FUND FOR TAX FREE INVESTORS INC, 485BPOS, 2000-04-27

FUND FOR TAX FREE INVESTORS INC
485BPOS, 2000-04-27

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As Filed With The Securities And Exchange Commission on April 27, 2000.

File Nos. 2-83299 and 811-3720

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. 18 (X)

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940(X)

Amendment No. 19 (X)

Fund for Tax-Free Investors, Inc.
(Exact Name of Registrant as Specified in Charter)

4922 Fairmont Avenue, Bethesda, Maryland 20814
(Address of Principal Executive Offices) (Zip Code)

(301) 657-1500
(Registrant's Telephone Number, Including Area Code)

Stephenie E. Adams
4922 Fairmont Avenue
Bethesda, Maryland 20814
(Name and Address of Agent for Service of Process)

Approximate Date of Commencement of the Proposed Public Offering of
the Securities:

It is proposed that this filing will become effective (check
appropriate box):

___ immediately upon filing pursuant to paragraph (b) of rule 485.
_X_ on May 1, 2000 pursuant to paragraph (b) (1) (v) of rule 485.
___ 60 days after filing pursuant to paragraph (a) (1) of rule 485.
___ on (date) pursuant to paragraph (a) (1) of rule 485.
___ 75 days after filing pursuant to paragraph (a) (2) of rule 485.
___ on (date) pursuant to paragraph (a) (2) of rule 485.

<PAGE>

CROSS REFERENCE SHEET

Form N-1A Location in
Item No. Registration Statement

Part A. Information Required in Prospectus
1. Front and Back Cover Pages Front Cover Page of Prospectus;
Back Cover Page of Prospectus

2. Risk/Return Summary Risk and Return Summary

3. Risk/Return Summary: Fee Risk/Return Bar Chart and
Table Table; Performance Table; Fees
and Expenses

4. Investment Objectives, Investment Objectives,
Principal Investment Principal Investment
Strategies, and Related Risks Strategies, and Related Risks

5. Management's Discussion of Management Discussion of Fund
Fund Performance Performance: Performance
Comparison

6. Management, Organization, and Management, Organization, and
Capital Structure Capital Structure: Investment
Adviser; Year 2000 Preparations

7. Shareholder Information Shareholder Information: How
to Invest in the Fund; How to
Redeem Your Investment;
Additional Information About
the Fund: Exchanging Fund
Shares; Pricing of Fund Shares;
Dividends and Distributions;
Tax Consequences of Investing
in the Fund

8. Distribution Arrangements Not Applicable

9. Financial Highlights Financial Highlights
Information

Part B: Information Required In Statement of Additional Information

10. Cover Page and Table of Cover Page and Table of
Contents Contents

11. Fund History Not Applicable

12. Description of the Fund and Fund Description, Investments,
Its Investments and Risks and Risks; Investment
Limitations

13. Management of the Fund Management of the Fund

14. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities

15. Investment Advisory and Other Investment Advisory and Other
Services Services: Investment Adviser;
Custodian and Independent
Public Accountant

16. Brokerage Allocation and Other Brokerage Allocation and Other
Practices Practices

17. Capital Stock and Other Not Applicable
Securities

18. Purchase, Redemption and Purchase and Redemption of
Pricing of Shares Shares

19. Taxation of the Fund Taxation of the Fund

20. Underwriters Not Applicable

<PAGE>

Form N-1A Location in
Item No. Registration Statement

21. Calculation of Performance Calculation of Performance
Data Data: Average Annual Total
Return Quotation; Computation
of Yield

22. Financial Statements Financial Statements

Part C: Other Information

23. Exhibits Exhibits

24. Persons Controlled by or Under Persons Controlled by or Under
Common Control with the Fund Common Control with the Fund

25. Indemnification Indemnification

26. Business and Other Connections Business and Other Connections
of Investment Adviser of Investment Adviser

27. Principal Underwriters Not Applicable

28. Location of Accounts and Location of Accounts and
Records Records

29. Management Services Not Applicable

32. Undertakings Not Applicable
Signatures Signatures

<PAGE>

PART A

<PAGE>

FUND for TAX-FREE INVESTORS, INC.

Rushmore Tax-Free Money Market Portfolio

Prospectus
May 1, 2000

Fund for Tax-Free Investors, Inc. is a no-load investment company with
three separate portfolios. The Rushmore Tax-Free Money Market
Portfolio (the "Fund"), one of the three portfolios, is described in
this Prospectus.

This Prospectus contains important information about the Fund and
should be read before investing. Please keep the Prospectus on file
for future reference.

As with all mutual funds, the Securities and Exchange Commission has
not approved or disapproved of the Fund's shares or determined whether
this prospectus is truthful or complete. To state otherwise is a
crime.

<PAGE>

TABLE of CONTENTS

Page

Risk and Return Summary:
Investments, Risks, and Performance 3
Risk/Return Bar Chart and Table 3
Performance Table and Yields 4

Fees and Expenses 4

Investment Objectives, Principal Investment
Strategies, and Related Risks 5

Shareholder Information 6
How to Invest in the Fund 6
How to Redeem Your Investment 6

Additional Information About the Fund 8
Exchanging Fund Shares 8
Pricing of Fund Shares 8
Dividends and Distributions 8
Tax Consequences of Investing in the Fund 8

Management, Organization, and Capital Structure 9
Investment Adviser 9
Agreement with Friedman Billings
Ramsey Group, Inc. 9

Financial Highlights 10

<PAGE>

RISK and RETURN SUMMARY
Investments, Risks, and Performance

Fund Investment Objective
Consistent with preservation of capital, the Rushmore Tax-Free Money
Market Portfolio seeks to provide investors with current income
derived from investments made principally in short-term municipal
securities exempt from federal income tax.

Principal Fund Investment Strategy
In attempting to achieve this objective, the Fund invests in short-
term high quality, tax-exempt municipal securities selected on the
basis of liquidity and safety of principal.

Principal Risks of Investing in the Fund
Because the Fund invests in municipal money market securities, the
Fund's performance may be affected by state and local economic
conditions and political developments, as well as the ability of
issuers to meet their obligations. Moreover, as a debt security,
municipal money market securities are effected by changing interest
rates. During a period of falling interest rates, it is likely that
debt securities will be prepaid, or "called", prior to maturity,
requiring the proceeds to be invested at a generally lower interest
rate.

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

Risk/Return Bar Chart and Tables
The chart and table below shows the annual calendar-year returns and
the performance of the Fund. The Fund commenced operations on
September 9, 1983, and has a fiscal year-end of December 31. The
information in the chart and the table provides some indication of the
risks of investing in the Fund by showing changes in Fund performance
from year to year.

The chart and the table below assume the reinvestment of dividends and
distributions. Please keep in mind that how the Fund has performed in
the past does not necessarily indicate how the Fund will perform in
the future.

Annual Total Return Chart

1989 5.76%
1990 5.31%
1991 4.01%
1992 2.25%
1993 1.66%
1994 2.02%
1995 3.09%
1996 2.69%
1997 2.93%
1998 2.73%
1999 2.50%

Best Quarter: 1.51% 2nd Qtr of 1989
Worst Quarter: 0.38% 1st Qtr of 1994

The Fund's year-to-date total return as of March 31, 2000 was 0.66%.

<PAGE>

Performance Table
Average Annual Total Returns
(for Periods Ended December 31, 1999)

One Year 2.50%
Five Years 2.79%
Ten Years 2.92%

Yields
(as of December 31, 1999)

7-Day 3.568%
7-Day Effective 3.631%
7-Day Effective Tax-Equivalent* 6.012%

*Assuming a 39.6% tax bracket.

For current yield information please call 1-800-622-1386.

