payments therefor must be specifically approved in advance by the
Trustees. In respect of such services for the fiscal years ended
June 30, 1998, 1999 and 2000, the Fund paid to the Adviser a
total of $137,000, $138,000 and $144,000, respectively.

The Fund has made arrangements with certain broker-
dealers, including Pershing, Division of Donaldson, Lufkin &
Jenrette Securities Corporation ("Pershing"), an affiliate of the
Adviser, whose customers are Fund shareholders pursuant to which
payments are made to such broker-dealers performing recordkeeping
and shareholder servicing functions. Such functions may include
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays fully disclosed and omnibus broker dealers
(including Pershing) for such services. The Fund may also pay
for the electronic communications equipment maintained at the
broker-dealers' offices that permits access to the Fund's
computer files and, in addition, reimburses fully-disclosed
broker-dealers at cost for personnel expenses involved in
providing such services. All such payments must be approved or
ratified by the Trustees. For the fiscal years ended June 30,
1998, 1999 and 2000, the Fund paid such broker-dealers a total of
$1,033,468, $1,822,974 and $2,278,143, respectively, a
substantial portion of which was paid to affiliates.

The Advisory Agreement remains in effect from year to
year provided that such continuance is specifically approved
annually by a vote of a majority of the outstanding shares of the

<PAGE>

Fund or by the Fund's Trustees, including in either case approval
by a majority of the Trustees who are not parties to the Advisory
Agreement or interested persons as defined by the Act. The
Advisory Agreement may be terminated without penalty on 60 days'
written notice at the option of either party or by a vote of the
outstanding voting securities of the Fund; it will automatically
terminate in the event of assignment. The Adviser is not liable
for any action or inaction with regard to its obligations under
the Advisory Agreement as long as it does not exhibit willful
misfeasance, bad faith, gross negligence, or reckless disregard
of its obligations.

Distribution Services Agreement

Rule 12b-1 under the Act permits an investment company
to directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan") with AFD (the "Distributor")
which applies to both series of the Trust. Pursuant to the Plan,
the Fund pays to the Distributor a Rule 12b-1 distribution
services fee, which may not exceed an annual rate of .25 of 1% of
the Trust's (equal to each of its series') aggregate average
daily net assets. In addition, under the Agreement, the Adviser
makes payments for distribution assistance and for administrative
and accounting services from its own resources which may include
the management fee paid by the Fund.

Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor and Donaldson, Lufkin &
Jenrette Securities Corporation and its Pershing Division,
affiliates of the Adviser, for distribution assistance and to
banks and other depository institutions for administrative and
accounting services, and (ii) otherwise promoting the sale of
shares of the Fund such as by paying for the preparation,
printing and distribution of prospectuses and other promotional
materials sent to existing and prospective shareholders and by
directly or indirectly purchasing radio, television, newspaper
and other advertising. In approving the Agreement, the Trustees
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. During
the fiscal year ended June 30, 2000, the Fund made payments to
the Distributor for expenditures under the Agreement in amounts
aggregating $4,496,809 which constituted .25 of 1% at an annual
rate of the Fund's average daily net assets and the Adviser made
payments from its own resources as described above aggregating
$4,915,883. Of the $9,412,692 paid by the Adviser and the Fund
under the Agreement, $76,000 was paid for advertising, printing
and mailing of prospectuses to persons other than current

<PAGE>

shareholders (the Fund's pro rata share was approximately
$36,308); and $9,336,692 was paid to broker-dealers and other
financial intermediaries for distribution assistance (the Fund's
pro rata share was approximately $4,460,501).

The administrative and accounting services provided by
banks and other depository institutions may include, but are not
limited to, establishing and maintaining shareholder accounts,
sub-accounting, processing of purchase and redemption orders,
sending confirmations of transactions, forwarding financial
reports and other communications to shareholders and responding
to shareholder inquiries regarding the Trust. As interpreted by
courts and administrative agencies, certain laws and regulations
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Trust's management based on the advice of
counsel, these laws and regulations do not prohibit such
depository institutions from providing other services for
investment companies such as the administrative and accounting
services described above. The Trustees will consider appropriate
modifications to the Trust's operations, including discontinuance
of payments under the Agreement to banks and other depository
institutions, in the event of any future change in such laws or
regulations which may affect the ability of such institutions to
provide the above-mentioned services.

The Agreement became effective on July 22, 1992.
Continuance of the Agreement for an additional annual term was
approved by the vote, cast in person by all the Trustees of the
Trust who neither were interested persons of the Trust nor had
any direct or indirect financial interest in the Agreement or any
related agreement, at a meeting called for that purpose on
June 5, 2000. The Agreement may be continued annually thereafter
if approved by a majority vote of the Trustees who neither are
interested persons of the Trust nor have any direct or indirect
financial interest in the Agreement or in any related agreement,
cast in person at a meeting called for that purpose.

