<PAGE> PAGE 1
000 B000000 07/31/97
000 C000000 0000352663
000 D000000 N
000 E000000 NF
000 F000000 Y
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000 I000000 3.0.a
000 J000000 U
001 A000000 IDS DISCOVERY FUND, INC.
001 B000000 811-3178
001 C000000 6126712772
002 A000000 IDS TOWER 10
002 B000000 MINNEAPOLIS
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002 D020000 0010
003 000000 N
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007 C030300 N
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007 C010500 5
007 C010600 6
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007 C011000 10
020 A000001 AMERICAN ENTERPRISE INV. SERV. INC.
020 B000001 41-1667086
020 C000001 255
020 A000002 S.B.C.I. SECURITIES
020 B000002 13-2639550
020 C000002 145
020 A000003 ROBERTSON, STEPHENS & CO,. L.P.
020 B000003 94-2524501
020 C000003 137
020 A000004 SALOMON BROTHERS INC.
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<PAGE> PAGE 2
020 A000005 ALEX BROWN & SONS INC.
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020 A000006 MORGAN STANLEY & CO., INC.
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020 C000006 100
020 A000007 CREDIT SUISSE FIRST BOSTON CORP.
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020 C000007 98
020 A000008 SMITH BARNEY INC.
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020 C000008 95
020 A000009 WEEDEEN & CO., L.P.
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020 C000009 91
020 A000010 LEHMAN BROTHERS INC.
020 B000010 13-2518466
020 C000010 77
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022 A000005 FIRST CHICAGO CAPITAL MKTS. INC.
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022 C000005 56912
022 D000005 40903
022 A000006 NATIONSBANK (J.P.)
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022 C000006 57124
022 D000006 38402
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<PAGE> PAGE 3
022 A000009 HAMBRECHT & QUIST LLC
022 B000009 94-3220242
022 C000009 38907
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022 A000010 PIPPER JAFFRAY INC.
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<PAGE> PAGE 7
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SIGNATURE LESLIE L. OGG
TITLE VICE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> IDS DISCOVERY FUND CLASS A
<PERIOD TYPE> 12-MOS
<FISCAL YEAR END> JUL-31-1997
<PERIOD END> JUL-31-1997
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<TOTAL LIABILITIES> 19515914
<SENIOR EQUITY> 0
<PAID IN CAPITAL COMMON> 807339088
<SHARES COMMON STOCK> 69437141
<SHARES COMMON PRIOR> 63641887
<ACCUMULATED NII CURRENT> 313207
<OVERDISTRIBUTION NII> 0
<ACCUMULATED NET GAINS> 52602516
<OVERDISTRIBUTION GAINS> 0
<ACCUM APPREC OR DEPREC> 217218780
<NET ASSETS> 904404070
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<INTEREST INCOME> 4720707
<OTHER INCOME> 0
<EXPENSES NET> 10711290
<NET INVESTMENT INCOME> (3346524)
<REALIZED GAINS CURRENT> 64779024
<APPREC INCREASE CURRENT> 244479200
<NET CHANGE FROM OPS> 305911700
<EQUALIZATION> 0
<DISTRIBUTIONS OF INCOME> (1927449)
<DISTRIBUTIONS OF GAINS> (99183189)
<DISTRIBUTIONS OTHER> 0
<NUMBER OF SHARES SOLD> 62998962
<NUMBER OF SHARES REDEEMED> (66170688)
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<EXPENSE RATIO> 1.13
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<AVG DEBT PER SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> IDS DISCOVERY FUND CLASS B
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<DIVIDEND INCOME> 2644059
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<OTHER INCOME> 0
<EXPENSES NET> 10711290
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<APPREC INCREASE CURRENT> 244479200
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<EQUALIZATION> 0
<DISTRIBUTIONS OF INCOME> 0
<DISTRIBUTIONS OF GAINS> (8597468)
<DISTRIBUTIONS OTHER> 0
<NUMBER OF SHARES SOLD> 4259010
<NUMBER OF SHARES REDEEMED> (1258366)
<SHARES REINVESTED> 777346
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<ACCUMULATED NII PRIOR> 2185644
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<AVERAGE NET ASSETS> 70031595
<PER SHARE NAV BEGIN> 10.63
<PER SHARE NII> (.11)
<PER SHARE GAIN APPREC> 3.89
<PER SHARE DIVIDEND> 0
<PER SHARE DISTRIBUTIONS> (1.59)
<RETURNS OF CAPITAL> 0
<PER SHARE NAV END> 12.82
<EXPENSE RATIO> 1.90
<AVG DEBT OUTSTANDING> 0
<AVG DEBT PER SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD TYPE> 12-MOS
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<PERIOD END> JUL-31-1997
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<INVESTMENTS AT VALUE> 1092513152
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<SHARES COMMON PRIOR> 4825606
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<NET ASSETS> 72157200
<DIVIDEND INCOME> 2644059
<INTEREST INCOME> 4720707
<OTHER INCOME> 0
<EXPENSES NET> 10711290
<NET INVESTMENT INCOME> (3346524)
<REALIZED GAINS CURRENT> 64779024
<APPREC INCREASE CURRENT> 244479200
<NET CHANGE FROM OPS> 305911700
<EQUALIZATION> 0
<DISTRIBUTIONS OF INCOME> (265909)
<DISTRIBUTIONS OF GAINS> (8324287)
<DISTRIBUTIONS OTHER> 0
<NUMBER OF SHARES SOLD> 3296071
<NUMBER OF SHARES REDEEMED> (3358084)
<SHARES REINVESTED> 772708
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<ACCUMULATED GAINS PRIOR> 107595881
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</TABLE>
KPMG Peat Marwick LLP
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
Independent Auditors' Report on Internal
Accounting Control
The Board of Directors and Shareholders
IDS Discovery Fund, Inc.:
In planning and performing our audits of the
financial statements of IDS Discovery Fund ,
Inc. , for the year ended July 31, 1997, we
considered their internal control structure,
including procedures for safeguarding securities,
in order to determine our auditing procedures for
the purpose of expressing our opinion on the
financial statements and to comply with the
requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of IDS Discovery Fund, Inc.
is responsible for establishing and maintaining
a system of internal accounting control.
In fulfilling this responsibility, estimates
and judgments by management are required to assess
the expected benefits and related costs of
internal control structure policies and
procedures. Two of the objectives of an internal
control structure are to provide management with
reasonable, but not absolute, assurance that
assets are safeguarded against loss from
unauthorized use or disposition and that
transactions are executed in accordance with
management's authorization and recorded properly
to permit the preparation of financial statements
in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal
control structure, errors or irregularities may
occur and not be detected. Also, projection of
any evaluation of the structure to future periods
is subject to the risk that it may become
inadequate because of changes in conditions or
that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control
structure would not necessarily disclose all
matters in the internal control structure that
might be material weaknesses under standards
established by the American Institute of
Certified Public Accountants. A material weakness
is a condition in which the design or operation
of the specific internal control structure
elements does not reduce to a relatively low
level the risk that errors or irregularities
in amounts that would be material in relation
to the financial statements being audited may
occur and not be detected within a timely
period by employees in the normal course of
performing their assigned functions. However,
we noted no matter involving the internal control
structure, including procedures for safeguarding
securities, that we consider to be a material
weakness as defined above as of July 31, 1997.
This report is intended solely for the
information and use of management and the Securities
and Exchange Commission.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
September 5, 1997
