BABSON D L MONEY MARKET FUND INC, 485BPOS, 1996-10-24

BABSON D L MONEY MARKET FUND INC
485BPOS, 1996-10-24

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ______ [ ]

Post-Effective Amendment No. 23 File No. 2-65761 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 25 File No. 811-2963 [X]

D.L. BABSON MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)

2440 Pershing Road, G-15 Kansas City, Missouri 64108
(Address of Principal Executive Office)

Registrant's Telephone Number,including Area Code (816)_471-5200

Larry D. Armel, President, D.L. BABSON MONEY MARKET FUND, INC.
2440 Pershing Road, G-15, Kansas City, Missouri 64108
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: October 31, 1996

It is proposed that this filing become effective:

X On October 31, 1996, pursuant to paragraph (b) of Rule 485

Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the Invest-
ment Company Act of 1940, and will file its required Rule 24f-2 Notice
for the Registrant's fiscal year ended June 30, 1997, by August 30,
1997.

Please address inquiries and a carbon copy of all
and communications to: communications to:
John G. Dyer, Esq. Mark H. Plafker, Esq.
D.L. BABSON MONEY MARKET Stradley, Ronon, Stevens & Young
FUND, INC. 2600 One Commerce Square
2440 Pershing Road, G-15 Philadelphia, PA 19103-7098
Kansas City, MO 64108 Telephone: (215) 564-8024
Telephone: (816) 471-5200

1
<PAGE>

D.L. BABSON MONEY MARKET FUND, INC.

CROSS REFERENCE SHEET

Form N-1A Item Number Location in Prospectus

Item 1. Cover Page . . . . . . . . . . . . . Cover Page

Item 2. Synopsis . . . . . . . . . . . . . . Not Applicable

Item 3. Condensed Financial Information . . Per Share Capital and
Income Changes

Item 4. General Description of Registrant. . Investment Objective
and Portfolio
Management Policy

Item 5. Management of the Fund . . . . . . . Officers and Directors;
Management and
Investment Counsel

Item 6. Capital Stock and Other Securities . How to Purchase Shares;
How to Redeem Shares;
How Share Price is
Determined; General
Information and
History; How Share
Price is Determined
Dividends Distributions
and their Taxation

Item 7. Purchase of Securities . . . . . . . Cover Page; How to
being Offered Purchase Shares;
Shareholder Services

Item 8. Redemption or Repurchase . . . . . . How to Redeem Shares

Item 9. Pending Legal Proceedings . . . . . Not Applicable

2
<PAGE>

D.L. BABSON MONEY MARKET FUND, INC.

CROSS REFERENCE SHEET (CONTINUED)

Location in Statement
of Additional
Form N-1A Item Number Information

Item 10. Cover Page . . . . . . . . . . . . . Cover Page

Item 11. Table of Contents . . . . . . . . . Cover Page

Item 12. General Information and History . . Investment Objectives
and Policies;
Management and
Investment Counsel

Item 13. Investment Objectives and Policies . Investment Objectives
and Policies;
Investment Restrictions

Item 14. Management of the Fund . . . . . . . Management and
Investment Counsel

Item 15. Control Persons and Principal . . . Management and
Holders of Securities Investment Counsel;
Officers and Directors

Item 16. Investment Advisory and other . . . Management and
Services Investment Counsel;
Shareholder Services
(Prospectus)

Item 17. Brokerage Allocation . . . . . . . . Portfolio Transactions

Item 18. Capital Stock and Other Securities . General Information;
Financial Statements

Item 19. Purchase, Redemption and Pricing . . How Share Purchases
of Securities Being Offered are Handled; Redemption
of Shares
Financial Statements

Item 20. Tax Status . . . . . . . . . . . . . Dividends,
Distributions and their
Taxation (in prospectus

Item 21. Underwriters . . . . . . . . . . . . How the Fund's Shares
are Distributed

Item 22. Calculation of Yield Quotations . . Performance Measures
of Money Market Fund

Item 23. Financial Statements . . . . . . . . Incorporated by
Reference

3
<PAGE>

BABSON
MONEY
MARKET
FUND

Prospectus
October 31, 1996

A no-load mutual fund invested in high
quality short-term debt instruments for
the purpose of maximizing income to the
extent consistent with safety of principal
and maintenance of liquidity.

JONES & BABSON
MUTUAL FUNDS

PROSPECTUS
October 31, 1996

D. L. BABSON
MONEY MARKET
FUND, INC.

Managed and Distributed By:
JONES & BABSON, INC.
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Toll-Free 1-800-4-BABSON
(1-800-422-2766)
In the Kansas City area 471-5200

Investment Counsel:
DAVID L. BABSON & CO. INC.
Cambridge, Massachusetts

INVESTMENT OBJECTIVE

The Babson Money Market Fund offers two Portfolios to investors who share the
Fund's investment goal of maximizing income consistent with safety of
principal and liquidity, and who desire to have their investment receive
continuous portfolio supervision by the staff of David L. Babson & Co. Inc.

Each Portfolio seeks to maintain, but does not guarantee, a constant net asset
value of $1.00 per share. Although each Portfolio invests in high quality
instruments, the shares of the Portfolios are not insured or guaranteed by the
U.S. Government and there can be no assurance that each Portfolio will be able
to maintain a constant net asset value per share.

PURCHASE INFORMATION
Minimum Investment
(each Portfolio selected)

Initial Purchase $ 1,000
Initial IRA and Uniform Transfers (Gifts)
to Minors Purchases $ 250
Subsequent Purchase:
By Mail or Telephone Purchase (ACH) $ 100
By Wire $ 1,000
All Automatic Monthly Purchases $ 50

Shares are purchased and redeemed at net asset value. There are no sales,
redemption or Rule 12b-1 distribution charges. If you need further
information, please call the Fund at the telephone numbers indicated.

ADDITIONAL INFORMATION

This prospectus should be read and retained for future reference. It contains
the information that you should know before you invest. A "Statement of
Additional Information" of the same date as this prospectus has been filed
with the Securities and Exchange Commission and is incorporated by reference.
Investors desiring additional information about the Fund may obtain a copy
without charge by writing or calling the Fund.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

Page
Fund Expenses
Financial Highlights
Investment Objective and Portfolio Management Policy
Repurchase Agreements
Risk Factors Peculiar to Money Market Instruments
Investment Restrictions
Performance Measures
How to Purchase Shares
Initial Investments
Investments Subsequent to Initial Investments
Telephone Investment Service
Automatic Monthly Investment Plan
How to Redeem Shares
Systematic Redemption Plan
How to Exchange Shares Between Portfolios and Funds
How Share Price is Determined
Officers and Directors
Management and Investment Counsel
General Information and History
Dividends, Distributions and Their Taxation
Shareholder Services
Shareholder Inquiries

FUND EXPENSES
FEDERAL PORTFOLIO

Shareholder Transaction Expenses
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)
Management fees .85%
12b-1 fees None
Other expenses .06%
Total Fund operating expenses .91%

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

1 Year 3 Year 5 Year 10 Year
$9 $29 $51 $112

PRIME PORTFOLIO

Shareholder Transaction Expenses
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)
Management fees .85%
12b-1 fees None
Other expenses .07%
Total Fund operating expenses .92%

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

1 Year 3 Year 5 Year 10 Year
$9 $29 $51 $113

The above information is provided in order to assist you in understanding the
various costs and expenses that a shareholder of the Fund will bear directly
or indirectly. The expenses set forth above are for the fiscal year ended
June 30, 1996. The example should not be considered a representation of past
or future expenses. Actual expenses may be greater or less than those shown.

D. L. BABSON MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS

The following financial highlights for each of the ten years in the period
ended June 30, 1996, have been derived from audited financial statements of
D.L. Babson Money Market Fund, Inc. Such information for each of the five
years in the period ended June 30, 1996, should be read in conjunction with
the financial statements of the Fund and the report of Arthur Andersen LLP,
independent public accountants, appearing in the June 30, 1996, Annual
Report to Shareholders which is incorporated by reference in this prospectus.
The information for each of the five years in the period ended June 30, 1991,
is not covered by the report of Arthur Andersen LLP.

<TABLE>
<CAPTION>
FEDERAL PORTFOLIO 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.05 0.04 0.02 0.02 0.04 0.06 0.08 0.08 0.06 0.05
Less distributions:
Dividends from net
investment income (0.05) (0.04) (0.02) (0.02) (0.04) (0.06) (0.08) (0.08) (0.06) (0.05)
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 5% 5% 3% 3% 4% 7% 8% 8% 6% 5%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 10 $ 10 $ 10 $ 9 $ 11 $ 14 $ 11 $ 10 $ 8 $ 4
Ratio of expenses to average
net assets 0.91% 0.92% 0.91% 0.90% 0.89% 0.88% 0.89% 0.88% 0.89% 0.89%
Ratio of net investment income to
average net assets 4.67% 4.48% 2.47% 2.51% 4.14% 6.28% 7.63% 7.89% 5.93% 5.22%

<CAPTION>
PRIME PORTFOLIO 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
</CAPTION>

Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.05 0.05 0.03 0.02 0.04 0.07 0.08 0.08 0.06 0.05
Less distributions:
Dividends from net
investment income (0.05) (0.05) (0.03) (0.02) (0.04) (0.07) (0.08) (0.08) (0.06) (0.05)
Net asset value end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 5% 5% 3% 3% 4% 7% 8% 8% 6% 6%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 36 $ 40 $ 43 $ 45 $ 60 $ 79 $ 77 $ 81 $ 73 $ 58
Ratio of expenses to average
net assets 0.92% 0.92% 0.92% 0.90% 0.89% 0.88% 0.88% 0.89% 0.90% 0.89%
Ratio of net investment income to
average net assets 4.75% 4.58% 2.51% 2.53% 4.21% 6.53% 7.73% 8.03% 6.16% 5.43%
</TABLE>

INVESTMENT OBJECTIVE and
PORTFOLIO MANAGEMENT POLICY

Babson Money Market Fund offers two separate Portfolios, each of which
invests in high quality short-term debt instruments for the purpose of
maximizing income consistent with safety of principal and liquidity.
Each Portfolio also seeks to maintain a constant price of $1.00 per
share. Neither Portfolio's objective can be changed without the approval
of a majority of its outstanding shares. Each Portfolio will limit its
holdings to the types of securities hereinafter described.

FEDERAL PORTFOLIO

The Federal Portfolio will invest only in the following "U.S. Government
Securities":

1. Direct obligations of the U.S. Government, such as bills, notes,
bonds and other debt securities issued by the U.S. treasury.

2. Obligations of U.S. government agencies and instrumentalities
which are secured by the full faith and credit of the U.S. treasury such
as securities of the Government National Mortgage Association, the
Export-Import Bank, or the Student Loan Marketing Association; or which
are secured by the right of the issuer to borrow from the Treasury, such
as securities issued by the Federal Financing Bank or the U.S. Postal
Service; or are supported by the credit of the government agency or
instrumentality itself, such as securities of the Federal Home Loan
Banks, or the Federal National Mortgage Association.

The Federal Portfolio also may invest in issues of the United States
treasury or United States government agencies subject to repurchase
agreements entered into with the seller of the issues. The use of
repurchase agreements by the Fund involves certain risks. For a
discussion of repurchase agreements and their risks see page 6.

PRIME PORTFOLIO

The Prime Portfolio may invest in any of the following in addition to
securities eligible for the Federal Portfolio:

1. Certificates of deposit, bankers' acceptances, and other short-
term obligations issued domestically by United States commercial banks
having assets of at least $1 billion and which are members of the
Federal Deposit Insurance Corporation, or holding companies of such
banks.

2. Commercial paper, including variable rate master demand notes of
companies whose commercial paper is rated P-2 or higher by Moody's
Investors Service, Inc. (Moody's) or A-2 or higher by Standard and
Poor's Corporation (S&P). If not rated by either Moody's or S&P, a
company's commercial paper, including variable rate master demand notes,
may be purchased by the Portfolio if the company has an outstanding bond
issue rated Aa or higher by Moody's or AA or higher by S&P. Variable
rate master demand notes represent a borrowing arrangement under a
letter of agreement between a commercial paper issuer and an
institutional lender. Applicable interest rates are determined on a
formula basis and are adjusted on a monthly, quarterly, or other term as
set out in the agreement. They vary as to the right of the lender to
demand payment. (For a description of money market securities and their
ratings, see "Money Market Securities Described and Ratings" in the
"Statement of Additional Information.")