<PAGE>

outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Distributor. Any agreement with a qualifying broker-
dealer or other financial intermediary may be terminated without
penalty on not more than sixty days' written notice by a vote of
the majority of non-party Trustees, by a vote of a majority of
the outstanding shares of the Fund, or by the Distributor and
will terminate automatically in the event of its assignment.

________________________________________________________________

PURCHASE AND REDEMPTION OF SHARES
________________________________________________________________

Accounts Not Maintained Through Financial
Intermediaries

Opening Accounts -- New Investments

A. When Funds are Sent by Wire (the wire method
permits immediate credit)

1) Telephone the Fund toll-free at (800) 824-1916.
The Fund will ask for the name of the account as
you wish it to be registered, address of the
account, and taxpayer identification number,
(social security number for an individual). The
Fund will then provide you with an account number.

<PAGE>

2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:

ABA 0110 0002 8
State Street Bank and Trust Company
Boston, MA 02101
Alliance Money Reserves
DDA 9903-279-9

Your account name as registered with the Fund
Your account number as registered with the Fund

3) Mail a completed Application Form to:

Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520

B. When Funds are Sent by Check

1) Fill out an Application Form.

2) Mail the completed Application Form along with
your check or negotiable bank draft (minimum
$1,000), payable to "Alliance Money Reserves," to
Alliance Fund Services, Inc. as in A(3) above.

Subsequent Investments

A. Investments by Wire (to obtain immediate credit)

Instruct your bank to wire Federal funds (minimum
$100) to State Street Bank and Trust Company ("State Street
Bank") as in A(2) above.

B. Investments by Check

Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Money Reserves," to Alliance Fund Services,
Inc. as in A(3) above.

Investments Made by Check

Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the

<PAGE>

Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.

Redemptions

C. By Telephone

<PAGE>

redemptions are genuine, including among others, recording such
telephone instructions and causing written confirmations of the
resulting transactions to be sent to shareholders. If the Fund
did not employ such procedures, it could be liable for losses
arising from unauthorized or fraudulent telephone instructions.
Selected dealers or agents may charge a commission for handling
telephone requests for redemptions.

D. By Checkwriting

With this service, you may write checks made payable to
any payee. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account.
First, you must fill out the Signature Card which is with the
Application Form. If you wish to establish this checkwriting
service subsequent to the opening of your Fund account, contact
the Fund by telephone or mail. There is no separate charge for
the checkwriting service, except that State Street Bank may
impose charges for checks which are returned unpaid because of
insufficient funds or for checks upon which you have placed a
stop order. There is currently a $7.50 charge for check
reorders.

The checkwriting service enables you to receive the
daily dividends declared on the shares to be redeemed until the
day that your check is presented to State Street Bank for
payment.

E. By Mail

You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by duly
endorsed certificates, if issued, should be mailed to Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey
07096-1520. Such orders must include the account name as
registered with the Fund and the account number. All written
orders for redemption, and accompanying certificates, if any,
must be signed by all owners of the account with the signatures
guaranteed by an institution which is an "eligible guarantor" as
defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended.

________________________________________________________________

ADDITIONAL INFORMATION
________________________________________________________________

<PAGE>

times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself or herself
with the deadlines set by his or her institution. (For example,
the Fund's Distributor accepts purchase orders from its customers
up to 2:15 p.m. (Eastern time) for issuance at the 4:00 p.m.
(Eastern time) transaction time and price.) A brokerage firm
acting on behalf of a customer in connection with transactions in
Fund shares is subject to the same legal obligations imposed on
it generally in connection with transactions in securities for a
customer, including the obligation to act promptly and
accurately.

<PAGE>

signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.

Periodic Distribution Plans. Without affecting your
right to use any of the methods of redemption described above, by
checking the appropriate boxes on the Application Form, you may
elect to participate additionally in the following plans without
any separate charge. Under the Income Distribution Plan you
receive monthly payments of all the income earned in your Fund
account, with payments forwarded by check or electronically via
the Automated Clearing House ("ACH") network shortly after the
close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,
via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.

<PAGE>

A "business day," during which purchases and redemptions
of Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday exclusive of New Year's Day, Martin Luther King, Jr.
Day, President's Day (observed), Good Friday, Memorial Day,
(observed), Independence Day, Labor Day, Thanksgiving Day and
Christmas Day; if one of these holidays falls on a Saturday or
Sunday purchases and redemptions will likewise not be processed
on the preceding Friday or the following Monday, respectively.
However, on any such day that is an official bank holiday in
Massachusetts, neither purchases nor wire redemptions can become
effective because Federal funds cannot be received or sent by
State Street Bank. On such days, therefore, the Fund can only
accept redemption orders for which shareholders desire remittance
by check. The right of redemption may be suspended or the date
of a redemption payment postponed for any period during which the
New York Stock Exchange is closed (other than customary weekend
and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency (as determined by the
Commission) exists, or the Commission has ordered such a
suspension for the protection of shareholders. The value of a
shareholder's investment at the time of redemption may be more or
less than his or her cost, depending on the market value of the
securities held by the Fund at such time and the income earned.