FEES and EXPENSES

This tables describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. The following expenses are deducted
from Fund assets.

Annual Fund Operating Expenses

Management Fees 0.50%
Other Expenses 0.25%
-----
Total Annual Fund Operating Expenses 0.75%
=====

If your monthly account balance averages less than $500 you may be
charged a $5 fee.

Example

This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund for the time
periods indicated below and then redeem all of your shares at the end
of those periods. The Example also assumes that your investment has a
5% return each year, that all dividends are reinvested, and that the
Fund's operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would
be:

1 year 3 years 5 years 10 years
$ 77 $ 240 $ 417 $ 930

<PAGE>

INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES, and RELATED RISKS

Principal and Other Investment Strategies
In attempting to achieve its objective, the Fund will invest at least
80% of the value of its net assets in short-term, tax-exempt municipal
obligations which, at the time of purchase, are rated within the top
two grades assigned by Moody's Investors Service, Inc. or Standard &
Poor's Corporation. The Fund may also purchase, without limitation,
unrated municipal securities if, in the opinion of the Adviser, they
are of an investment quality comparable to that of rated securities
eligible for purchase by the Fund. The Fund will not, under normal
conditions, invest in securities having a remaining maturity greater
than 397 days at the time of purchase, nor will the dollar-weighted
average maturity of its portfolio exceed 90 days.

The Fund may also purchase new issues of municipal securities on a
"when issued" basis; that is, at the time of the purchase commitment,
both the interest and principal amount are fixed and payment and
delivery of the securities normally occurs in 15 to 45 days. The Fund
intends to enter into purchase orders for "when-issued" securities
with the intention of actually taking delivery of such securities, but
it may sell "when-issued" securities prior to delivery if it is deemed
advisable as a matter of investment strategy. The Fund does not
intend to invest more than 25% of its net assets in these securities.

Although it is the intention of the Fund to invest all of its assets
in municipal securities, market conditions may arise that limit the
availability of such obligations. During such periods, the Fund may
invest up to 20% of its assets in short-term, taxable obligations of
the United States government, federal agencies and government-
sponsored enterprises, or in repurchase agreements secured by such
securities (although the Fund has never invested in repurchase
agreements and has no intentions of doing so). The Fund will invest
in taxable securities only as a temporary measure, either because of
their liquidity or because of the unavailability of short-term, tax-
exempt securities meeting the quality characteristics specified above.
Income from such securities may be taxable for federal and/or state
income tax purposes. Additionally, the Fund may invest up to 20% of
its net assets in securities that are subject to the alternative
minimum tax.

The Portfolio may also purchase certain tax-exempt municipal
obligations which have a variable rate of interest. Such obligations
bear interest at rates which vary with changes in specific market
rates or indices, such as the bank prime rate. These securities will
be permitted for inclusion in the Fund's portfolio even though they
may have a maturity which is greater than one year. Investment in
these securities will be made only if a secondary market for them
exists or if the Fund may redeem them on demand within seven days.

Risks of Investing in the Fund
Because the Fund invests in municipal money market securities, the
Fund's performance may be affected by state and local economic
conditions and political developments, as well as the ability of
issuers to meet their obligations.

During the period between the purchase commitment of a "when issued"
security and actual delivery, no interest accrues to the purchaser and
the market value of the security may fluctuate (although the Fund
intends to take immediate delivery of these securities upon purchase).

Although the Fund invests in variable rate securities that entitle the
Fund to demand repayment in full (thus reducing credit risk), the
demand feature is not always unconditional and may make the securities
more difficult to sell quickly or without loss. Moreover, as a debt
security, municipal money market securities are effected by changing
interest rates. During a period of falling interest rates, it is
likely that debt securities will be prepaid, or "called", prior to
maturity, requiring the proceeds to be invested at a generally lower
interest rate.

<PAGE>

SHAREHOLDER INFORMATION

How to Invest In The Fund

Facts To Know Before You Invest:
- The minimum initial investment is $2,500
- There are no minimum amounts for subsequent investments
- There are no sales charges
- The Fund reserves the right to reject any purchase order
- All shares are electronically recorded; the Fund will not issue
certificates
- A $10 fee may be charged for items returned for insufficient or
uncollectible funds
- The securities market, in which the Fund buys and sells its
securities, usually requires settlement in Federal funds for all
transactions. Payments received by bank wire can be converted
immediately into Federal funds and will begin earning dividends the
same day provided the order was received prior to 12 Noon, Eastern
time. Payment for the purchase of Fund shares not received in the
form of Federal funds (i.e., by check) will normally begin earning
dividends within two business days.

Purchasing Shares:

By Mail
Complete an application and make a check payable to "Fund for Tax-
Free Investors, Inc." Send your completed and signed application
and check drawn on a U.S. bank to:

Fund for Tax-Free Investors, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 208l4

By Bank Wire
Speak to the branch manager of your bank. Request a transfer of
Federal funds to Rushmore Trust and Savings, FSB, instructing the
bank to wire transfer the money before 12:00 Noon, Eastern time to:

Rushmore Trust and Savings, FSB
Bethesda, Maryland
Routing # 0550-71084

Specify the Fund name, your account number (if assigned), and the
name(s) in which the account is registered.

After instructing your bank to transfer Federal funds, you must
telephone Shareholder Services at (800) 622-1386 or (301) 657-1510
between 8:30 A.M. and 12:00 P.M., Eastern time and tell us the
amount you transferred and the name of the bank sending the
transfer. Your bank may charge a fee for its services. Remember
that it is important to complete the wire transfer before 12:00
Noon Eastern time.

Through Brokers
You may invest in the Fund by purchasing shares through registered
broker-dealers, banks or other financial institutions that purchase
securities for their customers. Please note that such third
parties may charge a fee for their services.

<PAGE>

How To Redeem Your Investment

Redeeming Shares:

By Telephone
Contact Shareholder Services at 1-800-622-1386
between the hours of 8:30 A.M. and 4:30 P.M., Eastern time

For your protection, we will take measures to verify your identity
by requiring some form of personal identification prior to acting
on telephone instructions and may also record telephone
transactions. A written confirmation will be mailed to you within
five business days after your redemption. Please note that we may
terminate or modify telephone redemption privileges upon 60 days
notice.

By Mail or Fax

Mail your instructions for Fax your instructions for
redemption to: redemption to:

Rushmore Trust and Savings, FSB (301) 657-1520
4922 Fairmont Avenue Attn: Shareholder Services
Bethesda, MD 20814
Attn: Shareholder Services

Include the following information in your redemption request:
- the name of the Fund and account number you are redeeming from;
- your name(s) and address as it appears on your account;
- the dollar amount or number of shares you wish to redeem;
- your signature(s) as it appears on your account; and
- a daytime telephone number.

Additional Information You Should Know When You Redeem:

- There are no fees charged for redemptions.

- You may receive redemption proceeds by bank wire, check, or through
the Automated Clearing House System (ACH). When the amount to be
redeemed is at least $5,000, we will, upon instruction, wire transfer
the amount to your commercial bank or brokerage account specified in
your account application. For amounts less than $5,000, you may have
redemption proceeds deposited directly into an account specified on
the account application or request that a redemption check be
delivered by mail to your address of record.

- If you request payment of redemptions to a third party or to a
location other than an address on record, the request must be in
writing and your signature must be guaranteed by an eligible
institution (eligible institutions generally include banking
institutions, securities exchanges, associations, agencies or
broker/dealers, and "STAMP" program participants).

- Normally, payment for all shares redeemed will be issued within one
business day. However, withdrawal requests on investments that have
been made by check may be delayed up to ten calendar days following
the investment or until the check clears, whichever occurs first. This
delay is necessary to assure us that investments made by check are
good funds. You will receive redemption proceeds promptly upon
confirmation of receipt of good funds.