3. Short-term debt securities which are non-convertible and which
have one year or less remaining to maturity at the date of purchase and
which are rated Aa or higher by Moody's or AA or higher by S&P.

4. Negotiable certificates of deposit and other short-term debt
obligations of savings and loan associations having assets of at least
$1 billion and which are members of the Federal Home Loan Banks
Association and insured by the Federal Deposit Insurance Corporation.

To achieve its objectives the Fund may engage in trading activity in
order to take advantage of opportunities to enhance yield, protect
principal or improve liquidity. This trading activity should not
increase the Fund's expenses, since there are normally no broker's
commissions paid by the Fund for the purchase or sale of money market
instruments. However, a markup or spread may be paid to a dealer from
which the Fund purchases a security.

To assure compliance with adopted procedures pursuant to Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act"), the Fund will only
invest in U.S. dollar denominated securities with remaining maturities
of 397 days or less, maintain the dollar weighted average maturity of
the securities in the Fund's portfolio at 90 days or less and limit its
investments to those instruments which the Directors of the Fund
determines present minimal credit risks and which are eligible
investments under the rule.

REPURCHASE AGREEMENTS

A repurchase agreement involves the sale of securities to the Portfolio
with the concurrent agreement by the seller to repurchase the securities
at the Portfolio's cost plus interest at an agreed rate upon demand or
within a specified time, thereby determining the yield during the
purchaser's period of ownership. This results in a fixed rate of return
insulated from market fluctuations during such period. Under the
Investment Company Act of 1940, repurchase agreements are considered
loans by the Fund.

The Fund will enter into such repurchase agreements only with United
States banks having assets in excess of $1 billion which are members of
the Federal Deposit Insurance Corporation, and with certain securities
dealers who meet the qualifications set from time to time by the Board
of Directors of the Fund. Securities subject to a repurchase agreement
may bear maturities exceeding one year but the term of the repurchase
agreement normally will be no longer than a few days. Repurchase
agreements maturing in more than seven days and other illiquid
securities will not exceed 10% of the total assets of the Portfolio.

Risk Factors Applicable to
Repurchase Agreements

Repurchase agreements involve investments in debt securities where the
seller (broker-dealer or bank) agrees to repurchase the securities from
the Fund at cost plus an agreed-to interest rate within a specified
time. A risk of repurchase agreements is that if the seller seeks the
protection of the bankruptcy laws, the Fund's ability to liquidate the
security involved could be temporarily impaired, and it subsequently
might incur a loss if the value of the security declines or if the other
party to a repurchase agreement defaults on its obligation. There is
also the risk that the Fund may be delayed or prevented from exercising
its rights to dispose of the collateral.

RISK FACTORS PECULIAR TO
MONEY MARKET INSTRUMENTS

The yield and the principal value of money market instruments are
sensitive to short-term lending conditions, and it is possible that an
issuer may default. The Fund will seek to minimize these risks through
portfolio diversification, careful portfolio selection among securities
considered to be high quality and by maintaining short average
maturities.

Concentration of assets in the banking industry may increase the element
of risk because banks are highly leveraged. The manager believes this
risk is reduced because purchases will be limited to banks which are
members of the Federal Deposit Insurance Corporation, although
securities purchased by the Fund may not be F.D.I.C. insured deposits.
Furthermore, the manager will carefully evaluate the financial ratios
and asset characteristics of banks in which the Fund might invest, and
reject those banks whose financial ratios and asset characteristics are
not, in the manager's opinion, sufficiently strong.

INVESTMENT RESTRICTIONS

In addition to the policies set forth under the caption "Investment
Objective and Portfolio Management Policy" the Fund is subject to
certain other restrictions which may not be changed without approval of
the "holders of a majority of the outstanding shares" of the Fund or the
affected Portfolio. Among these restrictions, the more important ones
are that the Fund (Portfolio) will not invest in equity securities;
purchase the securities of any issuer if more than 5% of the Fund's
total assets would be invested in the securities of such issuer, or the
Fund would hold more than 10% of any class of securities of such issuer;
borrow money in excess of 15% of total assets taken at market value, and
then only from banks as a temporary measure for extraordinary or
emergency purposes; will not borrow to increase income (leveraging) but
only to facilitate redemption requests which might otherwise require
untimely dispositions of portfolio securities; will repay all borrowings
before making additional investments (interest paid on such borrowings
will reduce net income). The full text of these restrictions is set
forth in the "Statement of Additional Information."

There is no limitation with respect to investments in U.S. Treasury
Bills, or other obligations issued or guaranteed by the federal
government, its agencies and instrumentalities.

PERFORMANCE MEASURES

From time to time, the Fund may advertise its performance in various
ways, as summarized below. Further discussion of these matters also
appears in the "Statement of Additional Information."

Yield

From time to time, each Portfolio may advertise "yield" and "effective
yield." The "yield" of a Fund refers to the income generated by an
investment in a Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is,
the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as
a percentage of the investment. The "effective yield" is calculated
similarly, but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment.

Each Portfolio of the Fund may quote its yield in advertisements or in
reports to shareholders. Yield information may be useful in reviewing
the performance of the Fund Portfolios and in providing a basis for
comparison with other investment alternatives. However, since the net
investment income of these Funds changes in response to fluctuations in
interest rates and Fund expenses, any given yield quotations should not
be considered representative of the Fund's yields for any future period.
Current yield and price quotations for the Fund may be obtained by
telephoning 1-800-4-BABSON (1-800-422-2766), or in the
Kansas City area 471-5200.

Performance Comparisons

In advertisements or in reports to shareholders, the Fund may compare
its performance to that of other mutual funds with similar investment
objectives and to stock or other relevant indices. For example, each
Portfolio may compare its yields to the Donoghue's Money Fund Average
and the Donoghue's Government Money Fund Average which are averages
compiled by Donoghue's Money Fund Report, a widely recognized
independent publication that monitors the performance of money market
mutual funds, or to the average yield reported by the Bank Rate Monitor
for money market deposit accounts offered by the 50 leading banks and
thrift institutions in the top five standard metropolitan statistical
areas. Performance comparisons should not be considered as
representative of the future performance of any Fund. Further
information regarding the performance of the Fund is contained in the
"Statement of Additional Information."

Performance rankings, recommendations, published editorial comments and
listings reported in Money, Barron's, Kiplinger's Personal Finance
Magazine, Financial World, Forbes, U.S. News & World Report, Business
Week, The Wall Street Journal, Investors Business Daily, USA Today,
Fortune and Stanger's may also be cited (if the Fund is listed in any
such publication) or used for comparison, as well as performance
listings and rankings from Morningstar Mutual Funds, Personal Finance,
Income and Safety, The Mutual Fund Letter, No-Load Fund Investor, United
Mutual Fund Selector, No-Load Fund Analyst, No- Load Fund X, Louis
Rukeyser's Wall Street newsletter, Donoghue's Money Letter, CDA
Investment Technologies, Inc., Wiesenberger Investment Companies
Service, and Donoghue's Mutual Fund Almanac.

HOW TO PURCHASE SHARES

Shares are purchased at net asset value (no sales charge) from the Fund
through its agent, Jones & Babson, Inc., 2440 Pershing Road, Suite G-15,
Kansas City, MO 64108. For information call toll free 1-800-4-BABSON (1-
800-422-2766), or in the Kansas City area 471-5200. If an investor
wishes to engage the services of any other broker to purchase (or
redeem) shares of the Fund, a fee may be charged by such broker. The
Fund will not be responsible for the consequences of delays including
delays in the banking or Federal Reserve wire systems.

You do not pay a sales commission when you buy shares of the Fund.
Shares are purchased at the Fund's net asset value (price) per share
next effective after a purchase order and payment have been received by
the Fund. Normally, but not necessarily, this price will be $1.00. (See
"How Share Price is Determined.") In the case of certain institutions
which have made satisfactory payment arrangements with the Fund, orders
may be processed at the net asset value per share next effective after a
purchase order has been received by the Fund.

The Fund reserves the right in its sole discretion to withdraw all or
any part of the offerings made by the prospectus or to reject purchase
orders when, in the judgment of management, such withdrawal or rejection
is in the best interest of the Fund and its shareholders. The Fund also
reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with
respect to any person or class of persons, which includes shareholders
of the Fund's special investment programs. The Fund reserves the right
to refuse to accept orders for Fund shares unless accompanied by
payment, except when a responsible person has indemnified the Fund
against losses resulting from the failure of investors
to make payment. In the event that the Fund sustains a loss as the
result of failure by a purchaser to make payment, the Fund's
underwriter, Jones & Babson, Inc. will cover the loss.

INITIAL INVESTMENTS

Initial investments - By mail. You may open an account and make an
investment by completing and signing the application which accompanies
this prospectus. Make your check ($1,000 minimum for each Portfolio
selected unless your purchase is pursuant to an IRA or the Uniform
Transfers (Gifts) to Minors Act in which case the minimum initial
purchase is $250 for each Portfolio selected) payable to UMB Bank, n.a.
Mail your application and check to:

D.L. Babson Money Market Fund, Inc.
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Initial investments - By wire. You may purchase shares of the Fund by
wiring the purchase price ($1,000 minimum for each Portfolio selected)
through the Federal Reserve Bank to the custodian, UMB Bank, n.a. Prior
to sending your money, you must call the Fund toll free 1-800-4-BABSON
(1-800-422-2766), or in the Kansas City area 471-5200 and provide it
with the identity of the registered account owner, the registered
address, the Social Security or Taxpayer Identification Number of the
registered owner, the amount being wired, the name and telephone number
of the wiring bank and the person to be contacted in connection with the
order. You will then be provided a Fund account number, after which you
should instruct your bank to wire the specified amount, along with the
account number and the account registration to:

UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For Babson Money Market Fund, Inc.
Federal Portfolio/AC = 980103-3883
Prime Portfolio/AC = 980103-3581
For Account No. (insert assigned Fund account number and name in which
account is registered.)

A completed application must be sent to the Fund as soon as possible so
the necessary remaining information can be recorded in your account.
Payment of redemption proceeds will be delayed until the completed
application is received by the Fund.

INVESTMENTS SUBSEQUENT
TO INITIAL INVESTMENT

You may add to your Fund account at any time in amounts of $100 or more
if purchases are made by mail or telephone purchase (ACH), or $1,000 or
more if purchases are made by wire. Automatic monthly investments must
be in amounts of $50 or more.

Checks should be mailed to the Fund at its address, and make them
payable to UMB Bank, n.a. Always identify your account number or include
the detachable reminder stub which accompanies each confirmation.

Wire share purchases should include your account registration, your
account number and the Babson Fund (Portfolio) in which you are
purchasing shares. It also is advisable to notify the Fund by telephone
that you have sent a wire purchase order to the bank.

TELEPHONE INVESTMENT SERVICE

To use the Telephone Investment Service, you must first establish your
Fund account and authorize telephone orders in the application form, or,
subsequently, on a special authorization form provided upon request. If
you elect the Telephone Investment Service, you may purchase Fund shares
by telephone and authorize the Fund to draft your checking account ($100
minimum) for the cost of the shares so purchased. You will receive the
next available price after the Fund has received your telephone call.
Availability and continuance of this privilege is subject to acceptance
and approval by the Fund and all participating banks. During periods of
increased market activity, you may have difficulty reaching the Fund by
telephone, in which case you should contact the Fund by mail or
telegraph. The Fund will not be responsible for the consequences of
delays, including delays in the banking or Federal Reserve wire systems.

The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are not
followed, the Fund may be liable for losses due to unauthorized or
fraudulent instructions. Such procedures may include, but are not
limited to requiring personal identification prior to acting upon
instructions received by telephone, providing written confirmations of
such transactions, and/or tape recording of telephone instructions.

The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this
service at any time upon 15 days written notice to shareholders, and to
terminate or modify the privileges without prior notice in any
circumstances where such termination or modification is in the best
interest of the Fund and its investors.

AUTOMATIC MONTHLY
INVESTMENT PLAN

You may elect to make monthly investments in a constant dollar amount
from your checking account ($50 minimum). The Fund will draft your
checking account on the same day each month in the amount you authorize
in your application, or, subsequently, on a special authorization form
provided upon request. Availability and continuance of this privilege is
subject to acceptance and approval by the Fund and all participating
banks. If the date selected falls on a day upon which the Fund shares
are not priced, investment will be made on the first date thereafter
upon which Fund shares are priced. The Fund will not be responsible for
the consequences of delays, including delays in the banking or Federal
Reserve wire systems.