________________________________________________________________

DAILY DIVIDENDS-DETERMINATION OF NET ASSET VALUE
________________________________________________________________

All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. (Eastern time) (and at
such other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.

Net income consists of all accrued interest income on
Fund portfolio assets less the Fund's expenses applicable to that

<PAGE>

dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.

The Fund maintains procedures designed to maintain to
the extent reasonably possible, the price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the
Trustees to the extent required by Rule 2a-7 under the Act at
such intervals as they deem appropriate to determine whether and
to what extent the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates
from net asset value based on amortized cost. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.

________________________________________________________________

TAXES
________________________________________________________________

The Fund has qualified to date and intends to qualify in
each future year to be taxed as a regulated investment company
under the Internal Revenue Code of 1986, as amended, (the
"Code"), and as such, will not be liable for Federal income and
excise taxes on the net income and capital gains distributed to
its shareholders. Since the Fund distributes all of its net

<PAGE>

income and capital gains, the Fund itself should thereby avoid
all Federal income and excise taxes.

________________________________________________________________

GENERAL INFORMATION
________________________________________________________________

The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. During the fiscal

<PAGE>

years ended June 30, 1998, 1999 and 2000, the Fund paid no
brokerage commissions.

Capitalization. All shares of the Fund, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees in the future, for reasons such as the
desire to establish additional portfolios with different
investment objectives, policies or restrictions may create
additional classes or series of shares. Any issuance of shares
of additional classes would be governed by the Act and the law of
the Commonwealth of Massachusetts. Shares of each portfolio are
normally entitled to one vote for all purposes. Generally,
shares of all portfolios vote as a single series for the election
of Trustees and on any other matter affecting all portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio vote
as separate classes. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Trust,
are set forth in Section 16(c) of the Act.

At October 6, 2000, there were 1,830,705,840 shares of
beneficial interest of the Fund outstanding. To the knowledge of
the Fund the following persons owned of record and no person
owned beneficially, 5% or more of the outstanding shares of the
Portfolio as of October 6, 2000:

No. of % of
Name and Address Shares Class

Bidwell & Co. 331,856,164 18.17%
Omnibus Account
209 Southwest Oak Street
Portland, OR 97204-2714

National Financial Services Corp 5.54%
FBO Our Customers 101,227,453
PO Box 3752
Church Street Station
New York, NY 10008-3752

Ragen Mackenzie Inc. 258,839,994 14.17%
As Agent Omnibus A/C For
Exclusive Benefit of Customers
999 3rd Ave Suite 4300
Seattle, WA 98104-4081

<PAGE>

Robertson Stephens & Co. 388,680,604 21.28%
555 California St #2600
San Francisco, CA 94104-1502

Pershing As Agent 520,170,310 28.48%
Omnibus Account
For Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0022

Legal Matters. The legality of the shares offered
hereby has been passed upon by Seward & Kissel LLP, New York, New
York, counsel for the Trust and the Adviser. Seward & Kissel LLP
has relied upon the opinion of Sullivan & Worcester, Boston,
Massachusetts, for matters relating to Massachusetts law.

Accountants. The Fund's independent accountants for the
fiscal year ending June 30, 2001 are PricewaterhouseCoopers LLP.
Prior to June 30, 2000 the accountants were McGladrey & Pullen
LLP.

Yield Quotations. Advertisements containing yield
quotations for the Fund may from time to time be sent to
investors or placed in newspapers, magazines or other media on
behalf of the Fund. These advertisements may quote performance
rankings, ratings or data from independent organizations or
financial publications such as Lipper Analytical Services, Inc.,
Morningstar, Inc., IBC's Money Fund Report, IBC's Money Market
Insight or Bank Rate Monitor or compare the Fund's performance to
bank money market deposit accounts, certificates of deposit or
various indices. Such yield quotations are calculated in
accordance with the standardized method referred to in Rule 482
under the Securities Act of 1933. Yield quotations are thus
determined by (i) computing the net changes over a seven-day

<PAGE>

period, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of
such period, and (iii) multiplying such base period return by
(365/7)--with the resulting yield figure carried to the nearest
hundredth of one percent. The Fund's effective annual yield
represents a compounding of the annualized yield according to the
following formula:

effective yield = [(base period return + 1)365/7] - 1.

Additional Information. This Statement of Additional
Information does not contain all the information set forth in the
Registration Statement filed by the Trust with the Commission
under the Securities Act of 1933. Copies of the Registration
Statement may be obtained at a reasonable charge from the
Commission or may be examined, without charge, at the
Commission's offices in Washington, D.C.

<PAGE>

_______________________________________________________________

FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS
______________________________________________________________

The financial statements and the report of
PricewaterhouseCoopers LLP of Alliance Money Reserves are
incorporated herein by reference to its annual report filing made
with the SEC pursuant to Section 30(b) of the Act and Rule 30b2-1
thereunder. The annual report is dated June 30, 2000 and was
filed on August 29, 2000. It is available without charge upon
request by calling Alliance Fund Services, Inc. at (800) 227-
4618. The Fund's financial statements include the financial
statements of each of the Fund's portfolios.