- If your monthly account balance averages less than $500 you may be
charged a $5 fee. The fee will not be imposed on accounts established
under the Uniform Gifts or Transfers to Minors Acts. Additionally, we
reserve the right to involuntarily redeem accounts which fall below
$500 after providing 60 days written notice.

- The right of redemption may be suspended, or the date of payment
postponed during the following periods: (a) periods during which the
New York Stock Exchange (NYSE) is closed (other than customary weekend
or holiday closings); (b) periods when trading on the NYSE is
restricted, or an emergency exists, as determined by the Securities
and Exchange Commission, so that disposal of the Fund's investments or
determination of net asset value is not reasonably practicable; or (c)
for such other periods as the Commission, by order, may permit for
protection of the Fund's investors.

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Exchanging Fund Shares
You may exchange shares of the Fund, without cost, for shares of any
of the following Rushmore Funds: Fund for Government Investors,
American Gas Index Fund, U.S. Government Bond Portfolio, Maryland Tax-
Free Portfolio, or the Virginia Tax-Free Portfolio. You may also
exchange shares of the Fund for shares of the Cappiello-Rushmore
Emerging Growth, Growth and Utility Income Funds. The fund you are
exchanging into must be available for sale in your state and the
registration for both accounts must be identical. You should obtain a
current prospectus for the fund into which you are exchanging by
calling (800) 622-1386. Exchanges will be effected at the respective
net asset values of the Funds involved as next determined after
receipt of the exchange request. The Fund may change or cancel their
exchange policies at any time, upon 60 days' notice to shareholders.

Pricing of Fund Shares
The price of a fund's shares on any given day is its net asset value
per share. This figure is computed by dividing the total amortized
value (which approximates market value) of the Fund's investments and
other assets, less any liabilities, by the number of fund shares
outstanding. The net asset value per share of the Fund is determined
as of 12:00 Noon Eastern time on days when the New York Stock Exchange
and the custodian bank are open for business.

The value of the Fund's portfolio of securities is determined on the
basis of fair value as determined in good faith by the Fund's
Directors. In determining fair value, the Fund uses the amortized
cost method of valuing the securities in its portfolio, which involves
valuing a security at its cost adjusted by 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. The
purpose of this method of calculation is to facilitate the maintenance
of a constant Fund net asset value per share of $1.00. Since the Fund
commenced operations in 1983, it has had a constant net asset value of
$1.00; however, there is no assurance the $1.00 net asset value will
be maintained.

Dividends and Distributions
Dividends of the Fund are declared each day the Fund is open for
business and paid monthly. Dividends of the Fund will automatically
be reinvested in additional shares (including fractional shares where
necessary) unless you elect to receive the dividends in cash.
Dividends paid in cash to those investors so electing will be mailed
on the second business day of the following month. Account statements
showing dividends paid will be mailed to shareholders monthly.

Dividends reflect daily net income, which generally consists of
accrued interest and accretion of discount less amortization of
premium and expenses of the Fund. The Fund does not expect to have
capital gain distributions.

"Undeliverable" or "Uncashed" Dividend Checks
If you elect to receive dividends and distributions in cash and the
payment (1) is returned and marked as "undeliverable" or (2)
remains uncashed for six months, your cash election will be changed
automatically and future dividends will be reinvested in the Fund
at the per share net asset value determined as of the date of
payment (normally $1.00). In addition, any undeliverable checks or
checks that remain uncashed for six months will be canceled and
then reinvested in the Fund at the per share net asset value
determined as of the date of cancellation (normally $1.00).

Tax Consequences of Investing

Taxability of Distributions
As long as the Fund meets the requirements for being tax-qualified
regulated investment company, which the Fund intends to do, the
Fund pays no federal income tax on the earnings distributed to
shareholders. As a result, dividends paid by the Fund, whether
reinvested or taken as cash, are considered tax exempt. As
always, we encourage you to verify your tax liability with your tax
professional.

<PAGE>

Taxability of Transactions
Any time you sell or exchange shares of the Fund, it is considered
a taxable event for you. For example, if you exchange shares of
the Fund for shares of another Rushmore or Cappiello-Rushmore fund,
the transaction would be treated as a sale. Consequently, any gain
resulting from the transaction would be subject to federal income
tax.

Shareholders are required by law to certify that their tax
identification number is correct and that they are not subject to
back-up withholding. In the absence of this certification, the
Fund is required to withhold taxes at the rate of 31% on
dividends, capital gains distributions, and redemptions.
Shareholders who are non-resident aliens may be subject to a
withholding tax on dividends earned.

MANAGEMENT, ORGANIZATION and CAPITAL STRUCTURE

Investment Adviser
Money Management Associates ("Adviser"), 100 Lakeshore Drive, Suite
1555, North Palm Beach, Florida 33408, has served as the Fund's
investment adviser since the Fund commenced operations on September 9,
1983. Established in 1974, the Adviser manages six no-load mutual
funds (including the Fund) with total assets under management of
approximately $900 million.

Subject to the general supervision of the Board of Directors of the
Fund, the Adviser manages the investment and reinvestment of the
assets of the Fund and is responsible for the overall management of
the Fund's business affairs. An Adviser Group makes investment
decisions; therefore, no one person is primarily responsible for
making investment decisions. For the advisory services performed, the
Adviser received 0.50% of the average net assets of the Fund for the
fiscal year ended December 31, 1999.

Agreement with Friedman Billings Ramsey Group, Inc.
On October 20, 1999, the Adviser and Rushmore Trust and Savings, FSB,
a majority-owned subsidiary of the Adviser and the Fund's transfer
agent, dividend-disbursing and shareholder servicing agent, reached a
definitive agreement to be acquired by Friedman Billings Ramsey Group,
Inc. The transaction is subject to various regulatory approvals,
including the approval of the Fund's shareholders.

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights table is intended to help you
understand the Fund's financial performance for the past 5 years.
Certain information reflects financial results for a single Fund
share. The total returns in the table represent the rate that you
would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Deloitte & Touche LLP, whose report, along with the
Fund's financial statements, is included in the annual report, which
is available upon request.

<TABLE>

For The Years Ended December 31,
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Per Share Operating Performance:
Net Asset Value, Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net Investment Income 0.02 0.03 0.03 0.03 0.03
-------- -------- -------- -------- --------
Total from Investment Operations 0.02 0.03 0.03 0.03 0.03
-------- -------- -------- -------- --------
Distributions to Shareholders:
Dividends (from net investment income) (0.02) (0.03) (0.03) (0.03) (0.03)
-------- -------- -------- -------- --------
Total Distributions to Shareholders (0.02) (0.03) (0.03) (0.03) (0.03)
-------- -------- -------- -------- --------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 2.50% 2.73% 2.93% 2.69% 3.09%
Ratios and Supplemental Data:
Net Assets at End of Year (in thousands) $17,475 $19,783 $19,177 $18,890 $20,772
Ratio of Expenses to Average Net Assets 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Net Income to Average Net Assets 2.47% 2.70% 2.89% 2.67% 3.04%

</TABLE>

<PAGE>

In addition to this prospectus, the following information is available
to assist you in making an investment decision:

Information Available Upon Request Description

Statement of Additional Information A document that includes
additional information about the
Fund.

Annual and Semiannual Reports Reports that contain information
about the Fund's investments.
The reports also discuss the
market conditions and investment
strategies that significantly
affected the Fund's performance
during its last fiscal year.