HOW TO REDEEM SHARES

Shareholders registered in the stock records of the Fund may withdraw
all or part of their investment by redeeming shares for which the Fund
has received unconditional payment in the form of federal funds or such
payment has been converted to federal funds and accepted by the Fund.
For your convenience, and to enable your account to continue earning daily
dividends as long as possible, the Fund offers expedited redemption
procedures by telephone/telegraph and draft ("check"), in addition to
normal mail procedures.

In each instance you must comply with the general requirements relating
to all redemptions as well as with specific requirements set out for the
particular redemption method you select. If you wish to expedite
redemptions by using the telephone/telegraph or draft writing (check)
privileges, you should carefully note the special requirements and
limitations relating to these methods. If an investor wishes to engage
the services of any other broker to redeem (or purchase) shares of the
Fund, a fee may be charged by such broker.

Where additional documentation is normally required to support
redemptions as in the case of corporations, fiduciaries, and others who
hold shares in a representative or nominee capacity, such as certified
copies of corporate resolutions, or certificates of incumbency, or such
other documentation as may be required under the Uniform Commercial Code
or other applicable laws or regulations, it is the responsibility of the
shareholder to maintain such documentation on file and in a current
status. A failure to do so will delay the redemption. If you have
questions concerning redemption requirements, please write or telephone
the Fund well ahead of an anticipated redemption in order to avoid any
possible delay.

Requests which are subject to special conditions or which specify an
effective date other than as provided herein cannot be accepted. All
redemption requests must be transmitted to the Fund at 2440 Pershing
Road, Suite G-15, Kansas City, Missouri 64108. Shareholders who have
authorized telephone redemption may call toll free 1-800-4-BABSON (1-
800-422-2766), or in the Kansas City area 471-5200. The Fund will redeem
shares at the price (net asset value per share) next computed after
receipt of a redemption request in "good order." Normally this price
will be $1.00. (For more information on how the Fund intends to maintain
a constant price see "How Share Price is Determined.")

The Fund will endeavor to transmit redemption proceeds to the proper
party, as instructed, as soon as practicable after a redemption request
has been received in "good order" and accepted, but in no event later
than the third business day thereafter. Transmissions are made by mail
unless an expedited method has been authorized and specified in the
redemption request. The Fund will not be responsible for the
consequences of delays including delays in the banking or Federal
Reserve wire systems.

Redemptions will not become effective until all documents in the form
required have been received. In the case of redemption requests made
within 15 days of the date of purchase, the Fund will delay transmission
of proceeds until such time as it is certain that unconditional payment
in federal funds has been collected for the purchase of shares being
redeemed or 15 days from the date of purchase. You can avoid the
possibility of delay by paying for all of your purchases with a transfer
of federal funds.

Shares redeemed will be entitled to receive all dividends declared
through the date of redemption. If you redeem all of the shares in your
account, in addition to the share redemption check, a separate check
representing all dividends declared but unpaid on the shares redeemed
will be distributed on the next dividend payment date, according to your
dividend instructions on file with the Fund. Any amount due you in your
declared but unpaid dividend account cannot be redeemed by draft.

Signature Guarantees are required in connection with all redemptions of
$50,000 or more by mail, or changes in share registration, except as
hereinafter provided. These requirements may be waived by the Fund in
certain instances where it appears reasonable to do so and will not
unduly affect the interests of other shareholders. Signature(s) must be
guaranteed by an "eligible Guarantor institution" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor
institutions include: (1) national or state banks, savings associations,
savings and loan associations, trust companies, savings banks,
industrial loan companies and credit unions; (2) national securities
exchanges, registered securities associations and clearing agencies; or
(3) securities broker/dealers which are members of a national securities
exchange or clearing agency or which have a minimum net capital of
$100,000. A notarized signature will not be sufficient of the request to
be in proper form.

Signature guarantees will be waived for mail redemptions of $50,000 or
less, but they will be required if the checks are to be payable to
someone other than the registered owner(s), or are to be mailed to an
address different from the registered address of the shareholder(s), or
where there appears to be a pattern of redemptions designed to
circumvent the signature guarantee requirement, or where the Fund has
other reason to believe that this requirement would be in the best
interests of the Fund and its shareholders.

The right of redemption may be suspended or the date of payment
postponed beyond the normal three-day period when the New York Stock
Exchange is closed or under emergency circumstances as determined by the
Securities and Exchange Commission. Further, the Fund reserves the right
to redeem its shares in kind under certain circumstances. If the shares
are redeemed in kind, the shareholder may incur brokerage costs when
converting into cash. Additional details are set forth in the "Statement
of Additional Information."

Due to the high cost of maintaining smaller accounts, the Board of
Directors has authorized the Fund to close shareholder accounts where
their value falls below the current minimum initial investment
requirement at the time of initial purchase as a result of redemptions
and not as the result of market action, and remains below this level for
60 days after each such shareholder account is mailed a notice of: (1)
the Fund's intention to close the account, (2) the minimum account size
requirement, and (3) the date on which the account will be closed if the
minimum size requirement is not met. Since the minimum investment amount
and the minimum account size are the same, any redemption from an
account containing only the minimum investment amount may result in
redemption of that account.

Withdrawal By Mail - Shares may be redeemed by mailing your request to
the Fund. To be in "good order" the request must include the following:

(1) A written redemption request or stock assignment (stock power)
containing the genuine signature of each registered owner exactly as the
shares are registered with clear identification of the account by
registered name(s) and account number and the number of shares or the
dollar amount to be redeemed;

(2) any outstanding stock certificates representing shares to be
redeemed;

(3) signature guarantees as required (see Signature Guarantees); and

(4) any additional documentation which the Fund may deem necessary to
insure a genuine redemption.

Withdrawal By Telephone or Telegraph - You may withdraw any amount
($1,000 minimum if wired) or more by telephone toll free 1-800-4-BABSON
(1-800-422-2766), or in the Kansas City area 471-5200, or by telegram to
the Fund's address. Telephone/telegraph redemption authorization signed by
all registered owners with signatures guaranteed must be on file with the
Fund before you may redeem by telephone or telegraph. Funds will be sent
only to the address of record. The signature guarantee requirement may
be waived by the Fund if the request for this redemption method is made
at the same time the initial application to purchase shares is
submitted.

All communications must include the Fund's name, Portfolio name, your
account number, the exact registration of your shares, the number of
shares or dollar amount to be redeemed, and the identity of the bank and
bank account (name and number) to which the proceeds are to be wired.
This procedure may only be used for non-certificated shares held in open
account. For the protection of shareholders, your redemption
instructions can only be changed by filing with the Fund new
instructions on a form obtainable from the Fund which must be properly
signed with signature(s) guaranteed.

Telephone or telegraph redemption proceeds may be transmitted to your
pre-identified bank account. Requests received prior to 1:00 P.M.
(Eastern Time), normally will be wired the following business day. Once
the funds are transmitted, the time of receipt and the funds'
availability are not under our control. If your request is received
during the day thereafter, proceeds normally will be wired on the second
business day following the day of receipt of your request. Wired funds
are subject to a $10 fee to cover bank wire charges, which is deducted
from redemption proceeds, but this charge may be reduced or waived in
connection with certain accounts. The Fund reserves the right to change
this policy or to refuse a telephone or telegraph redemption request or
require additional documentation to assure a genuine redemption, and, at
its option, may pay such redemption by wire or check and may limit the
frequency or the amount of such request. The Fund reserves the right to
terminate or modify any or all of the services in connection with this
privilege at any time without prior notice. Neither the Fund nor Jones &
Babson, Inc. assumes responsibility for the authenticity of withdrawal
instructions, and there are provisions on the authorization form
limiting their liability in this respect.

Withdrawal by Draft ("Check") - This method of redemption is limited to
open account shares. You may elect this method of redemption on your
initial application, or on a form which will be sent to you upon
request. All signatures must be guaranteed unless this method of
redemption is elected on your initial application. The authorization
form, which all registered owners must sign, also contains a provision
relieving the Fund and Jones & Babson, Inc. from liability for loss, if
any, which you may sustain arising out of a non-genuine redemption
pursuant to this redemption feature. Any additional documentation
required to assure a genuine redemption must be maintained on file with
the Fund in such current status as the Fund may deem necessary. A new
form properly signed, with signature(s) guaranteed must be received and
accepted by the Fund before authorized redemption instructions already
on file with the Fund can be changed.

When the draft authorization form is received by the Fund in "good
order" and accepted, you will be provided a supply of drafts ("checks")
which may be drawn on the Fund. Drafts must be deposited in a bank
account of the payee to be cleared through the banking system in order
to be presented to the Fund for payment through UMB Bank, n.a. An
additional supply of drafts will be furnished upon request. There
presently is no charge for these drafts or their clearance. However, the
Fund and UMB Bank, n.a. reserve the right to make reasonable charges and
to terminate or modify any or all of the services in connection with
this privilege at any time and without prior notice.

These drafts must be signed by all registered owners exactly as the
shares are registered, except that if shares are owned in joint tenancy,
drafts may be signed by any one joint owner unless otherwise indicated
on the application. They may be made payable to the order of any person
in any amount ranging from $500 to $100,000. The bank of the draft payee
must present it for collection through UMB Bank, n.a. which delivers it
to the Fund for redemption of a sufficient number of shares to cover the
amount of the draft. Dividends will be earned by the shareholder on the
draft proceeds until it clears at UMB Bank, n.a. Drafts will not be
honored by the Fund and will be returned unpaid if there are
insufficient open account shares to meet the withdrawal amount. The Fund
reserves the right to withhold the bank's redemption request until it
determines that it has received unconditional payment in federal funds
for at least the number of shares required to be redeemed to make
payment on the draft. If such a delay is necessary, the bank may return
the draft not accepted (by the Fund) because there are not sufficient
shares for which good payment has been received in the shareholder
account. Dividends declared but not yet paid to you cannot be withdrawn
by drafts. Drafts (checks) written on the Babson Money Market Fund
should not be used as a redemption form or for the transfer of shares to
another Babson Fund unless the registration of the accounts involved is
identical.

SYSTEMATIC REDEMPTION PLAN

If you own shares in an open account valued at $10,000 or more, and
desire to make regular monthly or quarterly withdrawals without the
necessity and inconvenience of executing a separate redemption request
to initiate each withdrawal, you may enter into a Systematic Withdrawal
Plan by completing forms obtainable from the Fund. For this service, the
manager may charge you a fee not to exceed $1.50 for each withdrawal.
Currently the manager assumes the additional expenses arising out of
this type of plan, but it reserves the right to initiate such a charge
at any time in the future when it deems it necessary. If such a charge
is imposed, participants will be provided 30 days notice.

Subject to a $50 minimum, you may withdraw each period a specified
dollar amount. Shares also may be redeemed at a rate calculated to
exhaust the account at the end of a specified period of time.

Dividends and capital gains distributions must be reinvested in
additional shares. Under all withdrawal programs, liquidation of shares
in excess of dividends and distributions reinvested will diminish and
may exhaust your account, particularly during a period of declining
share values.

You may revoke or change your plan or redeem all of your remaining
shares at any time. Withdrawal payments will be continued until the
shares are exhausted or until the Fund or you terminate the plan by
written notice to the other.

HOW TO EXCHANGE SHARES BETWEEN
PORTFOLIOS AND FUNDS

Shareholders may exchange without a waiting period their Fund shares
which are held in open account, and for which good payment has been
received, for identically registered shares of any other Babson Fund, or
any other Portfolio in the Babson or Buffalo Fund Group which is legally
registered for sale in the state of residence of the investor, except
Babson Enterprise Fund, Inc., provided that the minimum amount exchanged
has a value of $1,000 or meets the minimum investment requirement of the
Fund or Portfolio into which it is exchanged.

Effective at the close of business on January 31, 1992, the Directors of
the Babson Enterprise Fund, Inc. took action to limit the offering of
that Fund's shares. Babson Enterprise Fund, Inc. will not accept any new
accounts, including IRAs and other retirement plans, until further
notice, nor will Babson Enterprise Fund accept transfers from
shareholders of other Babson Funds, who were not shareholders of record
of Babson Enterprise Fund at the close of business on January 31, 1992.
Investors may want to consider purchasing shares in Babson Enterprise
Fund II, Inc. as an alternative.