<PAGE>

________________________________________________________________

APPENDIX
________________________________________________________________

Prime-1, Prime-2, A-1, A-2, Fitch-1, Fitch-2,
Duff 1 and Duff 2 Commercial Paper Ratings

The Fund will invest only in paper maintaining a high
quality rating.

"Prime-1" is the highest commercial paper rating
assigned by Moody's Investors Services, Inc. ("Moody's"), and
indicates superior ability for repayment of senior short-term
debt obligations. "Prime-2" is the second highest, and denotes a
strong, but somewhat lesser degree of assurance. Commercial
paper issuers rated "Prime" have the following characteristics:
their short-term debt obligations carry the smallest degree of
investment risk; margins of support for current indebtedness are
large or stable with cash flow and asset protection well assured;
current liquidity provides ample coverage of near-term
liabilities and unused alternative financing arrangements are
generally available; and while protective elements may change
over the intermediate or longer term, such changes are most
unlikely to impair the fundamentally strong position of short-
term obligations.

Commercial paper issuers rate "A" by Standard & Poor's
have the following characteristics: liquidity ratios are better
than industry average; long term debt is "A" or better; the
issuer has access to at least two additional channels of
borrowing; basic earnings and cash flow are in an upward trend;
and typically, the issuer is a strong company in a well-
established industry with superior management. Standard & Poor's
uses the numbers 1+, 1, 2 and 3 to denote relative strength
within its highest classification of "A". The numbers 1 and 2
indicate the relative degree of safety regarding timely payment
with "A-1" paper being somewhat higher than "A-3".

Commercial paper rated "Fitch-1" is considered to be the
highest grade paper and is regarded as having the strongest
degree of assurance for timely payment. "Fitch-2" is considered
very good grade paper and reflects an assurance of timely payment
only slightly less in degree than the strongest issue.

Commercial paper issues rated "Duff 1" by Duff & Phelps,
Inc. have the following characteristics: very high certainty of
timely payment, excellent liquidity factors supported by strong
fundamental protection factors, and risk factors which are very
small. Issues rated "Duff 2" have a good certainty of timely

A-1

<PAGE>

payment, sound liquidity factors and company fundamentals, small
risk factors, and good access to capital markets.

Bonds rated "AAA" and "Aaa" have the highest ratings
assigned to debt obligations by Standard & Poor's and Moody's,
respectively. Standard & Poor's "AAA" rating indicates an
extremely strong capacity to pay principal and interest. Bonds
rated "AA" by Standard & Poor's also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from "AAA"
issues only in small degree. Standard & Poor's "A" rated bonds
have a strong capacity to pay interest and repay principal but
are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than are higher rated
bonds.

Moody's "Aaa" rating indicates the ultimate degree of
protection as to principal and interest. Moody's "Aa" rated
bonds, though also high-grade issues, are rated lower than "Aaa"
bonds because margins of protection may not be as large,
fluctuations of protective elements may be of greater amplitude
or there may be other elements present which make the long term
risks appeal somewhat larger. Moody's "A" rated bonds are
considered upper medium grade obligations possessing many
favorable investment attributes. Although factors giving
security to principal and interest are considered adequate,
elements may exist which suggest that the bonds may be
susceptible to impairment sometime in the future.

A-2

<PAGE>

PART C
OTHER INFORMATION

ITEM 23. Exhibits

(a) (1) Declaration of Trust of the Registrant -
Incorporated by reference to Exhibit No. 1 to
Post-Effective Amendment No. 31 of
Registrant's Registration Statement on Form N-
1A (File Nos. 2-61564 and 811-2835) filed with
the Securities and Exchange Commission on
October 28, 1997.

(2) Certificate of Designation, dated February 13,
1989 - Incorporated by reference to Exhibit
(a)(2) to Post-Effective Amendment No. 33 of
Registrant's Registration Statement on Form
N-1A (File Nos. 2-61564 and 811-2835) filed
with the Securities and Exchange Commission of
August 31, 1999.

(b) By-Laws of the Registrant - Incorporated by
reference to Exhibit No. 2 to Post-Effective
Amendment No. 31 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-61564 and 811-
2835) filed with the Securities and Exchange
Commission on October 30, 1997.

(d) Advisory Agreement between the Registrant and
Alliance Capital Management L.P. - Incorporated by
reference to Exhibit No. 5 to Post-Effective
Amendment No. 31 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-61564 and 811-
2835) filed with the Securities and Exchange
Commission on October 30, 1997.

(e) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc., as
amended January 1, 1998 - Incorporated by reference
to Exhibit No. 6 to Post-Effective Amendment No. 32
of Registrant's Registration Statement on Form N-1A
(File Nos. 2-61564 and 811-2835) filed with the
Securities and Exchange Commission on October 28,
1998.

(f) Not applicable.