There are a variety of ways to receive the above information and make
other inquiries of the Fund. You may contact the Fund directly by
telephone at 1-800-622-1386, visit our internet site at
http://www.rushmorefunds.com, or you may send a written request to the
Fund's offices at 4922 Fairmont Avenue, Bethesda, Maryland 20814.
Additional information about the Fund can also be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in
Washington D.C. (for hours of operation please call the Commission at
1-800-SEC-0330). You may also obtain copies of the information by
visiting the Commission's internet site at http://www.sec.gov, or,
upon payment of a duplicating fee, by writing the Public Reference
Section of the Commission at 450 Fifth Street, N.W. Washington, D.C.
20549.

Fund for Tax-Free Investors, Inc. Investment Company Act File No. 811-3720

<PAGE>

FUND for TAX-FREE INVESTORS, INC.

Rushmore Maryland Tax-Free Portfolio
Rushmore Virginia Tax-Free Portfolio

Prospectus
May 1, 2000

Fund for Tax-Free Investors, Inc. is a no-load investment company with
three separate portfolios. Two of the portfolios, the Rushmore
Maryland Tax-Free Portfolio ("Maryland Portfolio") and the Rushmore
Virginia Tax-Free Portfolio ("Virginia Portfolio") are described in
this Prospectus.

This Prospectus contains important information about the Maryland and
Virginia Portfolios (the "Funds") and should be read before investing.
Please keep the Prospectus on file for future reference.

<PAGE>

TABLE of CONTENTS

Page

Risk and Return Summary:
Investments, Risks, and Performance
Risk/Return Bar Chart and Table
Performance Table

Fees and Expenses

Investment Objectives, Principal Investment
Strategies, and Related Risks
Maryland Tax-Free Portfolio
Virginia Tax-Free Portfolio

Management's Discussion of Fund Performance
Performance Comparison

Shareholder Information
How to Invest in the Funds
How to Redeem Your Investment

Additional Information About the Fund
Exchanging Fund Shares
Pricing of Fund Shares
Dividends and Distributions
Tax Consequences of Investing in the Funds

Management, Organization, and Capital
Structure
Investment Adviser
Agreement with Friedman Billings
Ramsey Group, Inc.

Financial Highlights
Maryland Tax-Free Portfolio
Virginia Tax-Free Portfolio

<PAGE>

RISK and RETURN SUMMARY
Investments, Risks, and Performance

Maryland Tax-Free Portfolio

Fund Investment Objective
The Maryland Tax-Free Portfolio seeks to provide investors with
income derived from investments exempt from federal and Maryland
state and local income taxes, including the individual alternative
minimum tax.

Principal Fund Investment Strategy
In attempting to achieve this objective, the Fund invests
principally in long-term, investment grade tax-exempt securities
issued by the State of Maryland, its political subdivisions and
other issuers exempt from Maryland state income tax.

Principal Risks of Investing in the Fund
Because the Fund is non-diversified, investing solely in securities
issued by the State of Maryland and its political subdivisions, the
Fund's performance may be affected by Maryland state and local
economic conditions and political developments, as well as the
ability of issuers to meet their obligations. Moreover, because
the Fund invests in debt securities, it is effected by changing
interest rates. During a period of falling interest rates, it is
likely that debt securities will be prepaid, or "called", prior to
maturity, requiring the proceeds to be invested at a generally
lower interest rate. Moreover, the decline in bond prices that
usually accompanies an interest rate increase can effect the Fund.
Longer maturity bonds generally suffer greater declines than those
with shorter maturities.

Virginia Tax-Free Portfolio

Fund Investment Objective
The Virginia Tax-Free Portfolio seeks to provide investors with
income derived from investments exempt from federal and Virginia
state and local income taxes, including the individual alternative
minimum tax.

Principal Fund Investment Strategy
In attempting to achieve this objective, the Fund invests
principally in long-term, investment grade tax-exempt securities
issued by the Commonwealth of Virginia, its political subdivisions
and other issuers exempt from Virginia state income tax.

Principal Risks of Investing in the Fund
Because the Fund is non-diversified, investing solely in securities
issued by the Commonwealth of Virginia and its political
subdivisions, the Fund's performance may be affected by Virginia
state and local economic conditions and political developments, as
well as the ability of issuers to meet their obligations.
Moreover, because the Fund invests in debt securities, it is
effected by changing interest rates. During a period of falling
interest rates, it is likely that debt securities will be prepaid,
or "called", prior to maturity, requiring the proceeds to be
invested at a generally lower interest rate. Moreover, the decline
in bond prices that usually accompanies an interest rate increase
can effect the Fund. Longer maturity bonds generally suffer
greater declines than those with shorter maturities.

Loss of money is a risk of investing in the Maryland and Virginia Tax-
Free Portfolios. An investment in the Funds is not a deposit of any
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

Risk/Return Bar Chart and Table
The chart and table below shows the annual calendar-year returns and
the performance of the Funds for the ten year period ended December
31, 1999. The Funds commenced operations on September 9, 1983, and
have a fiscal year-end of December 31. The information in the chart
and the table provides some indication of the risks of investing in
the Funds by showing changes in the Funds' performance from year to
year.

<PAGE>

The chart and the table below assume the reinvestment of dividends and
distributions. Please keep in mind that how the Funds have performed
in the past does not necessarily indicate how the Funds will perform
in the future.

1989 6.68% 7.95%
1990 2.89% 4.42%
1991 10.24% 10.85%
1992 8.00% 7.98%
1993 11.91% 11.80%
1994 - 5.24% - 5.02%
1995 14.35% 14.92%
1996 3.21% 2.91%
1997 7.85% 8.45%
1998 5.90% 5.64%
1999 - 1.63% - 3.75%

Maryland Tax-Free Portfolio

Best Quarter: 5.86% 1st Qtr of 1995

Worst Quarter: (5.11)% 1st Qtr of 1994

The Fund's year-to-date total return as of March 31, 1999 was 1.89%.

Virginia Tax-Free Portfolio

Best Quarter: 5.85% 1st Qtr of 1995

Worst Quarter: (4.71)% 1st Qtr of 1994

The Fund's year-to-date total return as of March 31, 1999 was 2.75%.

Performance Table
Average Annual Total Returns
(for Periods Ended December 31, 1999)

Maryland Virginia Lehman Brothers
Tax-Free Tax-Free Municipal Bond
Portfolio Portfolio Index

One Year (1.63) % (3.75)% (2.06)%
Five Years 5.80 % 5.45 % 6.90 %
Ten Years 5.58 % 5.64 % 6.89 %

<PAGE>

FEES and EXPENSES

This tables describes the fees and expenses that you may pay if you
buy and hold shares of the Funds. The following expenses are deducted
from Fund assets.

Maryland Virginia
Portfolio Portfolio
Annual Fund Operating Expenses

Management Fees 0.625% 0.625%
Other Expenses 0.300% 0.300%
------ ------
Total Annual Fund Operating Expenses 0.925% 0.925%
====== ======

If your monthly account balance averages less than $500 due to
redemptions you may be charged a $5 fee.

Example

This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Funds for the time
periods indicated below and then redeem all of your shares at the end
of those periods. The Example also assumes that your investment has a
5% return each year, that all dividends are reinvested, and that the
Funds' operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would
be:

1 Year 3 Years 5 Years 10 Years
Maryland Portfolio $94 $295 $512 $1,137
Virginia Portfolio $94 $295 $512 $1,137

INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES, and RELATED RISKS

Maryland Tax-Free Portfolio

Principal and Other Investment Strategies
In managing its portfolio, the Fund considers economic conditions
and interest rate trends in determining what securities to
purchase. The Fund seeks to achieve its investment objective by
investing at least 80% of its net assets under normal conditions
in securities issued by the State of Maryland, its political
subdivisions, agencies and instrumentalities exempt from Maryland
state income tax. The Fund will generally invest in long-term
investment grade securities (i.e., securities rated in the top
four rating categories established by nationally recognized rating
organizations), and may also invest in either general obligation
or revenue bonds. The average portfolio maturity will ordinarily

<PAGE>

exceed ten years; however, when, in the opinion of the Adviser, it
is in the best interest of shareholders, the average maturity may
be reduced to less than ten years. The Fund may also purchase,
without limitation, unrated municipal securities if, in the
opinion of the Adviser, they are of an investment quality
comparable to that of rated securities eligible for purchase by
the Fund. Additionally, the Fund may purchase securities that are
rated below investment grade; such purchases will be limited to 5%
of net assets.