To authorize the Telephone/Telegraph Exchange Privilege, all registered
owners must sign the appropriate section on the original application, or
the Fund must receive a special authorization form, provided upon
request. During periods of increased market activity, you may have
difficulty reaching the Fund by telephone, in which case you should
contact the Fund by mail or telegraph. The Fund reserves the right to
initiate a charge for this service and to terminate or modify any or all
of the privileges in connection with this service at any time and
without prior notice under any circumstances where continuance of these
privileges would be detrimental to the Fund or its shareholders such as
an emergency, or where the volume of such activity threatens the ability
of the Fund to conduct business, or under any other circumstances, upon
60 days written notice to shareholders. The Fund will not be responsible
for the consequences of delays including delays in the banking or
Federal Reserve wire systems.

Exchanges by mail may be accomplished by a written request properly
signed by all registered owners identifying the account, the number of
shares or dollar amount to be redeemed for exchange, and the Babson Fund
into which the account is being transferred.

If you wish to exchange part or all of your shares in the Fund for
shares of another Fund or Portfolio in the Babson or Buffalo Fund
Group, you should review the prospectus of the Fund to be purchased
which can be obtained from Jones & Babson, Inc. Any such exchange will
be based on the respective net asset values of the shares involved. An
exchange between Funds or Portfolios involves the sale of an asset.
Unless the shareholder account is tax-deferred, this is a taxable event.

HOW SHARE PRICE IS DETERMINED

In order to determine the price at which new shares will be sold and at
which issued shares presented for redemption will be liquidated, the net
asset value per share of each Portfolio is computed once daily, Monday
through Friday, at the specific time during the day that the Board of
Directors sets at least annually, except on days on which changes in the
value of portfolio securities will not materially affect the net asset
value, or days during which no security is tendered for redemption and
no order to purchase or sell such security is received by the Fund, or
customary holidays. For a list of the holidays during which the Fund is
not open for business, see "How Share Price is Determined" in the
"Statement of Additional Information."

The price at which new shares of the Fund will be sold and at which
issued shares presented for redemption will be liquidated is computed
once daily at 1:00 P.M. (Eastern Time), except on those days when the
Fund is not open for business.

The per share calculation is made by subtracting from each Portfolio's
total assets any liabilities and then dividing into this amount the
total outstanding shares as of the date of the calculation.

Normally each Portfolio's price will be $1.00 because the Fund will
adhere to a number of procedures designed, but not guaranteed, to
maintain a constant price of $1.00 per share. Although unlikely, it
still is possible that the value of the shares you redeem may be more or
less than your cost depending on the market value of the Portfolio's
securities at the time a redemption becomes effective.

For the purpose of calculating each Portfolio's net asset value per
share, securities are valued by the "amortized cost" method of
valuation, which does not take into consideration unrealized gains or
losses. This involves valuing an instrument at its cost and thereafter
assuming 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. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Portfolio would
receive if it sold the instrument. During periods of declining interest
rates, the daily yield on shares of the Portfolio computed as described
above may tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for its portfolio instruments.
Thus, if the use of amortized cost by the Portfolio resulted in a lower
aggregate value on a particular day, a prospective investor in the
Portfolio would be able to obtain a somewhat higher yield than would
result from investment in a fund utilizing market values, and existing
investors in the Portfolio would receive less investment income. The
converse would apply in a period of rising interest rates.

The use of amortized cost and the maintenance of each Portfolio's per
share net asset value at $1.00 is based on its election to operate under
the provisions of Rule 2a-7 under the Investment Company Act of 1940. To
assure compliance with adopted procedures pursuant to Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act"), the Fund will only
invest in U.S. dollar denominated securities with remaining maturities
of 397 days or less, maintain the dollar weighted average maturity of
the securities in the Fund's portfolio at 90 days or less and limit its
investments to those instruments which the Directors of the Fund
determines present minimal credit risks and which are eligible
investments under the rule.

The Directors have established procedures designed to maintain the
Portfolios' price per share, as computed for the purpose of sales and
redemptions, at $1.00. These procedures include a review of the
Portfolios' holdings by the Directors at such intervals as they deem
appropriate to determine whether the Portfolios' net asset value
calculated by using available market quotations deviates from $1.00 per
share based on amortized cost. If any deviation exceeds one-half of one
percent, the Directors will promptly consider what action, if any, will
be initiated. In the event the Directors determine that a deviation
exists which may result in material dilution or other unfair results to
investors or existing shareholders, they have agreed to take such
corrective action as they regard as necessary and appropriate, including
the sale of Portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average Portfolio maturity; withhold
dividends; make a special capital distribution; redeem shares in kind;
or establish net asset value per share using available market
quotations.

There are various methods of valuing the assets and of paying dividends
and distributions from a money market fund. Each Portfolio values its
assets at amortized cost while also monitoring the available market bid
prices, or yield equivalents. Since dividends from net investment income
will be accrued daily and paid monthly, the net asset value per share of
each Portfolio's daily dividends will vary in amount.

OFFICERS AND DIRECTORS

The officers of the Fund manage its day-to-day operations. The Fund's
manager and its officers are subject to the supervision and control of
the Board of Directors. A list of the officers and directors of the Fund
and a brief statement of their present positions and principal
occupations during the past five years is set forth in the "Statement of
Additional Information."

MANAGEMENT AND INVESTMENT COUNSEL

Jones & Babson, Inc. was founded in 1960. It organized the Fund in 1979,
and acts as its manager and principal underwriter. Pursuant to the
current Management Agreement, Jones & Babson, Inc. provides or pays the
cost of all management, supervisory and administrative services required
in the normal operation of the Fund. This includes investment management
and supervision; fees of the custodian, independent public accountants
and legal counsel; remuneration of officers, directors and other
personnel; rent; shareholder services, including maintenance of the
shareholder accounting system and transfer agency; and such other items
as are incidental to corporate administration.

Not considered normal operating expenses, and therefore payable by the
Fund, are taxes, interest, governmental charges and fees, including
registration of the Fund and its shares with the Securities and Exchange
Commission and the Securities Departments of the various States,
brokerage costs, dues, and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative
proceedings to which the Fund, its officers or directors may be subject
or a party thereto.

As a part of the Management Agreement, Jones & Babson, Inc. employs at
its own expense David L. Babson & Co. Inc. as its investment counsel to
assist in the investment advisory function. David L. Babson & Co. Inc.
is an investment counseling firm founded in 1940. It serves a broad
variety of individual, corporate and other institutional clients by
maintaining an extensive research and analytical staff. It has an
experienced investment analysis and research staff which eliminates the
need for Jones & Babson, Inc. and the Fund to maintain an extensive
duplicate staff, with the consequent increase in the cost of investment
advisory service. The cost of the services of David L. Babson & Co. Inc.
is included in the fee of Jones & Babson, Inc. The Management Agreement
limits the liability of the manager and its investment counsel, as well
as their officers, directors and personnel, to acts or omissions
involving willful malfeasance, bad faith, gross negligence, or reckless
disregard of their duties. Brian F. Reynolds has been the portfolio
manager of both the Federal and Prime Portfolios of D.L. Babson Money
Market Fund since 1986. He is a Chartered Financial Analyst. He joined
David L. Babson & Co. in 1984, and has 13 years investment management
experience.

As compensation for the services provided by Jones & Babson, Inc., the
Fund pays Jones & Babson, Inc. a fee at the annual rate of 85/100 of one
percent (.85%) of its average daily net assets, which is computed daily
and paid semimonthly, from which Jones & Babson, Inc. pays David L.
Babson & Co. Inc. a fee of 20/100 of one percent (.20%).

The annual fee charged by Jones & Babson, Inc. is higher than the fees
of most other investment advisers whose charges cover only investment
advisory services with all remaining operational expenses absorbed
directly by the Fund. Yet, it compares favorably with these other
advisers when all expenses to Fund shareholders are taken into account.
The total expenses of the Fund for the fiscal year ended June 30, 1996,
amounted to .92% and .91%, respectively, of the average net assets of
the Prime and Federal Portfolios. Per share expenses of both series may
differ due to differences in registration fees.

Certain officers and directors of the Fund are also officers or
directors or both of other Babson Funds, Jones & Babson, Inc. or David
L. Babson & Co. Inc.

Jones & Babson, Inc. is a wholly-owned subsidiary of Business Men's
Assurance Company of America, which is considered to be a controlling
person under the Investment Company Act of 1940. Assicurazioni Generali
S.p.A., an insurance organization founded in 1831 based in Trieste,
Italy, is considered to be a controlling person and is the ultimate
parent of Business Men's Assurance Company of America. Mediobanca is a
5% owner of Generali.

David L. Babson & Co. Inc. is a wholly-owned subsidiary of Massachusetts
Mutual Life Insurance Company headquartered in Springfield,
Massachusetts. Massachusetts Mutual Life Insurance Company is an
insurance organization founded in 1851 and is considered to be a
controlling person of David L. Babson & Co. Inc., under the Investment
Company Act of 1940.

The current Management Agreement between the Fund and Jones & Babson,
Inc., which includes the Investment Counsel Agreement between Jones &
Babson, Inc. and David L. Babson & Co. Inc., will continue in effect
until October 31, 1997, and will continue automatically for successive
annual periods ending each October 31 so long as such continuance is
specifically approved at least annually by the Board of Directors of the
Fund or by the vote of a majority of the outstanding voting securities
of the Fund, and, provided also that such continuance is approved by the
vote of a majority of the directors who are not parties to the
Agreements or interested persons of any such party at a meeting held in
person and called specifically for the purpose of evaluating and voting
on such approval. Both Agreements provide that either party may
terminate by giving the other 60 days written notice. The Agreements
terminate automatically if assigned by either party.

GENERAL INFORMATION AND HISTORY

The Fund, incorporated in Maryland on October 19, 1979, has a present
authorized capitalization of 2,000,000,000 shares of $.01 par value
common stock. Half of the shares are presently reserved for issuance to
shareholders invested in the Federal Portfolio and half are reserved for
the Prime Portfolio shareholders. Each full and fractional share, when
issued and outstanding, has: (1) equal voting rights with respect to
matters which affect the Fund in general and with respect to matters
relating solely to the interests of the Portfolio for which issued, and
(2) equal dividend, distribution and redemption rights to the assets of
the Portfolio for which issued and to general assets, if any, of the
Fund which are not specifically allocated to a particular Portfolio.
Shares when issued are fully paid and non-assessable. Except for the
priority of each share in the assets of its Portfolio, the Fund will not
issue any class of securities senior to any other class. Shareholders do
not have pre-emptive or conversion rights. The Fund may issue additional
series of stock with the approval of the Fund's Board of Directors.

Non-cumulative voting - These shares have non-cumulative voting rights,
which means that the holders of more than 50% of the shares voting for
the election of directors can elect 100% of the directors, if they
choose to do so, and in such event, the holders of the remaining less
than 50% of the shares voting will not be able to elect any directors.
Each series will vote separately on investment advisory agreements,
changes in fundamental policies, and other matters affecting each series
separately.

The Maryland Statutes permit registered investment companies, such as
the Fund, to operate without an annual meeting of shareholders under
specified circumstances if an annual meeting is not required by the
Investment Company Act of 1940. There are procedures whereby the
shareholders may remove directors. These procedures are described in the
"Statement of Additional Information" under the caption "Officers and
Directors." The Fund has adopted the appropriate provisions in its By-
Laws and may not, at its discretion, hold annual meetings of
shareholders for the following purposes unless required to do so: (1)
election of directors; (2) approval of any investment advisory
agreement; (3) ratification of the selection of independent public
accountants; and (4) approval of a distribution plan. As a result, the
Fund does not intend to hold annual meetings.

The Fund may use the name "Babson" in its name so long as Jones &
Babson, Inc. is continued as manager and David L. Babson & Co. Inc. as
its investment counsel. Complete details with respect to the use of the
name are set out in the Management Agreement between the Fund and Jones
& Babson, Inc.

This prospectus omits certain of the information contained in the
registration statement filed with the Securities and Exchange
Commission, Washington, D.C. These items may be inspected at the offices
of the Commission or obtained from the Commission upon payment of the
fee prescribed.

DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION

At the close of each business day, dividends consisting of substantially
all of each Portfolio's net investment income are declared payable to
shareholders of record at the close of the previous business day, and
credited to their accounts. All daily dividends declared during a given
month will be distributed on the last day of the month. Dividend and
capital gains distributions, if any, are automatically reinvested in
additional shares at net asset value, unless the shareholder has elected
in writing to receive cash. The method of payment elected remains in
effect until the Fund is notified in writing to the contrary. If at the
time of a complete redemption and closing of a shareholder account,
there is net undistributed income to the credit of the shareholder, it
will be paid by separate check on the next dividend distribution date.
In the case of a partial redemption, any net undistributed credit will
be distributed on the next dividend date according to the shareholder's
instructions on file with the Fund.

Shares begin earning income on the day following the effective date of
purchase. Income earned by the Fund on weekends, holidays and other days
on which the Fund is closed for business is declared as a dividend on
the next day on which the Fund is open for business, except for month-
ends when such dividend is declared as of the last day of the month.

Each Portfolio within the Fund has qualified, and intends to continue to
qualify for taxation as a "regulated investment company" under the
Internal Revenue Code so that each Portfolio will not be subject to
federal income tax to the extent it distributes its income to
shareholders. Dividends, either in cash or reinvested in shares, paid by
a Portfolio from net investment income will be taxable to shareholders
as ordinary income and will not qualify for the 70% dividends-received
deduction for corporations.

Each Portfolio intends to declare and pay dividends so as to avoid
imposition of the federal excise tax. To do so, the Fund expects to
distribute during the calendar year an amount equal to: (1) 98% of its
calendar year ordinary income; and (2) 100% of any undistributed income
from the prior calendar year. Dividends declared in December by a
Portfolio will be deemed to have been paid by such Portfolio and
received by its shareholders on the record date so long as the dividends
are actually paid before February 1 of the following year.

Promptly after the end of each calendar year, each shareholder will
receive a statement of the federal income tax status of all dividends
and distributions paid during the year.

To comply with IRS regulations, the Fund is required by federal law to
withhold 31% of reportable payments (which may include dividends,
capital gains distributions, and redemptions) paid to shareholders who
have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Application,
or on a separate form supplied by the Fund, that their Social Security
or Taxpayer Identification Number provided is correct and that they are
not currently subject to backup withholding, or that they are exempt
from backup withholding.

Shareholders also may be subject to state and local taxes on
distributions from the Fund. You should consult your tax adviser with
respect to the tax status of distributions from the Fund in your state
and locality.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED HEREIN FOR GENERAL
INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX
ADVISERS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF AN INVESTMENT
IN THE FUND.

SHAREHOLDER SERVICES

The Fund and its manager offer shareholders a broad variety of services
described throughout this prospectus. In addition, the following
services are available:

Automatic Monthly Investment - You may elect to make monthly
investments in a constant dollar amount from your checking account ($50
minimum). The Fund will draft your checking account on the same day each
month in the amount you authorize in your application, or, subsequently,
on a special authorization form provided upon request.

Automatic Reinvestment - Dividends and capital gains distributions may
be reinvested automatically, or shareholders may elect to have dividends
paid in cash and capital gains reinvested, or to have both paid in cash.

Telephone Investments - You may make investments of $100 or more by
telephone if you have authorized such investments in your application,
or, subsequently, on a special authorization form provided upon request.
See "Telephone Investment Service."

Automatic Exchange - You may exchange shares from your account ($100
minimum) in any of the Babson Funds to an identically registered account
in any other fund in the Babson or Buffalo Group except Babson
Enterprise Fund, Inc. according to your instructions. Monthly exchanges
will be continued until all shares have been exchanged or until you
terminate the Automatic Exchange authorization. A special authorization
form will be provided upon request.

Transfer of Ownership - A shareholder may transfer shares to another
shareholder account. The requirements which apply to redemptions apply
to transfers. A transfer to a new account must meet initial investment
requirements.

Systematic Redemption Plan - Shareholders who own shares in open
account valued at $10,000 or more may arrange to make regular
withdrawals without the necessity of executing a separate redemption
request to initiate each withdrawal.

Sub-Accounting - Keogh and corporate tax qualified retirement plans, as
well as certain other investors who must maintain separate participant
accounting records, may meet these needs through services provided by
the Fund's manager, Jones & Babson, Inc. Investment minimums may be met
by accumulating the separate accounts of the group. Although there is
currently no charge for sub-accounting, the Fund and its manager reserve
the right to make reasonable charges for this service.

Prototype Retirement Plans - Jones & Babson, Inc. offers a defined
contribution prototype plan - The Universal Retirement Plan - which is
suitable for all who are self-employed, including sole proprietors,
partnerships, and corporations. The Universal Prototype includes both
money purchase pension and profit-sharing plan options.

Individual Retirement Accounts - Also available is an Individual
Retirement Account (IRA). The IRA uses the IRS model form of plan and
provides an excellent way to accumulate a retirement fund which will
earn tax-deferred dollars until withdrawn. An IRA may also be used to
defer taxes on certain distributions from employer-sponsored retirement
plans. You may contribute up to $2,000 of compensation each year ($2,250
if a spousal IRA is established), some or all of which may be
deductible. Consult your tax adviser concerning the amount of the tax
deduction, if any.

Simplified Employee Pensions (SEPs) - The Jones & Babson IRA may be
used with IRS Form 5305-SEP to establish a SEP-IRA, to which the self-
employed individual may contribute up to 15% of net earned income or
$30,000, whichever is less. A SEP-IRA offers the employer the ability to
make the same level of deductible contributions as a Profit-Sharing Plan
with greater ease of administration, but less flexibility in plan
coverage of employees.

SHAREHOLDER INQUIRIES

Telephone inquiries may be made toll free to the Fund,
1-800-4-BABSON (1-800-422-2766), or in the Kansas
City area 471-5200.

Shareholders may address written inquiries to the Fund at:

D.L. Babson Money Market Fund, Inc.
2440 Pershing Road, Suite G-15
Kansas City, MO 64108

AUDITORS
ARTHUR ANDERSEN LLP
Kansas City, Missouri

LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG
Philadelphia, Pennsylvania
JOHN G. DYER
Kansas City, Missouri

CUSTODIAN
UMB BANK, n.a.
Kansas City, Missouri

TRANSFER AGENT
JONES & BABSON, INC.
Kansas City, Missouri

EQUITIES

Growth Fund
Enterprise Fund*
Enterprise Fund II
Value Fund
Shadow Stock Fund
International Fund

FIXED INCOME

Bond Trust
Money Market Fund
Tax-Free Income Fund

* Closed to new investors.

JONES & BABSON
MUTUAL FUNDS

2440 Pershing Road
Kansas City, MO 64108-2561
816-471-5200

1-800-4-BABSON
(1-800-422-2766)

http://www.jbfunds.com

PART B

D. L. BABSON MONEY MARKET
FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1996

This Statement is not a Prospectus but should be read in conjunction
with the Fund's current Prospectus dated October 31, 1996. To obtain the
Prospectus please call the Fund toll-free 1-800-4-BABSON (1-800-422-2766),
or in the Kansas City area 471-5200.

TABLE OF CONTENTS

Page
Investment Objective and Policies 2
Portfolio Transactions 2
Investment Restrictions 3
Performance Measures 4
How the Fund's Shares are Distributed 4
How Share Purchases are Handled 5
Redemption of Shares 5
Signature Guarantees 5
Management and Investment Counsel 6
How Share Price is Determined 6
Officers and Directors 7
Custodian 9
Independent Public Accountants 9
Other Jones & Babson Funds 9
Money Market Securities Described and Ratings 11
Financial Statements 13

<PAGE>

INVESTMENT OBJECTIVE
AND POLICIES

The following policies supplement the Fund's
investment objective and policies set forth in the
Prospectus.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the
Fund are made by Jones & Babson, Inc.
pursuant to recommendations by David L.
Babson & Co. Inc. Officers of the Fund and
Jones & Babson, Inc. are generally responsible
for implementing or supervising these decisions,
including allocation of portfolio brokerage and
principal business as well as the negotiation of
commissions and/or the price of the securities.
In instances where securities are purchased on a
commission basis, the Fund will seek
competitive and reasonable commission rates
based on the circumstances of the trade involved
and to the extent that they do not detract from
the quality of the execution.

In all transactions, it is the Fund's policy to
obtain the best combination of price and
execution commensurate with the circumstances
as viewed at the time.

The Fund expects that purchases and sales of
portfolio securities usually will be principal
transactions. Portfolio securities normally will
be purchased directly from the issuer or in the
over-the-counter market from a principal market
maker for the securities, unless it appears that a
better combination of price and execution may
be obtained elsewhere. Usually there will be no
brokerage commission paid by the Fund for such
purchases. Purchases from underwriters of
portfolio securities will include a commission or
concession paid by the issuer to the underwriter,
and purchases from dealers serving as market
makers will include the spread between the bid
and asked price.

The Fund believes it is in its best interest and
that of its shareholders to have a stable and
continuous relationship with a diverse group of
financially strong and technically qualified
broker-dealers who will provide quality
executions at competitive rates. Broker-dealers
meeting these qualifications also will be selected
for their demonstrated loyalty to the Fund, when
acting on its behalf, as well as for any research
or other services provided to the Fund. The
Fund normally will not pay a higher commission
rate to broker-dealers providing benefits or
services to it than it would pay to broker-dealers
who do not provide it such benefits or services.
However, the Fund reserves the right to do so
within the principles set out in Section 28(e) of
the Securities Act of 1934 when it appears that
this would be in the best interests of the
shareholders.

No commitment is made to any broker or
dealer with regard to placing of orders for the
purchase or sale of Fund securities, and no
specific formula is used in placing such
business. Allocation is reviewed regularly by
both the Board of Directors of the Fund and
Jones & Babson, Inc.

Since the Fund does not market its shares
through intermediary brokers or dealers, it is not
the Fund's practice to allocate brokerage or
principal business on the basis of sales of its
shares which may be made through such firms.
However, it may place portfolio orders with
qualified broker-dealers who recommend the
Fund to other clients, or who act as agent in the
purchase of the Fund's shares for their clients.

Research services furnished by broker-dealers
may be useful to the Fund manager and its
investment counsel in serving other clients, as
well as the Fund. Conversely, the Fund may
benefit from research services obtained by the
manager or its investment counsel from the
placement of portfolio brokerage of other clients.

When it appears to be in the best interest of its
shareholders, the Fund may join with other
clients of the manager and its investment
counsel in acquiring or disposing of a portfolio
holding. Securities acquired or proceeds
obtained will be equitably distributed between
the Fund and other clients participating in the
transaction. In some instances, this investment
procedure may affect the price paid or received
by the Fund or the size of the position obtained
by the Fund.

The Fund does not intend to purchase
securities solely for short-term trading; nor will
securities be sold for the sole purpose of
realizing gains. A security may be sold and

2
<PAGE>

another of comparable quality purchased at
approximately the same time; however, to take
advantage of what the Fund's manager believes
to be a disparity in the normal yield relationship
between the so securities. In addition, a security
may be sold and another purchased when, in the
opinion of the Fund's management, a favorable
yield spread exists between specific issues or
different market sectors.

Since short-term debt instruments with
maturities of less than one year are excluded
from the calculation of portfolio turnover, the
Fund does not anticipate having a portfolio
turnover ratio.

INVESTMENT RESTRICTIONS

In addition to the investment objective and
portfolio management policies set forth in the
Prospects under the caption investment
Objective and Portfolio Management Policy,"
the following restrictions also may not be
changed without approval of the "holders of a
majority of the outstanding shares" of the Fund
or the affected Portfolio series.