(g) Custodian Contract between the Registrant and State
Street Bank and Trust Company - Incorporated by

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<PAGE>

reference to Exhibit No. 8 to Post-Effective
Amendment No. 31 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-61564 and 811-
2835) filed with the Securities and Exchange
Commission on October 30, 1997.

(h) Transfer Agency Agreement between the Registrant
and Alliance Fund Services, Inc. - Incorporated by
reference to Exhibit No. 9 to Post-Effective
Amendment No. 31 of Registrant's Registration
Statement on Form N-1A (File Nos. 2-61564 and 811-
2835) filed with the Securities and Exchange
Commission on October 30, 1997.

(i) Opinion of Seward & Kissel LLP - Filed herewith.

(j) Consent of Independent Accountants - Filed
herewith.

(k) Not applicable.

(l) Not applicable.

(m) Rule 12b-1 Plan - See Exhibit (e) hereto.

(n) Not applicable.

(p) Not applicable.

Other Exhibits:

Powers of Attorney of: John D. Carifa, Sam Y.
Cross, Charles H.P. Duell, William H. Foulk, Jr.,
David K. Storrs, Shelby White, Dave H. Williams -
Incorporated by reference to Other Exhibits to
Post-Effective Amendment No. 32 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-
61564 and 811-2835) filed with the Securities and
Exchange Commission on October 28, 1998.

ITEM 24. Persons Controlled by or Under Common Control with
Registrant.

None.

ITEM 25. Indemnification

It is the Registrant's policy to indemnify its trustees
and officers, employees and other agents as set forth in
Article V of Registrant's Agreement and Declaration of

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<PAGE>

Trust, filed as Exhibit (a) in response to Item 23 and
Section 7 of the Distribution Agreement filed as Exhibit
(e) in response to Item 23, all as set forth below. The
liability of the Registrant's trustees and officers is
also dealt with in Article V of Registrant's Agreement
and Declaration of Trust. The Adviser's liability for
loss suffered by the Registrant or its shareholders is
set forth in Section 4 of the Advisory Agreement filed
as Exhibit (d) in response to Item 23, as set forth
below.

Article V of Registrant's Agreement and Declaration of
Trust reads as follows:

Section 5.1 - No Personal Liability of Shareholders,
Trustees, etc.
No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with
Trust Property, including the property of any series of
the Trust, or the acts, obligations or affairs of the
Trust or any series thereof. No Trustee, officer,
employee or agent of the Trust shall be subject to any
personal liability whatsoever to any Person, other than
the Trust or applicable series thereof or its
Shareholders, in connection with Trust Property or the
property of any series thereof or the affairs of the
Trust or any series thereof, save only that arising from
bad faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person; and all
such Persons shall look solely to the Trust Property or
the property of the appropriate series of the Trust for
satisfaction of claims of any nature arising in
connection with the affairs of the Trust or any series
thereof. If any Shareholder, Trustee, officer, employee
or agent, as such, of the Trust is made a party to any
suit or proceeding to enforce any such liability, he
shall not, on account thereof, be held to any personal
liability. The Trust shall indemnify and hold each
Shareholder harmless from and against all claims by
reason of his being or having been a Shareholder, and
shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with
any such claim or liability, provided that any such
expenses shall be paid solely out of the funds and
property of the series of the Trust with respect to
which such Shareholder's Shares are issued. The rights
accruing to a Shareholder under this Section 5.1 shall
not exclude any other right to which such Shareholder
may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify

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<PAGE>

or reimburse a Shareholder in any appropriate situation
even though no specifically provided herein.

Section 5.2 - Non-Liability of Trustees, etc. No
Trustee, officer, employee or agent of the Trust shall
be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including
without limitation the failure to compel in any way any
former or acting Trustee to redress any breach of trust)
except for his own bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties.

Section 5.3 - Indemnification.
(a) The Trustees shall provide for indemnification by
the Trust (or by the appropriate series thereof) of
every person who is, or has been, a Trustee or officer
of the Trust against all liability and against all
expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer
and against amounts paid or incurred by him in the
settlement thereof, in such manner as the Trustees may
provide from time to time in the By-Laws.

(b) The words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits
or proceedings (civil, criminal, or other, including
appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other
liabilities.

Section 5.4 - No Bond Required of Trustees. No Trustee
shall be obligated to give any bond or other security
for performance of any of his duties hereunder.

Section 5.5 - No Duty of Investigation; Notice in Trust
Instruments, Insurance. No purchaser, lender, transfer
agent or other Person dealing with the Trustees or any
officer, employee or agent of the Trust shall be bound
to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by
said officer, employee or agent or be liable for the
application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the
Trust or undertaking, and every other act or thing

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<PAGE>

whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done
by the executors thereof only in their capacity as
Trustees under the Declaration or in their capacity as
officers, employees or agents of the Trust. Every
written obligation, contract, instrument, certificate,
Share, other security of the Trust or undertaking made
or issued by the Trustees shall recite that the same is
executed or made by them not individually, but as
Trustees under the Declaration, and that the obligations
of any such instrument are not binding upon any of the
Trustees or Shareholders, individually, but bind only
the Trust Property or the property of the appropriate
series of the Trust, and may contain any further recital
which they or he may deem appropriate, but the omission
of such recital shall not operate to bind the Trustees
or Shareholders individually. The Trustees shall at all
times maintain insurance for the protection of the Trust
Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees
shall deem adequate to cover possible tort liability,
and such other insurance as the Trustees in their sole
judgment shall deem advisable.