Although the Fund seeks to invest its net assets in securities
described in the preceding paragraph, market conditions may
occasionally limit the availability of such obligations. During
such periods, the Fund will seek to invest in municipal
obligations, the interest on which may be subject to personal
income taxes in your state of residence. Also, as a temporary
defensive measure or to provide liquidity, the Fund may hold up to
30% of its total assets in obligations issued or guaranteed by the
U.S. government, its agencies or government sponsored enterprises
or repurchase agreements secured by such securities. Income from
such securities may be taxable for federal and state income tax
purposes. (Please note that the Fund has never invested in
repurchase agreements and has no intentions of doing so.)
Additionally, the Fund may invest up to 20% of its net assets in
securities that are subject to the alternative minimum tax.

The Fund may also purchase new issues of municipal securities on a
"when issued" basis; that is, at the time of the purchase
commitment, both the interest and principal amount are fixed and
payment and delivery of the securities normally occurs in 15 to 45
days. The Fund intends to enter into purchase orders for "when-
issued" securities with the intention of actually taking delivery
of such securities, but it may sell "when-issued" securities prior
to delivery if it is deemed advisable as a matter of investment
strategy. The Fund does not intend to invest more than 25% of its
net assets in these securities.

The Fund may also purchase certain tax-exempt municipal
obligations which have a variable rate of interest. Such
obligations bear interest at rates which vary with changes in
specific market rates or indices, such as a bank prime rate.
Investment in these securities will be made only if the Fund may
redeem them on demand within seven days.

Risks of Investing in the Fund
Since the Fund intends to invest only in the securities of the
State of Maryland, the Fund may be affected by state and local
economic conditions and political developments, and may be subject
to greater market or credit risk than if the securities purchased
by the Fund were more geographically diversified. Furthermore, as
a debt security, municipal securities are effected by changing
interest rates. During a period of falling interest rates, it is
likely that debt securities will be prepaid, or "called", prior to
maturity, requiring the proceeds to be invested at a generally
lower interest rate.

During the period between the purchase commitment of a "when
issued" security and actual delivery, no interest accrues to the
purchaser and the market value of the security may fluctuate
(although the Fund intends to take immediate delivery of these
securities upon purchase).

Virginia Tax-Free Portfolio

Principal and Other Investment Strategies
In managing its portfolio, the Fund considers economic conditions
and interest rate trends in determining what securities to
purchase. The Fund seeks to achieve its investment objective by
investing at least 80% of its net assets under normal conditions
in securities issued by the Commonwealth of Virginia, its
political subdivisions, agencies and instrumentalities and other
issuers exempt from Virginia state income tax. The Fund will
generally invest in long-term investment grade securities (i.e.,
securities rated in the top four rating categories established by

<PAGE>

nationally recognized rating organizations), and may also invest
in either general obligation or revenue bonds. The average
portfolio maturity will ordinarily exceed ten years; however,
when, in the opinion of the Adviser, it is in the best interest of
shareholders, the average maturity may be reduced to less than ten
years. The Fund may also purchase, without limitation, unrated
municipal securities if, in the opinion of the Adviser, they are
of an investment quality comparable to that of rated securities
eligible for purchase by the Fund. Additionally, the Fund may
purchase securities that are rated below investment grade; such
purchases will be limited to 5% of net assets.

The Fund may also purchase new issues of municipal securities on a
"when issued" basis; that is, at the time of the purchase
commitment, both the interest and principal amount are fixed and
payment and delivery of the securities normally occurs in 15 to 45
days. The Fund intends to enter into purchase orders for "when-
issued" securities with the intention of actually taking delivery
of such securities, but it may sell "when-issued" securities prior
to delivery if it is deemed advisable as a matter of investment
strategy. The Fund does not intend to invest more than 25% of its
net assets in these securities.

Risks of Investing in the Fund
Since the Fund intends to invest only in the securities of the
Commonwealth of Virginia, the Fund may be affected by state and
local economic conditions and political developments, and may be
subject to greater market or credit risk than if the securities
purchased by the Fund were more geographically diversified.
Furthermore, as a debt security, municipal securities are effected
by changing interest rates. During a period of falling interest
rates, it is likely that debt securities will be prepaid, or
"called", prior to maturity, requiring the proceeds to be invested
at a generally lower interest rate.

During the period between the purchase commitment of a "when
issued" security and actual delivery, no interest accrues to the
purchaser and the market value of the security may fluctuate
(although the Fund intends to take immediate delivery of these
securities upon purchase).

MANAGEMENT'S DISCUSSION of FUND PERFORMANCE

Tax-Free Virginia portfolio's net investment income for the year
averaged 4.51%, up from 4.48% last year. The weighted average maturity
of the portfolio at year-end was 14.7 years. Tax-Free Maryland
portfolio's net investment income for the year averaged 4.59%, up from
4.58% last year. The weighted average maturity of the portfolio at
year-end was 13.2 years. In 1999 interest rates remained fairly
stable during the first half of the year, however, the second half of
the year saw rising interest rates increase in all sectors of the debt
markets. This year, the U.S. economy should continue to prosper and
causing the Federal Reserve to continue to try to subdue the growth of
the economy to prevent it from overheating. The effect on short-term
and long-term interest rates should be minimal if the Federal Reserve
is successful in its policy of gradual restraint. Another restraint on
rising interest rates is the continuing federal and state budget
surpluses. Furthermore, the announced pay-down and buy-back of
outstanding U.S. Treasury debt will have a lowering effect on interest
rates in all sectors of the debt markets.

<PAGE>

Performance Comparison
Assuming a $10,000 initial investment, the following graph compares
each Fund's total return to the performance of the Lehman Brothers
Municipal Bond Index for the 10 years ended December 31, 1999. Please
remember that past performance does not necessarily reflect how the
Funds may perform in the future.

Account Value Total Lehman Brothers Virginia Tax-Free Maryland Tax-Free
Return (as of) Muni Bond Index Portfolio Portfolio

12/31/89 $10,000 $10,000 $10,000
12/31/90 $10,729 $10,442 $10,289
12/31/91 $12,032 $11,575 $11,343
12/31/92 $13,091 $12,499 $12,250
12/31/93 $14,700 $13,973 $13,709
12/31/94 $13,940 $13,272 $12,991
12/31/95 $16,373 $15,252 $14,855
12/31/96 $17,098 $15,696 $15,332
12/31/97 $18,670 $17,022 $16,535
12/31/98 $19,879 $17,982 $17,511
12/31/99 $19,470 $17,308 $17,225

Average Annual Total Returns as of December 31, 1999

Maryland Virginia Lehman Brothers
Tax-Free Tax-Free Municipal Bond
Portfolio Portfolio Index
One Year (1.63)% (3.75)% (2.06)%
Five Years 5.80 % 5.45 % 6.90 %
Ten Years 5.58 % 5.64 % 6.89 %

SHAREHOLDER INFORMATION

How to Invest In The Funds

Facts To Know Before You Invest:
- The minimum initial investment is $2,500
- There are no minimum amounts for subsequent investments
- There are no sales charges
- The Funds reserve the right to reject any purchase order
- All shares are electronically recorded; the Funds will not issue
certificates
- A $10 fee may be charged for items returned for insufficient or
uncollectible funds
- The securities market, in which the Funds buy and sell their
securities, usually requires settlement in Federal funds for all
transactions. Payments received by bank wire can be converted
immediately into Federal funds and will begin earning dividends the
same day provided the order was received prior to 4:00 P.M., Eastern
time. Payment for the purchase of each Fund's shares not received in
the form of Federal funds (i.e., by check) will normally begin earning
dividends within two business days.