The Fund will not: (1) invest in equity
securities or securities convertible into equities;
(2) purchase the securities of any issuer (other
than obligations issued or guaranteed as to
principal and interest by the government of the
United States, its agencies or instrumentalities)
if, as a result, (a) more than 5% of the Fund's
total assets (taken at current value) would be
invested in the securities of such issuer, or (b)
the Fund would hold more than 10% of any
class of securities of such issuer (for this
purpose, all debts and obligations of an issuer
maturing in less than one year are treated as a
single class of securities); (3) borrow money in
excess of 15% of its total assets taken at market
value, and then only from banks as a temporary
measure for extraordinary or emergency
purposes; the Fund will not borrow to increase
income (leveraging) but only to facilitate
redemption requests which might otherwise
require untimely dispositions of Portfolio
securities; the Fund will repay all borrowings
before making additional investments, and
interest paid on such borrowings will reduce net
income; (4) mortgage, pledge or hypothecate its
assets except in an amount up to 15% (10% as
long as the Fund's shares are registered for sale
in certain states) of the value of its total assets
but only to secure borrowings for temporary or
emergency purposes; (5) issue senior securities,
as defined in the Investment Company Act of
1940, as amended; (6) underwrite securities
issued by other persons; (7) purchase or sell real
estate, but this shall not prevent investment in
obligations secured by real estate; (8) make
loans to other persons, except by the purchase of
debt obligations which are permitted under its
investment policy; (9) purchase securities on
margin or sell short; (10) purchase or retain
securities of an issuer if to the knowledge of the
Fund's management those directors of the Fund,
each of whom owns more than one-half of one
percent (.5%) of such securities, together own
more than five percent (5%) of the securities of
such issuer; (11) purchase or sell commodities
or commodity contracts; (12) write or invest in
put, call, straddle or spread options or invest in
interests in oil, gas or other mineral exploration
or development programs; (13) invest in
companies for the purpose of exercising control;
(14) invest in securities of other investment
companies, except as they may be acquired as
part of a merger, consolidation or acquisition of
assets; (15) invest more than 5% of the value of
its total assets at the time of investment in the
securities of any issuer or issuers which have
records of less than three years continuous
operation, including the operation of any
predecessor, but this limitation does not apply to
securities issued or guaranteed as to interest and
principal by the United States government or its
agencies or instrumentalities; or (16) purchase
any securities which would cause more than
25% of the value of a Portfolio's total net assets
at the time of such purchase to be invested in
any one industry; provided, however, the Prime
Portfolio reserves freedom of action to invest up
to 100% of its assets in certificates of deposit or
bankers' acceptances of domestic branches of
U.S. banks.

There is no limitation with respect to
investments in U.S. Treasury Bills, or other
obligations issued or guaranteed by the federal
government, its agencies and instrumentalities.

In addition to the fundamental investment
restrictions set out above, in order to comply
with the law or regulations of various States, the
Fund will not engage in the following practices:
(1) invest in securities which are not readily

3
<PAGE>

marketable or in securities of foreign issuers
which are not listed on a recognized domestic or
foreign securities exchange; (2) write put or call
options; (3) invest in oil, gas and other mineral
leases or arbitrage transactions; or (4) purchase
or sell real estate (including limited partnership
interests, but excluding readily marketable
interests in real estate investment trusts or
readily marketable securities of companies
which invest in real estate).

Certain States also require that the Fund's
investments in warrants, valued at the lower of
cost or market, may not exceed 5% of the value
of the Fund's net assets. Included within that
amount, but not to exceed 2% of the value of the
Fund's net assets may be warrants which are not
listed on the New York or American Stock
Exchange. Warrants acquired by the Fund in
units or attached to securities may be deemed to
be without value for purposes of this limitation.

PERFORMANCE MEASURES

Yield

From time to time, each Portfolio of the Fund
may quote its yield in advertisements,
shareholder reports or other communications to
shareholders. Yield information is generally
available by calling the Fund toll free 1-800-4-
BABSON (1-800-422-2766), or in the Kansas
City area 471-5200.

The current annualized yield for each
Portfolio of the Fund is computed by: (a)
determining the net change in the value of a
hypothetical pre-existing account in a Fund
having a balance of one share at the beginning
of a seven calendar day period for which yield is
to be quoted, (b) dividing the net change by the
value of the account at the beginning of the
period to obtain the base period return, and (c)
annualizing the results (i.e., multiplying the
base period return by 365/7). The net change in
value of the account reflects the value of
additional shares purchased with dividends
declared on the original share and any such
additional shares, but does not include realized
gains and losses or unrealized appreciation and
depreciation. In addition, each Fund may
calculate a compound effective yield by adding 1
to the base period return (calculated as described
above, raising the sum to a power equal to 365/7
and subtracting 1).

For the seven-day period ended June 30, 1996
the current annualized yield of the Federal
Portfolio was 4.38% and the compound effective
yield was 4.47%. At June 30, 1996, that
Portfolio's average maturity was 39 days. For the
seven-day period ended June 30, 1996, the
current annualized yield of the Prime Portfolio
was 4.33% and the compound effective yield
was 4.42%. At June 30, 1996, that Portfolio's
average maturity was 41 days.

Yield information is useful in reviewing the
Funds' performance, but because yields
fluctuate, such information cannot necessarily be
used to compare an investment in a Fund's
shares with bank deposits, savings accounts and
similar investment alternatives which often
provided an agreed or guaranteed fixed yield for
a stated period of time. Shareholders should
remember that yield is a function of the kind
and quality of the instruments in the Funds'
portfolios, portfolio maturity, operating expenses
and market conditions. Shares of the Fund are
not insured.

HOW THE FUND'S SHARES
ARE DISTRIBUTED

Jones & Babson, Inc., as agent of the Fund,
agrees to supply its best efforts as sole
distributor of the Fund's shares and, at its own
expense, pay all sales and distribution expenses
in connection with their offering other than
registration fees and other government charges.

Jones & Babson, Inc. does not receive any fee
or other compensation under the distribution
agreement which continues in effect until
October 31, 1997, and which will continue
automatically for successive annual periods
ending each October 31, if continued at least
annually by the Fund's Board of Directors,
including a majority of those Directors who are
not parties to such agreements or interested
persons of any such party. It terminates
automatically if assigned by either party or upon
60 days written notice by either party to the
other.

4
<PAGE>

Jones & Babson, Inc. also acts as sole
distributor of the shares for David L. Babson
Growth Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., D. L.
Babson Tax-Free Income Fund, Inc., Babson
Value Fund, Inc., D. L. Babson Bond Trust,
Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money Market Fund,
Inc., Scout Regional Fund, Inc., Scout
WorldWide Fund, Inc., Scout Balanced Fund,
Inc.,Buffalo Balanced Fund, Inc., Buffalo Equity
Fund, Inc., Buffalo High Yield Fund, Inc. and
Buffalo USA Global Fund, Inc.

HOW SHARE PURCHASES
ARE HANDLED

Each order accepted will be fully invested in
whole and fractional shares, unless the purchase
of a certain number of whole shares is specified,
at the net asset value per share next effective
after the order is accepted by the Fund.

Each investment is confirmed by a year-to-
date statement which provides the details of the
immediate transaction, plus all prior
transactions in your account during the current
year. This includes the dollar amount invested,
number of shares purchased or redeemed, price
per share, and aggregate shares owned. A
transcript of all activity in your account during
the previous year will be furnished each January.
By retaining each annual summary and the last
year-to-date statement, you have a complete
detailed history of your account. A duplicate
copy of a past annual statement is available from
Jones & Babson, Inc. at its cost, subject to a
minimum charge of $5 per account, per year
requested.

Normally, the shares which you purchase are
held by the Fund in open account, thereby
relieving you of the responsibility of providing
for the safekeeping of a negotiable share
certificate. Should you have a special need for a
certificate, one will be issued on request for all
or a portion of the whole shares in your account.
There is no charge for the first certificate issued.
A charge of $3.50 will be made for any
replacement certificates issued. In order to
protect the interests of the other shareholders,
share certificates will be sent to those
shareholders who request them only after the
Fund has determined that unconditional
payment for the shares represented by the
certificate has been received by its custodian,
UMB Bank, n.a.

If an order to purchase shares must be
canceled due to non-payment, the purchaser will
be responsible for any loss incurred by the Fund
arising out of such cancellation. To recover any
such loss, the Fund reserves the right to redeem
shares owned by any purchaser whose order is
canceled, and such purchaser may be prohibited
or restricted in the manner of placing further
orders.

The Fund reserves the right in its sole
discretion to withdraw all or any part of the
offering made by the prospectus or to reject
purchase orders when, in the judgment of
management, such withdrawal or rejection is in
the best interest of the Fund and its
shareholders. The Fund also reserves the right at
any time to waive or increase the minimum
requirements applicable to initial or subsequent
investments with respect to any person or class
of persons, which includes shareholders of the
Fund's special investment programs.

REDEMPTION OF SHARES

The right of redemption may be suspended, or
the date of payment postponed beyond the
normal three-day period by the Fund's Board of
Directors under the following conditions
authorized by the Investment Company Act of
1940: (1) for any period (a) during which the
New York Stock Exchange is closed, other than
customary weekend and holiday closing, or (b)
during which trading on the New York Stock
Exchange is restricted; (2) for any period during
which an emergency exists as a result of which
(a) disposal by the Fund of securities owned by it
is not reasonably practicable, or (b) it is not
reasonably practicable for the Fund to determine
the fair value of its net assets; or (3) for such
other periods as the Securities and Exchange
Commission may by order permit for the
protection of the Fund's shareholders.

SIGNATURE GUARANTEES

Signature guarantees normally reduce the
possibility of forgery and are required in
connection with each redemption method to

5
<PAGE>

protect shareholders from loss. Signature
guarantees are required in connection with all
redemptions of $50,000 or more by mail or
changes in share registration, except as provided
in the Prospectus.

Signature guarantees must appear together
with the signature(s) of the registered owner(s),
on:

( 1 ) a written request for redemption;

(2) a separate instrument of assignment,
which should specify the total number
of shares to be redeemed (this "stock
power" may be obtained from the Fund
or from most banks or stock brokers);
or

(3) all stock certificates tendered for
redemption.

MANAGEMENT AND
INVESTMENT COUNSEL

As a part of the Management Agreement,
Jones & Babson, Inc. employs at its own
expense David L. Babson & Co. Inc., as its
investment counsel. David L. Babson & Co. Inc.
was founded in 1940 as a private investment
research and counseling organization On June
30, 1995, David L. Babson & Co. Inc. became a
wholly-owned subsidiary of Massachusetts
Mutual Life Insurance Company. David L.
Babson & Co. Inc. serves individual, corporate
and other institutional clients and participates
with Jones & Babson in the management of nine
Babson no-load mutual funds.

The aggregate management fee paid to Jones
& Babson, Inc. during the most recent fiscal
year ended June 30, 1996, from which Jones &
Babson, Inc. paid all the Fund's expenses except
those payable directly by the Fund, was
$406,719. The .85% annual fee charged by
Jones & Babson, Inc. covers all normal
operating costs of the Fund. As a result, it is
higher than the fees of some other advisers
whose charges cover only investment advisory
services with all remaining operational expenses
absorbed directly by the Fund. Yet, Jones &
Babson's charges compare favorably with those
other advisors when all expenses to Fund
shareholders (i.e., operating expenses as a
percent of average net assets) are taken into
account.

David L. Babson & Co. Inc. has an
experienced investment analysis and research
staff which eliminates the need for Jones &
Babson, Inc. and the Fund to maintain an
extensive duplicate staff, with the consequent
increase in the cost of investment advisory
service. The cost of the services of David L.
Babson & Co. Inc. is included in the services of
Jones & Babson, Inc. For its investment
supervisory services and counsel, Jones &
Babson, Inc. pays David L. Babson & Co. Inc. a
fee computed on an annual basis at the rate of
20/100 (.20%) of the average daily total net
assets of the Fund. During the most recent fiscal
year ended June 30, 1996, Jones & Babson, Inc.
paid David L. Babson & Co. Inc. fees
amounting to $95,489.

HOW SHARE PRICE IS DETERMINED

The net asset value per share of each Fund
Portfolio is computed once daily, Monday
through Friday, at the specific time during the
day that the Board of Directors of each Fund sets
at least annually, except on days on which
changes in the value of a Fund's portfolio
securities will not materially affect the net asset
value, or days during which no security is
tendered for redemption and no order to
purchase or sell such security is received by the
Fund, or the following holidays:

New Year's Day January 1
Martin Luther King Day Third Monday
in January
Presidents' Holiday Third Monday
in February
Good Friday Friday before
Easter
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Columbus Day Second Monday
in October
Veterans' Day November 11
Thanksgiving Day Fourth Thursday
in November
Christmas Day December 25

6
<PAGE>

OFFICERS AND DIRECTORS

The Fund is managed by Jones & Babson, Inc.
subject to the supervision and control of the
Board of Directors. the following table lists the
Officers and Directors of the Fund. Unless noted
otherwise, the address of each Officer and
Director is 2440 Pershing Road, Suite G-15,
Kansas City, Missouri 64108. Except as
indicated, each has been an employee of Jones &
Babson, Inc. for more than five years.

