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<PAGE> PAGE 22
074 R010600 0
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080 A000600 X
080 C000600 1
081 A000600 N
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082 A000600 N
082 B000600 0
083 A000600 N
083 B000600 0
084 A000600 N
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085 A000600 N
085 B000600 N
029 000700 N
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031 A000700 0
031 B000700 0
032 000700 0
033 000700 0
034 000700 Y
035 000700 158
036 A000700 N
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037 000700 N
038 000700 0
039 000700 N
040 000700 Y
041 000700 Y
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<PAGE> PAGE 23
044 000700 0
062 A000700 N
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071 A000700 0
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<PAGE> PAGE 24
072CC010700 0
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080 A000700 X
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<PAGE> PAGE 25
029 000800 N
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<PAGE> PAGE 26
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<PAGE> PAGE 27
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SIGNATURE LESLIE L. OGG
TITLE VICE PRESIDENT
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<NAME> IDS DIVERSIFIED EQUITY INCOME FUND CLASS A
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</TABLE>
Independent Auditors' Report on Internal Accounting
Control
The Board of Directors and Shareholders
IDS Investment Series, Inc.:
In planning and performing our audits of the financial
statements of IDS Mutual and IDS Diversified Equity
Income Fund (funds within IDS Investment Series,
Inc.) for the year ended September 30, 1997, we
considered its internal control, including control
activities 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.
The management of IDS Investment Series, Inc. is
responsible for establishing and maintaining of internal
control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the
expected benefits and related costs of controls.
Generally, controls that are relevant to an audit pertain
to the entity's objective of preparing financial
statements for external purposes that are fairly presented
in conformity with generally accepted accounting
principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal control,
errors or irregularities may occur and not be detected.
Also, projection of any evaluation of internal control 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 would not
necessarily disclose all matters in the internal control
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 one or more of the
internal control components 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 matters involving the internal
control and its operation, including controls for
safeguarding securities, that we consider to be a material
weakness as defined above.
This report is intended solely for the information and
use of management, the Board of Directors of IDS
Investment Series, Inc., and the Securities and Exchange
Commission.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 7, 1997