<PAGE>

Purchasing Shares:

By Mail
Complete an application, specifically noting which Fund into which
you are investing, and make a check payable to "Fund for Tax-Free
Investors, Inc." Send your completed and signed application and
check drawn on a U.S. bank to:

Fund for Tax-Free Investors, Inc.
4922 Fairmont Avenue
Bethesda, Maryland 208l4

Rushmore Trust and Savings, FSB
Bethesda, Maryland
Routing # 0550-71084

Specify the Fund name, your account number (if assigned), and the
name(s) in which the account is registered.

After instructing your bank to transfer Federal funds, you must
telephone Shareholder Services at (800) 622-1386 or (301) 657-1510
between 8:30 A.M. and 4:00 P.M. Eastern time and tell us the amount
you transferred and the name of the bank sending the transfer.
Your bank may charge a fee for its services. Remember that it is
important to complete the wire transfer before 4:00 P.M. Eastern
time.

Invest Through Brokers
You may also invest in the Fund by purchasing shares through
registered broker-dealers, banks or other financial institutions
that purchase securities for their customers. When an authorized
third party, such as those mentioned, accepts an order, the Fund
will be deemed to have received the order. Orders accepted by an
authorized third party will be priced at the Fund's net asset value
next computed after acceptance. Such third parties who process
orders may charge a fee for their services. Certain third party
organizations may receive compensation from the Fund, the Fund's
transfer agent, or the Fund's Adviser for the shareholder services
they provide.

How To Redeem Your Investment

Redeeming Shares:

By Telephone
Contact Shareholder Services at 1-800-622-1386
between the hours of 8:30 A.M. and 4:30 P.M., Eastern time

By Mail or Fax

Mail your instructions for Fax your instructions for
redemption to: redemption to:

Rushmore Trust and Savings, FSB (301) 657-1520
4922 Fairmont Avenue Attn: Shareholder Services
Bethesda, MD 20814
Attn: Shareholder Services

<PAGE>

Additional Information You Should Know When You Redeem:

- There are no fees charged for redemptions.

- If your monthly account balance averages less than $500 due to
redemptions you may be charged a $5 fee. The fee will not be imposed
on accounts established under the Uniform Gifts or Transfers to Minors
Acts. Additionally, we reserve the right to involuntarily redeem
accounts which fall below $500 after providing 60 days written notice.

ADDITIONAL INFORMATION ABOUT THE FUND

Exchanging Fund Shares
You may exchange shares of the Funds, without cost, for shares of any
of the following Rushmore Funds: Fund for Government Investors,
American Gas Index Fund, U.S. Government Bond Portfolio, or the Tax-
Free Money Market Portfolio. You may also exchange shares of the
Funds for shares of the Cappiello-Rushmore Emerging Growth, Growth and
Utility Income Funds. The fund you are exchanging into must be
available for sale in your state and the registration for both
accounts must be identical. You should obtain a current prospectus
for the fund into which you are exchanging by calling 1-800-343-3355.
Exchanges will be effected at the respective net asset values of the
Funds involved as next determined after receipt of the exchange
request. The Maryland and Virginia Portfolios may change or cancel
their exchange policies at any time, upon 60 days' notice to
shareholders.

<PAGE>

Pricing of Fund Shares
The price of a fund's shares on any given day is its net asset value
per share. This figure is computed by adding the appraised value of
all securities and all other assets, deducting liabilities and
dividing by the number of shares outstanding. The net asset value per
share of the Funds is determined as of 4:00 P.M. Eastern time on days
when the New York Stock Exchange and the bond markets are open for
trading.

The securities of each Fund will be valued on the basis of the mid-
point of quoted bid and ask prices when market quotations are
available. In the absence of readily available market quotations,
securities will be valued in good faith based on fair value as
determined by the Board of Directors. In determining fair market
value, prices are supplied by an independent pricing service.

Dividends and Distributions
Dividends of the Funds are declared each day the Funds are open for
business and paid monthly. Capital gains, if any, will be distributed
on an annual basis usually in November of December. Fund
distributions will automatically be reinvested in additional shares
(including fractional shares where necessary) unless you elect to
receive them in cash. Distributions paid in cash to those investors so
electing will be mailed on the second business day of the following
month. Account statements showing dividends paid will be mailed to
shareholders monthly.

Dividends reflect daily net income, which generally consists of
accrued interest and accretion of discount less amortization of
premium and expenses of the Fund.

"Undeliverable" or "Uncashed" Dividend Checks
If you elect to receive dividends and distributions in cash and the
payment (1) is returned and marked as "undeliverable" or (2)
remains uncashed for six months, your cash election will be changed
automatically and future dividends will be reinvested in the
applicable Fund at the per share net asset value determined as of
the date of payment (normally $1.00). In addition, any
undeliverable checks or checks that remain uncashed for six months
will be canceled and then reinvested in the applicable Fund at the
per share net asset value determined as of the date of cancellation
(normally $1.00).

Tax Consequences of Investing

Taxability of Distributions
As long as the Funds meets the requirements for being tax-qualified
regulated investment company, which the Funds intend to do, the
Funds pays no federal income tax on the earnings distributed to
shareholders. As a result, dividends from net income paid by the
Fund, whether reinvested or taken as cash, are considered tax
exempt. However, any short- or long-term capital gains paid by the
Fund would be considered taxable and would be reported in detail on
IRS Form 1099-DIV, mailed in January. As always, we encourage you
to verify your tax liability with your tax professional.

Taxability of Transactions
Any time you sell or exchange shares of the Funds, it is considered
a taxable event for you. For example, if you exchange shares of
the Maryland Tax-Free Portfolio for shares of another Rushmore or
Cappiello-Rushmore fund, the transaction would be treated as a
sale. Consequently, any gain resulting from the transaction would
be subject to federal income tax.

<PAGE>

MANAGEMENT, ORGANIZATION and CAPITAL STRUCTURE

Investment Adviser
Money Management Associates ("Adviser"), 100 Lakeshore Drive, Suite
1555, North Palm Beach, Florida 33408, has served as the Funds'
investment adviser since the Funds' commenced operations on September
9, 1983. Established in 1974, the Adviser manages six no-load mutual
funds (including the Funds) with total assets under management of
approximately $900 million.

Subject to the general supervision of the Funds' Board of Directors,
the Adviser manages the investment and reinvestment of the assets of
the Funds and is responsible for the overall management of the Funds'
business affairs. An Adviser Group makes investment decisions;
therefore, no one person is primarily responsible for making
investment decisions. For the advisory services performed, the
Adviser received 0.625% of the average net assets of both the Maryland
and Virginia Portfolios for the fiscal years ended December 31, 1999.

<PAGE>

FINANCIAL HIGHLIGHTS
Rushmore Maryland Tax-Free Portfolio

The following financial highlights tables are intended to help you
understand the Funds' financial performance for the past five years.
Certain information reflects financial results for a single Fund
share. The total returns in the table represent the rate that you
would have earned (or lost) on an investment in the Funds (assuming
reinvestment of all dividends and distributions). This information has
been audited by Deloitte & Touche LLP, whose report, along with the
Funds' financial statements, is included in the annual report, which
is available upon request.