Section 5.6 - Reliance on Experts, etc. Each Trustee
and officer or employee of the Trust shall, in the
performance of his duties, be fully and completely
justified and protected with regard to any act or any
failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust,
upon an opinion of counsel or upon reports made to the
Trust by any of its officers or employees or by the
Investment Adviser, the Distributor, Transfer Agent,
selected dealers, accountants, appraisers or other
experts or consultants selected with reasonable care by
the Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may also be
a Trustee.

The Advisory Agreement between Registrant and Alliance
Capital Management L.P. provides that Alliance Capital
Management L.P. will not be liable under such agreement
for any mistake of judgment or in any event whatsoever
except for lack of good faith and that nothing therein
shall be deemed to protect, or purport to protect,
Alliance Capital Management L.P. against any liability
to Registrant or its security holders to which it would
otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its
duties thereunder, or by reason of reckless disregard of
its obligations and duties thereunder.

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<PAGE>

The Distribution Agreement between the Registrant and
Alliance Fund Distributors, Inc. provides that the
Registrant will indemnify, defend and hold Alliance Fund
Distributors, Inc., and any person who controls it
within the meaning of Section 15 of the Investment
Company Act of 1940, free and harmless from and against
any and all claims, demands, liabilities and expenses
which Alliance Fund Distributors, Inc. or any
controlling person may incur arising out of or based
upon any alleged untrue statement of a material fact
contained in Registrant's Registration Statement or
Prospectus or Statement of Additional Information or
arising out of, or based upon any alleged omission to
state a material fact required to be stated in or
necessary to make the statements in either thereof not
misleading; provided, however that nothing therein shall
be so construed as to protect Alliance Fund
Distributors, Inc. against any liability to Registrant
or its security holders to which it would otherwise be
subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties
thereunder, or by reason of reckless disregard of its
obligations and duties thereunder.

The foregoing summaries are qualified by the entire text
of Registrant's Agreement and Declaration of Trust, the
Advisory Agreement between Registrant and Alliance
Capital Management L.P. and the Distribution Agreement
between Registrant and Alliance Fund Distributors, Inc.

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

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<PAGE>

In accordance with Release No. IC-11330 (September 2,
1980) the Registrant will indemnify its directors,
officers, investment manager and principal underwriters
only if (1) a final decision on the merits was issued by
the court or other body before whom the proceeding was
brought that the person to be indemnified (the
"indemnitee") was not liable by reason or willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office ("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the facts,
that the indemnitee was not liable of disabling conduct,
by (a) the vote of a majority of a quorum of the
directors who are neither "interested persons" of the
Registrant as defined in section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the
proceeding ("disinterested, non-party directors"), or
(b) an independent legal counsel in a written opinion.
The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers, investment
adviser or principal underwriters in defending a
proceeding, upon the undertaking by or on behalf of the
indemnitee to repay the advance unless it is ultimately
determined that he is entitled to indemnification and,
as a condition to the advance, (1) the indemnitee shall
provide a security for his undertaking, (2) the
Registrant shall be insured against losses arising by
reason of any lawful advances, or (3) a majority of a
quorum of disinterested, non-party directors of the
Registrant, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to
indemnification.

The Registrant participates in a joint directors and
officers liability insurance policy issued by the ICI
Mutual Insurance Company. Coverage under this policy
has been extended to directors, trustees and officers of
the investment companies managed by Alliance Capital
Management L.P. Under this policy, outside trustees and
directors would be covered up to the limits specified
for any claim against them for acts committed in their
capacities as trustee or director. A pro rata share of
the premium for this coverage is charged to each
investment company.

ITEM 26. Business and Other Connections of Investment Adviser.

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<PAGE>

The descriptions of Alliance Capital Management L.P.
under the caption "The Adviser" in the Prospectus and
"Management of the Fund" in the Prospectus and in the
Statement of Additional Information constituting Parts A
and B, respectively, of this Registration Statement are
incorporated by reference herein.

The information as to the directors and executive
officers of Alliance Capital Management Corporation, the
general partner of Alliance Capital Management L.P., set
forth in Alliance Capital Management L.P.'s Form ADV
filed with the Securities and Exchange Commission on
April 21, 1988 (File No. 801-32361) and amended through
the date hereof, is incorporated by reference.

ITEM 27. Principal Underwriters

(a) Alliance Fund Distributors, Inc., the Registrant's
Principal Underwriter in connection with the sale
of shares of the Registrant. Alliance Fund
Distributors, Inc. also acts as Principal
Underwriter or Distributor for the following
investment companies:

AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Disciplined Value Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Health Care Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Institutional Funds, Inc.
Alliance Institutional Reserves, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income

C-8

<PAGE>

Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios

(b) The following are the Directors and Officers of
Alliance Fund Distributors, Inc., the principal
place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.

POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT

Michael J. Laughlin Director and Chairman

John D. Carifa Director [President],
Director/Trustee

Robert L. Errico Director and President

Geoffrey L. Hyde Director and Senior Vice
President

Dave H. Williams Director

David Conine Executive Vice President

Richard K. Saccullo Executive Vice President

Edmund P. Bergan, Jr. Senior Vice President, Secretary Clerk
General Counsel and
Secretary

Richard A. Davies Senior Vice President
Managing Director

Robert H. Joseph, Jr. Senior Vice President and
Chief Financial Officer

Anne S. Drennan Senior Vice President &
Treasurer

Benji A. Baer Senior Vice President

C-9

<PAGE>

John R. Bonczek Senior Vice President

Karen J. Bullot Senior Vice President

John R. Carl Senior Vice President

James S. Comforti Senior Vice President

James L. Cronin Senior Vice President

Byron M. Davis Senior Vice President

Mark J. Dunbar Senior Vice President

Donald N. Fritts Senior Vice President

Andrew L. Gangolf Senior Vice President Assistant
and Assistant General Secretary/
Counsel Assistant Clerk

Bradley F. Hanson Senior Vice President

George H. Keith Senior Vice President

Richard E. Khaleel Senior Vice President

Stephen R. Laut Senior Vice President

Susan L. Matteson-King Senior Vice President

Daniel D. McGinley Senior Vice President

Antonios G. Poleondakis Senior Vice President

Robert E. Powers Senior Vice President

Domenick Pugliese Senior Vice President Assistant
and Assistant General Secretary/
Counsel Assistant Clerk