* Larry D. Armel, President and Director.
President and Director, Jones & Babson,
Inc., David L. Babson Growth Fund, Inc.,
D. L. Babson Tax-Free Income Fund, Inc.,
Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value
Fund, Inc., Shadow Stock Fund, Inc.,
Babson-Stewart Ivory International Fund,
Inc., Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund, Inc.,
Scout Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc., Scout
WorldWide Fund, Inc., Scout Balanced
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global
Fund, Inc.; President and Trustee, D. L.
Babson Bond Trust.

Francis C. Rood, Director.
Retired, 6429 West 92nd Street, Overland
Park, Kansas 66212. Formerly, Group Vice
President-Administration of Hallmark
Cards, Inc.; Director, David L. Babson
Growth Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Buffalo Balanced Fund, Inc.,
Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global
Fund, Inc.; Trustee, D.L. Babson Bond
Trust.

_______________________________________

* Directors who are interested persons as that
term is defined in the Investment Company
Act of 1940, as amended.

William H. Russell, Director.
Financial Consultant, 645 West 67th Street,
Kansas City, Missouri 64113, previously Vice
President, United Telecommunications, Inc.;
Director, David L. Babson Growth Fund, Inc.,
D.L. Babson Tax-Free Income Fund, Inc.,
Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund,
Inc., Shadow Stock Fund, Inc., Babson-Stewart
Ivory International Fund, Inc., Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.; Trustee, D. L. Babson Bond Trust.

H. David Rybolt, Director.
Consultant, HDR Associates, P.O. Box 2468,
Shawnee Mission, Kansas 66202; Director,
David L. Babson Growth Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund
II, Inc., Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.; Trustee,
D.L. Babson Bond Trust.

P. Bradley Adams, Vice President and
Treasurer.
Vice President and Treasurer, Jones & Babson,
Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund
II, Inc., Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International
Fund, Inc., D.L. Babson Bond Trust, Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout
Money Market Fund, Inc., Scout Tax-Free
Money Market Fund, Inc., Scout Regional Fund,
Inc., Scout WorldWide Fund, Inc., Scout
Balanced Fund, Inc., Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund,
Inc.

7
<PAGE>

Elizabeth L. Allwood, Vice President and
Assistant Secretary.
Assistant Vice President and Assistant
Secretary, Jones & Babson, Inc. Vice President
and Assistant Secretary, David L. Babson
Growth Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., Shadow Stock Fund,
Inc., D.L. Babson Bond Trust, Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc., Scout Balanced
Fund, Inc., Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.

Michael A. Brummel, Vice President,
Assistant Secretary and Assistant Treasurer.
Vice President, Jones & Babson, Inc., David L.
Babson Growth Fund, Inc., D.L. Babson Tax-
Free Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International Fund,
Inc., D.L. Babson Bond Trust, Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc., Scout Balanced
Fund, Inc., Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.

Martin A. Cramer, Vice President and
Secretary.
Vice President and Secretary, Jones & Babson,
Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund
II, Inc., Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International
Fund, Inc., D.L. Babson Bond Trust, Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout
Money Market Fund, Inc., Scout Tax-Free
Money Market Fund, Inc., Scout Regional Fund,
Inc., Scout WorldWide Fund, Inc., Scout
Balanced Fund, Inc., Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund,
Inc.

Constance E. Martin, Vice President.
Assistant Vice President, Jones & Babson, Inc.
Vice President, David L. Babson Growth Fund,
Inc., D.L. Babson Tax-Free Income Fund, Inc.,
Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund,
Inc., Babson-Stewart Ivory International Fund,
Inc., Shadow Stock Fund, Inc., D.L. Babson
Bond Trust, Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund, Inc.,
Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund,
Inc., Scout Balanced Fund, Inc., Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA
Global Fund, Inc.

Edward L. Martin, Vice President.
Executive Vice President and Director, David L.
Babson & Co. Inc., One Memorial Drive,
Cambridge, Massachusetts 02142; Vice
President, D. L. Babson Tax-Free Income Fund,
Inc., D. L. Babson Bond Trust.

Remuneration of Officers and Directors.
None of the officers or directors will be
remunerated by the Fund for their normal duties
and services. Their compensation and expenses
arising out of normal operations will be paid by
Jones & Babson, Inc. under the provisions of the
Management Agreement.

8
<PAGE>

<TABLE>
<CAPTION>
COMPENSATION TABLE

Pension or Estimated Total
Aggregate Retirement Annual Compensation
Name of Compensation Benefits Accrued Benefits From All Babson
Director From each As Part of Fund Upon Funds Paid to
Fund Expenses Retirement Directors**
______________ ____________ ________________ __________ _____________
</CAPTION>
<S> <C> <C> <C> <C>
Larry D. Armel* -- -- -- --
Francis C. Rood $7,250 -- -- $7,250
William H. Russell $7,250 -- -- $7,500
H. David Rybolt $7,250 -- -- $7,250
</TABLE>
______________ ____________ ________________ ___________ _____________

* As an "interested director," Mr. Armel received no compensation for
his services as a director.
** The amounts reported in this column reflect the total compensation
paid to each director for his services as a director of nine Babson
Funds during the fiscal year ended June 30, 1996. Directors fees are
paid by the Funds' manager and not by the Funds themselves.

Messrs. Rood, Russell and Rybolt have no
financial interest in, nor are they affiliated with,
either Jones & Babson, Inc. or David L. Babson
& Co. Inc.

The Audit Committee of the Board of
Directors is composed of Messrs. Rood, Russell
and Rybolt.

The Officers and Directors of the Fund as a
group own less than 1 % of the Fund.

The Fund will not hold annual meetings
except as required by the Investment Company
Act of 1940 and other applicable laws. The
Fund is a Maryland corporation. Under
Maryland law, a special meeting of stockholders
of the Fund must be held if the Fund receives
the written request for a meeting from the
stockholders entitled to cast at least 25 percent
of all the votes entitled to be cast at the meeting.
The Fund has undertaken that its Directors will
call a meeting of stockholders if such a meeting
is requested in writing by the holders of not less
than 10% of the outstanding shares of the Fund.
To the extent required by the undertaking, the
Fund will assist shareholder communications in
such matters.

CUSTODIAN

The Fund's assets are held for safekeeping by
an independent custodian, UMB Bank, n.a. This
means the bank, rather than the Fund, has
possession of the Fund's cash and securities. The
custodian bank is not responsible for the Fund's
investment management or administration. But,
as directed by the Fund's officers, it delivers
cash to those who have sold securities to the
Fund in return for such securities, and to those
who have purchased securities from the Fund, it
delivers such securities in return for their cash
purchase price. It also collects income directly
from issuers of securities owned by the Fund and
holds this for payment to shareholders after
deduction of the Fund's expenses. The custodian
is compensated for its services by the manager.
There is no charge to the Fund.

INDEPENDENT PUBLIC
ACCOUNTANTS

The Fund's financial statements are examined
annually by independent public accountants
approved by the directors each year, and in years
in which an annual meeting is held the directors
may submit their selection of independent public
accountants to the shareholders for ratification.
Arthur Andersen LLP, P.O. Box 13406, Kansas
City, Missouri 64199, is the Fund's present
independent public accountant.

Reports to shareholders will be published at
least semiannually.

OTHER JONES & BABSON FUNDS

The Fund is one of nine no-load funds
comprising the Babson Mutual Fund Group
managed by Jones & Babson, Inc. in association
with its investment counsel, David L. Babson &
Co. Inc. The other funds are:

9
<PAGE>

EQUITY FUNDS

DAVID L. BABSON GROWTH FUND,
INC. was organized in 1960, with the
objective of long-term growth of both capital
and dividend income through investment in
the common stocks of well-managed
companies which have a record of long-term
above-average growth of both earnings and
dividends.

BABSON ENTERPRISE FUND, INC. was
organized in 1983, with the objective of long-
term growth of capital by investing in a
diversified portfolio of common stocks of
smaller, faster-growing companies with
market capital of $15 million to $300 million
at the time of purchase. This Fund is intended
to be an investment vehicle for that part of an
investor's capital which can appropriately be
exposed to above-average risk in anticipation
of greater rewards. This Fund is currently
closed to new shareholders.

BABSON ENTERPRISE FUND II, INC.
was organized in 1991, with the objective of
long-term growth of capital by investing in a
diversified portfolio of common stocks of
smaller, faster-growing companies which at
the time of purchase are considered by the
Investment Adviser to be realistically valued
in the smaller company sector of the market.
This Fund is intended to be an investment
vehicle for that part of an investor's capital
which can appropriately be exposed to above-
average risk in anticipation of greater
rewards.

BABSON VALUE FUND, INC. was
organized in 1984, with the objective of long-
term growth of capital and income by
investing in a diversified portfolio of common
stocks which are considered to be undervalued
in relation to earnings, dividends and/or
assets.

SHADOW STOCK FUND, INC. was
organized in 1987, with the objective of long-
term growth of capital that can be exposed to
above-average risk in anticipation of greater
than-average rewards. The Fund expects to
reach its objective by investing in small
company stocks called "Shadow Stocks", i.e.,
stocks that combine the characteristics of
"small stocks" (as ranked by market
capitalization) and "neglected stocks" (least
held by institutions and least covered by
analysts).

BABSON-STEWART IVORY INTERNA-
TIONAL FUND, INC. was organized in
1987, with the objective of seeking a favorable
total return (from market appreciation and
income) by investing primarily in a diversified
portfolio of equity securities (common stocks
and securities convertible into common
stocks) of established companies whose
primary business is carried on outside the
United States.

FIXED INCOME FUNDS

D.L. BABSON BOND TRUST was
organized in 1944, and has been managed by
Jones & Babson, Inc. since 1972, with the
objective of a high level of current income and
reasonable stability of principal. It offers two
portfolios Portfolio L and Portfolio S.

D. L. BABSON TAX-FREE INCOME
FUND, INC. was organized in 1979, to
provide shareholders the highest level of
regular income exempt from federal income
taxes consistent with investing in quality
municipal securities. It offers three separate
high-quality portfolios (including a money
market portfolio) which vary as to average
length of maturity. Income from the Tax-Free
Money Market portfolio may be subject to
state and local taxes, as well as the
Alternative Minimum Tax.

BUFFALO FUNDS

Jones & Babson also sponsors and manages
the Buffalo Group of Mutual Funds. They are:

BUFFALO BALANCED FUND, INC. was
organized in 1994, with the objective of long-
term capital growth and high current income
through investing in common stocks and
secondarily by investing in convertible bonds,
preferred stocks and convertible preferred
stocks.

10
<PAGE>

BUFFALO EQUITY FUND, INC. was
organized in 1994, with the objective of long-
term capital appreciation to be achieved
primarily by investment in common stocks.
Realization of dividend income is a secondary
consideration.

BUFFALO HIGH YIELD FUND, INC. was
organized in 1994, with the objective of a
high level of current income and secondarily,
capital growth by investing primarily in high-
yielding fixed income securities.

BUFFALO USA GLOBAL FUND, INC.
was organized in 1994, with the objective of
capital growth by investing in common stocks
of companies based in the United States that
receive greater than 40% of their revenues or
pre-tax income from international operations.

A prospectus for any of the Funds may be
obtained from Jones & Babson, Inc., 2440
Pershing Road, Suite G-15, Kansas City,
Missouri 64108.

Jones & Babson, Inc. also sponsors seven
mutual funds which especially seek to provide
services to customers of affiliate banks of UMB
Financial Corporation. They are: Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc. and Scout
Balanced Fund, Inc.

MONEY MARKET SECURITIES
DESCRIBED AND RATINGS

In evaluating investment suitability, each
investor must relate the characteristics of a
particular investment under consideration to
personal financial circumstances and goals.

Money market instruments are generally
described as short-term debt obligations issued
by governments, corporations and financial
institutions. Usually maturities are one year or
less.

The yield from this type of instrument is very
sensitive to short-term lending conditions. Thus,
the income of the Fund will follow closely the
trend of short-term interest rates, rising when
those rates increase and declining when they
fall.

Because of the short maturities, fluctuation in
the principal value of money market-type
securities resulting from changes in short-term
interest rates normally will not be sufficient to
change the net asset value (price) per share.
Although the Fund's shareholders can anticipate
that this principal value stability will be
reflected in the price of the Fund's shares, it
cannot be guaranteed.