<TABLE>

For The Years Ended December 31,

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value, Beginning of Year $ 11.23 $ 11.10 $ 10.79 $ 10.98 $ 10.11
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net Investment Income 0.50 0.51 0.51 0.53 0.55
Net Realized and Unrealized Gain (Loss) on
Investments (0.68) 0.13 0.31 (0.19) 0.87
--------- --------- --------- --------- ---------
Total from Investment Operations (0.18) 0.64 0.82 0.34 1.42
--------- --------- --------- --------- ---------
Distributions to Shareholders:
Dividends (from net investment income) (0.50) (0.51) (0.51) (0.53) (0.55)
--------- --------- --------- --------- ---------
Total Distributions to Shareholders (0.50) (0.51) (0.51) (0.53) (0.55)
--------- --------- --------- --------- ---------
Net Asset Value, End of Year $ 10.55 $ 11.23 $ 11.10 $ 10.79 $ 10.98
========= ========= ========= ========= =========
Total Investment Return (1.63)% 5.90% 7.85% 3.21% 14.35%
Ratios and Supplemental Data:
Net Assets at End of Year (in thousands) $ 42,132 $ 45,827 $ 45,344 $ 44,410 $ 49,725
Ratio of Expenses to Average Net Assets 0.93% 0.93% 0.93% 0.93% 0.77%
Ratio of Expenses to Average Net Assets Before
Reimbursement from Investment Adviser 0.93% 0.93% 0.93% 0.93% 0.93%
Ratio of Net Income to Average Net Assets 4.59% 4.58% 4.73% 4.92% 5.16%
Portfolio Turnover Rate 12% 5% 22% 31% 37%

</TABLE>

<PAGE>

FINANCIAL HIGHLIGHTS
Rushmore Virginia Tax-Free Portfolio

<TABLE>

For The Years Ended December 31,

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value, Beginning of Year $ 11.42 $ 11.46 $ 11.09 $ 11.31 $ 10.36
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net Investment Income 0.50 0.52 0.52 0.53 0.56
Net Realized and Unrealized Gain (Loss) on
Investments (0.91) 0.12 0.39 (0.22) 0.95
--------- --------- --------- --------- ---------
Total from Investment Operations (0.41) 0.64 0.91 0.31 1.51
--------- --------- --------- --------- ---------
Distributions to Shareholders:
Dividends (from net investment income) (0.50) (0.52) (0.52) (0.53) (0.56)
Distributions (from capital gains) (0.02) (0.16) (0.02) - -
--------- --------- --------- --------- ---------
Total Distributions to Shareholders (0.52) (0.68) (0.54) (0.53) (0.56)
--------- --------- --------- --------- ---------
Net Asset Value, End of Year $ 10.49 $ 11.42 $ 11.46 $ 11.09 $ 11.31
Total Investment Return (3.75)% 5.64% 8.45% 2.91% 14.92%
Ratios and Supplemental Data:
Net Assets at End of Year (in thousands) $28,926 $34,543 $32,907 $32,355 $ 33,468
Ratio of Expenses to Average Net Assets 0.93% 0.93% 0.93% 0.93% 0.77%
Ratio of Expenses to Average Net Assets Before
Reimbursement from Investment Adviser 0.93% 0.93% 0.93% 0.93% 0.93%
Ratio of Net Income to Average Net Assets 4.51% 4.48% 4.70% 4.84% 5.17%
Portfolio Turnover Rate 26% 25% 27% 46% 55%

</TABLE>

<PAGE>

In addition to this prospectus, the following information is available
to assist you in making an investment decision:

Information Available Upon Request Description

Statement of Additional Information A document that includes additional
information about the Funds.

Annual and Semiannual Reports Reports that contain information about
the Funds' investments. The reports
also discuss the market conditions and
investment strategies that significantly
affected the Funds' performance during
its last fiscal year.

There are a variety of ways to receive the above information and make
other inquiries of the Funds. You may contact the Funds directly by
telephone at 1-800-622-1386, visit our internet site at
http://www.rushmorefunds.com, or you may send a written request to the
Funds' offices at 4922 Fairmont Avenue, Bethesda, Maryland 20814.
Additional information about the Funds can also be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in
Washington D.C. (for hours of operation please call the Commission at
1-800-SEC-0330). You may also obtain copies of the information by
visiting the Commission's internet site at http://www.sec.gov, or,
upon payment of a duplicating fee, by writing the Public Reference
Section of the Commission at 450 Fifth Street, N.W. Washington, D.C.
20549.

Fund for Tax-Free Investors, Inc. Investment Company Act File No. 811-3720

<PAGE>

PART B

<PAGE>

FUND for TAX-FREE INVESTORS, INC.
4922 Fairmont Avenue, Bethesda, Maryland 20814
(800) 622-1386
(301) 657-1510

Rushmore Tax-Free Money Market Portfolio
Rushmore Maryland Tax-Free Portfolio
Rushmore Virginia Tax-Free Portfolio

Statement of Additional Information
May 1, 2000

This Statement of Additional Information is not a Prospectus. It
should be read in conjunction with the Funds' Prospectuses, dated May
1, 2000. A copy of the Funds' Prospectuses may be obtained without
charge by writing or telephoning the Fund at the above address or
telephone numbers.

The audited financial statements of the Funds, for the Funds' fiscal
year ended December 31, 1999, are included in the Funds' 1999 Annual
Report to Shareholders, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. Copies
of the Funds' 1999 Annual Report are available, without charge, by
request by writing or telephoning the Funds at the above address or
telephone numbers.

<PAGE>

Table of Contents

<TABLE>

Page in Page in
Statement Maryland and
of Virginia Tax- Page in Tax-Free
Additional Free Portfolios Money Market
Information Prospectus Prospectus
----------- ---------------- -----------------
<S> <S> <S> <S>
Fund Description, Investments, and Risks
Investment Limitations - -
Management of the Fund
Control Persons and Principal Holders of Securities - -
Investment Advisory and Other Services
Brokerage Allocation and Portfolio Transactions - -
Taxation of the Fund - -
Calculation of Performance Data - -
Financial Statements

</TABLE>

<PAGE>

FUND DESCRIPTION, INVESTMENTS and RISKS

Description

The Fund for Tax-Free Investors, Inc. (the "Fund") is an open-end
management investment company incorporated in the State of Maryland on
April 8, 1983. The following are the investment strategies and risks
associated with investing in the Rushmore Tax-Free Money Market
Portfolio ("Money Market Portfolio"), the Rushmore Maryland Tax-Free
Portfolio ("Maryland Portfolio"), and the Virginia Tax-Free Portfolio
("Virginia Portfolio") (collectively, the "Funds").

Investments

The Funds' principal investment strategies are detailed in each Fund's
prospectus. The following paragraphs detail the Fund's investment
limitations. These restrictions, which apply to each Portfolio, may
not be changed without prior approval of a majority of holders of the
Fund's outstanding voting shares. As defined in the Investment
Company Act of 1940, the term "majority" means the vote of the lesser
of (a) 67% of the shares of the Fund at a meeting where more than 50%
of the outstanding shares are present in person or by proxy; or (b)
more than 50% of the outstanding shares of the Fund.

1. The Fund may not borrow money, except that as a temporary measure
the Fund may borrow money to facilitate redemptions. Such a
borrowing may be in an amount not to exceed 30% of the Fund's total
assets, taken at current value, before such borrowing. The Fund
may not purchase a portfolio security if a borrowing by the Fund is
outstanding.

2. The Fund may not make short sales of securities or purchase any
securities on margin, except for such short-term credits as are
necessary for the clearance of transactions. The Fund may not
enter into put or call options except in connection with stand-by
commitments.

3. The Fund may not make loans except through repurchase agreements.
(See "Investment Objectives, Principal Investment Strategies, and
Related Risks.")