Kevin A. Rowell Senior Vice President

John P. Schmidt Senior Vice President

Raymond S. Sclafani Senior Vice President

Gregory K. Shannahan Senior Vice President

Scott C. Sipple Senior Vice President

Joseph F. Sumanski Senior Vice President

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<PAGE>

Peter J. Szabo Senior Vice President

William C. White Senior Vice President

Richard A. Winge Senior Vice President

Emilie D. Wrapp Senior Vice President and
Assistant General Counsel

Gerard J. Friscia Vice President &
Controller

Ricardo Arreola Vice President

Kenneth F. Barkoff Vice President

Adam J. Barnett Vice President

Charles M. Barrett Vice President

Matthew F. Beaudry Vice President

(R)Leo Benitez Vice President

Gregory P. Best Vice President

Dale E. Boyd Vice President

Robert F. Brendli Vice President

Christopher L. Butts Vice President

Thomas C. Callahan Vice President

Kevin T. Cannon Vice President

John M. Capeci Vice President

John P. Chase Vice President

Doris T. Ciliberti Vice President

William W. Collins, Jr. Vice President

Leo H. Cook Vice President

Russell R. Corby Vice President

John W. Cronin Vice President

Robert J. Cruz Vice President

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<PAGE>

Richard W. Dabney Vice President

Daniel J. Deckman Vice President

Sherry V. Delaney Vice President

Richard P. Dyson Vice President

John C. Endahl Vice President

John E. English Vice President

Sohaila S. Farsheed Vice President

Daniel J. Frank Vice President

Shawn C. Gage Vice President

Joseph C. Gallagher Vice President

Michael J. Germain Vice President

Mark D. Gersten Vice President Treasurer and
Chief Financial
Officer

Hyman Glasman Vice President

John Grambone Vice President

Charles M. Greenberg Vice President

Alan Halfenger Vice President

William B. Hanigan Vice President

Michael S. Hart Vice President

Scott F. Heyer Vice President

Timothy A. Hill Vice President

Brian R. Hoegee Vice President

George R. Hrabovsky Vice President

Michael J. Hutten Vice President

Scott Hutton Vice President

Oscar J. Isoba Vice President

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<PAGE>

Richard D. Keppler Vice President

Richard D. Kozlowski Vice President

Daniel W. Krause Vice President

Donna M. Lamback Vice President

P. Dean Lampe Vice President

Henry Michael Lesmeister Vice President

Eric L. Levinson Vice President

James M. Liptrot Vice President

James P. Luisi Vice President

Michael F. Mahoney Vice President

Kathryn Austin Masters Vice President

Shawn P. McClain Vice President

David L. McGuire Vice President

Jeffrey P. Mellas Vice President

Michael V. Miller Vice President

Thomas F. Monnerat Vice President

Timothy S. Mulloy Vice President

Joanna D. Murray Vice President

Michael F. Nash, Jr. Vice President

Timothy H. Nasworthy Vice President

Nicole Nolan-Koester Vice President

Daniel A. Notto Vice President

Peter J. O'Brien Vice President

John C. O'Connell Vice President

John J. O'Connor Vice President

Daniel P. O'Donnell Vice President

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<PAGE>

Richard J. Olszewski Vice President

Catherine N. Peterson Vice President

Jeffrey R. Petersen Vice President

James J. Posch Vice President

Bruce W. Reitz Vice President

Jeffrey B. Rood Vice President

Karen C. Satterberg Vice President

Robert C. Schultz Vice President

Richard J. Sidell Vice President

Clara Sierra Vice President

Teris A. Sinclair Vice President

Jeffrey C. Smith Vice President

David A. Solon Vice President

Martine H. Stansbery, Jr. Vice President

Eileen Stauber Vice President

Michael J. Tobin Vice President

Joseph T. Tocyloski Vice President

Benjamin H. Travers Vice President

David R. Turnbough Vice President

Andrew B. Vaughey Vice President

Wayne W. Wagner Vice President

Mark E. Westmoreland Vice President

Paul C. Wharf Vice President

Stephen P. Wood Vice President

Keith A. Yoho Vice President

Michael W. Alexander Assistant Vice President

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<PAGE>

Richard J. Appaluccio Assistant Vice President

Paul G. Bishop Assistant Vice President

Mark S. Burns Assistant Vice President

Maria L. Carreras Assistant Vice President

Judith A. Chin Assistant Vice President

Jorge Ciprian Assistant Vice President

William P. Condon Assistant Vice President

Jean A. Coomber Assistant Vice President

Dorsey Davidge Assistant Vice President

Ralph A. DiMeglio Assistant Vice President

Faith C. Deutsch Assistant Vice President

Timothy J. Donegan Assistant Vice President

Joan Eilbott Assistant Vice President

Adam E. Engelhardt Assistant Vice President

Michael J. Eustic Assistant Vice President

Michele Grossman Assistant Vice President

Arthur F. Hoyt, Jr. Assistant Vice President

David A. Hunt Assistant Vice President

Theresa Iosca Assistant Vice President

Erik A. Jorgensen Assistant Vice President

Eric G. Kalender Assistant Vice President

Elizabeth E. Keefe Assistant Vice President

Edward W. Kelly Assistant Vice President

Victor Kopelakis Assistant Vice President

Jeffrey M. Kusterer Assistant Vice President

Alexandra C. Landau Assistant Vice President

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Laurel E. Lindner Assistant Vice President

Evamarie C. Lombardo Assistant Vice President

Amanda C. McNichol Assistant Vice President

Richard F. Meier Assistant Vice President

Charles B. Nanick Assistant Vice President

Alex E. Pady Assistant Vice President

Raymond E. Parker Assistant Vice President

Wandra M. Perry-Hartsfield Assistant Vice President

Rizwan A. Raja Assistant Vice President

Carol H. Rappa Assistant Vice President

Brendan J. Reynolds Assistant Vice President

James A. Rie Assistant Vice President

Lauryn A. Rivello Assistant Vice President

Christina Santiago Assistant Vice Assistant Vice
President and Counsel President and
and Counsel Counsel

Nancy D. Testa Assistant Vice President

Margaret M. Tompkins Assistant Vice President

Marie R. Vogel Assistant Vice President

Nina C. Wilkinson Assistant Vice President

Wesley S. Williams Assistant Vice President

Matthew Witschel Assistant Vice President

Mark R. Manley Assistant Secretary

ITEM 28. Location of Accounts and Records.

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The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder
are maintained as follows: journals, ledgers, securities
records and other original records are maintained
principally at the offices of Alliance Fund Services,
Inc. 500 Plaza Drive, Secaucus, New Jersey 07094 and at
the offices of State Street Bank and Trust Company, the
Registrant's Custodian, 225 Franklin Street, Boston,
Massachusetts 02110. All other records so required to
be maintained are maintained at the offices of Alliance
Capital Management L.P., 1345 Avenue of the Americas,
New York, New York 10105.

ITEM 29. Management Services.

Not applicable.

ITEM 30. Undertakings.

The Registrant undertakes to furnish each person to whom
a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon request
and without charge.

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<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant certifies that it meets all of the requirements
for effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York on the
27th day of October, 2000.

ALLIANCE CAPITAL RESERVES
by/s/ Ronald M. Whitehill
________________________
Ronald M. Whitehill
President

Pursuant to the requirements of the Securities Act of l933,
as amended, this Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated:

Signature Title Date

1) Principal
Executive Officer

/s/ Ronald M. Whitehill President October 27, 2000
_______________________
Ronald M. Whitehill

2) Principal Financial and
Accounting Officer

/s/ Mark D. Gersten Treasurer and October 27, 2000
___________________ Chief Financial
Mark D. Gersten Officer

C-18

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3) All of the Trustees
___________________

John D. Carifa David K. Stoors
Sam Y. Cross Shelby White
Charles H.P. Duell Dave H. Williams
William H. Foulk, Jr.

by/s/ Edmund P. Bergan, Jr October 27, 2000
__________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.

C-19

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Index to Exhibits

Page
(i) Opinion of Seward & Kissel LLP
(j) Consent of Independent Accountants

C-20
00250122.AO4