A money market security does not have the
characteristics usually associated with a long-
term investment. Long-term investors who
commit their assets to a money market security
must understand that short-term interest rates
have a history of sharp and frequent peaks and
valleys. Thus, there me be occasions when the
rates are sufficiently low as to be unattractive
when compared to the return on other types of
investments. The investor who commits long-
term funds to a short-term investment is exposed
to the risks associated with buying and selling
securities in anticipation of unpredictable future
market events.

Description of Bond ratings:

Standard & Poor's Corporation (S&P) . . .

AAA - Highest Grade. These securities
possess the ultimate degree of protection as to
principal and interest. Marketwise, they move
with interest rates and hence provide the
maximum safety on all counts.

AA - High Grade. generally, these bonds
differ from AAA issues only in a small
degree. Here too, prices move with the long-
term money market.

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

11
<PAGE>

Moody's Investors Service, Inc. (Moody's) .
Aaa - Best Quality. These securities carry the
smallest degree of investment risk and arc
generally referred to as "gilt-edged." Interest
payments are protected by a large, or by an
exceptionally stable margin, and principal is
secure. While the various protective elements
are likely to change, such changes as can be
visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - High Quality by All Standards. They are
rated lower than the best bonds because
margins of protection may not be as large as
in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there
may be other elements present which make
the long-term risks appear somewhat greater

A - Upper-medium Grade. Factors giving
security to principal and interest are
considered adequate, but elements may be
present which suggest a susceptibility to
impairment sometime in the future.

Description of Commercial Paper Ratings:

Moody's . . . Moody's commercial paper
rating is an opinion of the ability of an issuer to
repay punctually promissory obligations not
having an original maturity in excess of nine
months. Moody's has one rating - prime. Every
such prime rating means Moody's believes that
the commercial paper note will be redeemed as
agreed. Within this single rating category are
the following classifications:

Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality

The criteria used by Moody's for rating a
commercial paper issuer under this graded
system include, but are not limited to the
following factors:

(1) evaluation of the management of the
issuer;

(2) economic evaluation of the issuer's
industry or industries and an appraisal of
speculative type risks which may be
inherent in certain areas;

(3) evaluation of the issuer's products in
relation to competition and customer
acceptance;

(4) liquidity;

(5) amount and quality of long-term debt;

(6) trend of earnings over a period of ten
years;

(7) financial strength of a parent company and
relationships which exist with the issuer;
and

(8) recognition by the management of
obligations which me be present or me
arise as a result of public interest questions
and preparations to meet such obligations.

S&P . . . Standard & Poor's commercial
paper rating is a current assessment of the
likelihood of timely repayment of debt having an
original maturity of no more than 270 days.
Ratings are graded into four categories, ranging
from "A" for the highest quality obligations to
"D" for the lowest. The four categories are as
follows:

"A" Issues assigned this highest rating are
regarded as having the greatest capacity
for timely payment. Issues in this category
are further refined with the designations 1,
2, and 3 to indicate the relative degree of
safety.

"A-1" This designation indicates that the
degree of safety regarding timely
payment is very strong.

"A-2" Capacity for timely payment on
issues with this designation is
strong. However, the relative
degree of safety is not as
overwhelming.

12
<PAGE>

"A-3" Issues carrying this designation
have a satisfactory capacity for
timely payment. They are, however
somewhat more vulnerable to the
adverse effects of changes in
circumstances than obligations
carrying the higher designations.

"B" Issues rated "B" are regarded as having
only an adequate capacity for timely
payment. Furthermore; such capacity may
be damaged by changing conditions or
short-term adversities.

"C" This rating is assigned to short-term debt
oblations with a doubtful capacity for
payment.
"D" This rating indicates that the issuer is
either in default or is expected to be in
default upon maturity.

FINANCIAL STATEMENTS

The audited financial statements of the Fund
which are contained in the June 30, 1996
Annual Report to Shareholders, are incorporated
herein by reference.

13
<PAGE>

PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS.

Herewith are all financial statements and exhibits filed as
a part of this registration statement:

(a) Financial Statements:

Included in Part A - Prospectus:

Per Share Capital and Income Changes

Included in Part B - Statement of Additional
Information:

The audited financial statements contained in the
most recent Annual Report to Shareholders of D. L.
Babson Money Market Fund, Inc., are incorporated
by reference into Part B. of this Registration
Statement.

Included in Part C - Other Information:

Consent of Independent Public Accountants Arthur
Andersen & Co.

(b) *(1) Registrant's Articles of Incorporation.

*(2) Registrant's Bylaws.

(3) Not applicable, because there is no voting
trust agreement.

*(4) Specimen copy of each security to be issued by
the registrant.

*(5) (a) Form of Management Agreement between
Jones & Babson, Inc. and the Registrant.

(b) Form of Investment Counsel Agreement
between Jones & Babson, Inc. and Babson-
Stewart Ivory International.

*(6) Form of principal Underwriting Agreement
between Jones & Babson, Inc. and the
Registrant.

(7) Not applicable, because there are no pension,
bonus or other agreements for the benefit of
directors and officers.

*(8) Form of Custodian Agreement between Registrant
and United Missouri Bank of Kansas City, N. A.

(9) There are no other material contracts not made
in the ordinary course of business between the
Registrant and others.

(10) Opinion and consent of counsel as to the
legality of the registrant's securities being
registered. (To be supplied annually pursuant
to Rule 24f-2 of the Investment Company Act of
1940.)

*(11) The consent of Arthur Andersen & Co.,
Independent Public Accountants.

(12) Not applicable.

*(13) Letter from contributors of initial capital to
the Registrant that purchase was made for
investment purposes without any present
intention of redeeming or selling.

*(14) Copies of the model plan used in the establishment
of any retirement plan in conjunction with which
Registrant offers its securities.

(15) Not applicable.

*(16) Schedule for computation of performance
quotations.

*(17) Copies of Powers of Attorney pursuant to Rule
402(c).

*Previously filed and incorporated herein by reference.

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.

NONE

Item 26. NUMBER OF HOLDERS OF SECURITIES.

The number of record holders of each class of securities of
the Registrant as of October 18, 1996, is as follows:

(1) (2)
Title of class Number of Record Holders

Common Stock $0.01 par value 692
Federal Portfolio

Common Stock $0.01 par value 2,543
Prime Portfolio

Item 27. INDEMNIFICATION.

Under the terms of the Maryland General Corporation Law and
the company's By-laws, the company shall indemnify any
person who was or is a director, officer, or employee of the
company to the maximum extent permitted by the Maryland
General Corporation Law; provided however, that any such
indemnification (unless ordered by a court) shall be made by
the company only as authorized in the specific case upon a
determination that indemnification of such persons is proper
in the circumstances. Such determination shall be made

(i) by the Board of Directors by a majority vote of a
quorum which consists of the directors who are neither
"interested persons" of the company as defined in
Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or

(ii) if the required quorum is not obtainable or if a quorum
of such directors so directs, by independent legal
counsel in a written opinion.

No indemnification will be provided by the company to any
director or officer of the company for any liability to the
company or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of duty.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.

The principal business of Jones & Babson, Inc. is the
management of the Babson family of mutual funds. It also
has expertise in the tax and pension plan field. It
supervises a number of prototype and profit-sharing plan
programs sponsored by various organizations eligible to be
prototype plan sponsors.

The principal business of David L. Babson & Co., Inc. is to
provide investment counsel and advice to a wide variety of
clients. It supervises assets in excess of $3,000,000,000.

Item 29. PRINCIPAL UNDERWRITERS.

(a) Jones & Babson, Inc., the only principal underwriter of
the Registrant, also acts as principal underwriter for
the David L. Babson Growth Fund, Inc., Babson
Enterprise Fund, Inc., Babson Value Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., D.L. Babson Bond
Trust, Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., UMB Stock Fund, Inc., UMB
Bond Fund, Inc., UMB Money Market Fund, Inc., UMB
Tax-Free Money Market Fund, Inc. and UMB Qualified
Dividend Fund, Inc.

(b) Herewith is the information required by the following
table with respect to each director, officer or partner
of the only underwriter named in answer to Item 21 of
Part B:

Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant

Stephen S. Soden Chairman and Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Larry D. Armel President and Director President and
2440 Pershing Road, G-15 Director
Kansas City, MO 64108

Giorgio Balzer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Robert T. Rakich Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Edward S. Ritter Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Robert N. Sawyer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Vernon W. Voorhees Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

P. Bradley Adams Vice President Vice President
2440 Pershing Road, G-15 and Treasurer and Treasurer
Kanasas City, Missouri 64108

Michael A. Brummel Vice President Vice President
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

Martin A. Cramer Vice President Vice President
2440 Pershing Road, G-15 and Secretary and Secretary
Kanasas City, Missouri 64108

Elizabeth L. Allwood Asst. Vice President Vice President
2440 Pershing Road, G-15 & Asst. Secretary & Asst. Secretary
Kanasas City, Missouri 64108

Constance E. Martin Asst. Vice President Vice President
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

(c) The principal underwriter does not receive any
remuneration or compansation for the duties or services
rendered to the Registrant pursuant to the principal
underwriting Agreement.

Item 30. LOCATION OF ACCOUNTS AND RECORDS.

Each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules
(17 CFR 270.31a-1 to 31a-3) promulgated thereunder is in the
physical possession of Jones & Babson, Inc., at Three Crown
Center, 2440 Pershing Road, G-15, Kansas City, Missouri
64108.

Item 31. MANAGEMENT SERVICES.

All management services are covered in the management
agreement between the Registrant and Jones & Babson, Inc.,
which are discussed in Parts A and B.

Item 32. DISTRIBUTION EXPENSES.

Not applicable.

Item 33. UNDERTAKINGS.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for effectiveness of this
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 authorized, in the City of Kansas City,
and State of Missouri on the 18th day of October, 1996.

D. L. BABSON MONEY MARKET FUND, INC.
(Registrant)

By Larry D. Armel
(Larry D. Armel, President)

Pursuant to the requirements of the Securities Act of 1933,
this Post-effective Amendment #23 to the Registration Statement
has been signed below by the following persons in the capacities
and on the date indicated.

Larry D. Armel President, Principal October 18, 1996
Larry D. Armel Executive Officer, and
Director

H. David Rybolt Director October 18, 1996
H. David Rybolt*

William H. Russell Director October 18, 1996
William H. Russell*

Francis C. Rood Director October 18, 1996
Francis C. Rood*

P. Bradley Adams Treasurer and Principal October 18, 1996
P. Bradley Adams Financial and Accounting Officer

*Signed pursuant to Power of Attorney

By Larry D. Armel
Attorney-in-Fact

REPRESENTATIONS OF COUNSEL

I assisted in the preparation of this Post Effective Amendment to
the Fund's Registration Statement filed under the Securities Act
of 1933 and the Amendment to the Fund's Registration Statement
filed under the Investment Company Act of 1940. Based on my
review it is my opinion that this amendment does not contain
disclosures which would render it ineligible to become effective
pursuant to paragraph (b) of Rule 485 under the Securities Act of
1933.

John G. Dyer Attorney October 18, 1996
John G. Dyer

<PAGE>

ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference of our report dated July 26, 1996, included in the D. L. Babson
Money Market Fund, Inc.'s Annual Report for the year ended June 30, 1996
(and all references to our Firm) included in or made a part of this Post-
effective Amendment No. 23 to the Registration Statement File No. 2-79132
under the Securities Act of 1933 and Amendment No. 25 to the Registration
Statement File No. 811-3558 under the Investment Company Act of 1940 on
Form N-1A.

ARTHUR ANDERSEN LLP

Kansas City, Missouri,
October 11, 1996

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
D. L. Babson Money Market Fund, Inc. - Prime Portfolio
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 35401898
<INVESTMENTS-AT-VALUE> 35401898
<RECEIVABLES> 264704
<ASSETS-OTHER> 254750
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35921352
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15832
<TOTAL-LIABILITIES> 15832
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35917080
<SHARES-COMMON-STOCK> 35900523
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (11560)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 35905520
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2149808
<OTHER-INCOME> 0
<EXPENSES-NET> 348694
<NET-INVESTMENT-INCOME> 1801114
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1801114
<EQUALIZATION> 0
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<ARTICLE> 6
<LEGEND>
D. L. Babson Money Market Fund, Inc. - Federal Portfolio
</LEGEND>

<S> <C>
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