4. The Fund may not underwrite securities of any other issuer.

5. The Fund may not purchase or sell real estate; however, the Fund may
invest in municipal obligations secured by real estate or interests
therein.

6. The Fund may not purchase or sell restricted securities, commodities
or commodity contracts, nor may it issue senior securities.

7. The Fund may not purchase securities of any issuer if, as a result
of such a purchase, more than 25% of the Fund's total assets would be
invested in any one industry. There is no limitation, however, as to
investments in municipal obligations issued or guaranteed by the
United States Government, its agencies or government sponsored
enterprises, or in obligations of the United States Government, its
agencies or government sponsored enterprises, which are purchased on a
temporary basis in accordance with each Fund's investment objective
and policies.

8. The Funds will invest 80% of the value of their respective net assets
in tax-exempt securities.

<PAGE>

MANAGEMENT OF THE FUND

A Board of Directors governs the Fund. The Directors are responsible
for overseeing the management of the Fund's business affairs and play
a vital role in protecting the interests of Fund shareholders. Among
other things, the Directors approve and review the Fund's contracts
and other arrangements and monitor Fund performance and operations.
The names, ages and addresses of the Directors and officers of the
Fund, together with information as to their principal business
occupations during the past five years are set forth below.

Name, Age, Address Position Held Principal Occupation(s)
With Fund During Past 5 Years

<S> <S> <S>
Daniel L. O'Connor* **, 57 Chairman, General Partner of Money Management Associates,
100 Lakeshore Drive Treasurer, registered investment adviser of the Rushmore
Suite 1555 and Director Funds, since 1974. Director, Rushmore Trust and
North Palm Beach, FL 33408 Savings, FSB, the Fund's transfer agent and
custodian. Director of four Rushmore Fund
Boards. Director of the Cappiello-Rushmore
Trust.

Richard J. Garvey*, 65 President and Limited Partner of Money Management Associates
730 Southwest 67th Place Director and Vice President of Rushmore Services, Inc.
Portland, OR 97225 until 1998. Director of four Rushmore Fund
Boards.

Martin M. O'Connor* **, Vice President Limited Partner of MMA since 1975. Vice
1910 South Ocean Blvd., #134 President, Rushmore Services, Inc. until 1999.
Del Ray Beach, FL 33487 Vice President of three Rushmore Funds.

John R. Cralle*, Vice President Limited Partner of MMA since 19--. Vice
396-F Goldview Road President, Rushmore Services, Inc. until 1999.
North Palm Beach, FL 33408 Vice President of three Rushmore Funds.

Bruce C. Ellis,** 55 Director A private investor in start-up companies. Vice
7108 Heathwood Court President, LottoPhone, Inc., a telephone state
Bethesda, MD 20817 lottery service, September 1991-1995. Director,
The Torray Fund, since 1994; Director, the
Sheppard Fund, Since 1994. Director on three
Rushmore Fund Boards and the Cappiello-Rushmore
Trust.

Jeffrey R. Ellis,** 55 Director President, Innovative LLC., a manufacturing-
513 Kerry Lane marketing company in Virginia Beach, Virginia
Virginia Beach, VA 23451 since January 1999. Vice President, LottoPhone,
Inc., a telephone state lottery service,
September 1993-1995. Private Investor prior
thereto. Director on three Rushmore Fund Boards
and the Cappiello-Rushmore Trust.

Michael D. Lange, *58 Director Vice President, Capital Hill Management
Post Office Box 1348 Corporation since 1967. Owner of Michael D.
Great Falls, VA 22066 Lange, Ltd., a builder and developer since 1980.
Partner of Greatful Falls, a building developer
since 1994. Director, Rushmore Trust and Savings,
FSB, the Trust's transfer agent and custodian.
Director of three Rushmore Fund Boards.

Patrick F. Noonan, 57 Director Chairman and Chief Executive Officer of the
11901 Glen Mill Drive Conservation Fund since 1985, a national non-
Potomac, MD 20854 profit environmental organization. Director of
four Rushmore Fund Boards.

Leo Seybold, 86 Director Retired 1988. Director of three Rushmore Fund
5804 Rockmere Drive Boards.
Bethesda, MD 20816

</TABLE>

<PAGE>

<TABLE>

<S> <S> <S>
Edward J. Karpowicz, CPA*, 37 Controller Vice President of Rushmore Trust and Savings,
4922 Fairmont Avenue FSB, since 1997. Controller of the Funds.
Bethesda, MD 20814 Treasurer, Bankers Finance Investment Management
Corp., August 1993 to June 1997. Senior
Accountant, Ernst & Young, September 1989 to
February 1993.

Stephenie E. Adams*, 31 Secretary Secretary of three Rushmore Funds and the
4922 Fairmont Avenue Cappiello-Rushmore Trust. Assistant Secretary of
Bethesda, MD 20814 one Rushmore Fund. Manager, Rushmore Trust and
Savings, FSB, October 1999 to present. Manager,
Fund Administration and Marketing, Rushmore
Services, Inc., July 1994-October 1999.

</TABLE>

* Indicates an "interested" person. An interested person has any
one of several close business or family ties to the Fund, the
Fund's investment adviser, or an affiliated company of the Fund.

** Daniel L. O'Connor and Martin M. O'Connor are brothers. Bruce C.
Ellis and Jeffrey R. Ellis are brothers.

The aggregate compensation paid to the Directors serving during the
fiscal year ended December 31, 1999, is set forth in the table below:

<TABLE>

Total Compensation
Pension or Estimated Paid to Directors
Aggregate Retirement Annual for Services to
Name of Person Compensation Benefits Benefits Upon the Fund and Fund
and Position Paid Accrued Retirement Complex

<S> <C> <C> <C> <C>
Daniel L. O'Connor,*
Chairman, Treasurer and $0 $0 $0 $0
Director

Richard J. Garvey,*
President and Director $0 $0 $0 $0
Bruce C. Ellis,
Director $3,000 $0 $0 $9,000

Jeffrey R. Ellis,
Director $3,000 $0 $0 $9,000

Michael D. Lange,*
Director $3,000 $0 $0 $9,000

Patrick F. Noonan,
Director $3,000 $0 $0 $10,000

Leo Seybold,
Director $3,000 $0 $0 $9,000

</TABLE>

* Indicates an "interested" person. An interested person has any one
of several close business or family ties to the Fund, the Fund's
adviser, or an affiliated company of the Fund.

<PAGE>

CONTROL PERSONS and PRINCIPAL HOLDERS of SECURITIES

As of March 29, 2000, the following parties were the only owners of
record owning 5% or more of the shares of the Fund.

Portfolio Controlling Party or Shares % Owned
Principal Holder of Outstanding
Securities
Address
<S> <S> <C> <C>
Tax-Free Money Market Portfolio Eugene R. Elrod 1,094,404.51 6.450% 1/
4300 Hawthorne Street, N.W.
Washington, D.C. 20016-3571

Wendie L. Wachtel 875,846.32 5.162% 1/
1101 14th Street, N.W.
Washington, D.C. 20005-5601

Virginia Tax-Free Portfolio Charles Schwab & Co., Inc. 265,588.59 9.946% 2/
101 California Street
San Francisco, CA 94101

Roger W. Jones 254,973.04 9.548% 1/
Post Office Box 248
Sperryville, VA 22740

Robert P. and Maryann Nirschl 175,750.17 6.582% 1/
4143 North River Street
McLean, VA 22101

Maryland Tax-Free Portfolio Charles Schwab & Co., Inc. 188,242.00 5.027% 2/
101 California Street
San Francisco, CA 94101

1/ Beneficial owner only.
2/ Record owner only.

</TABLE>

As of March 29, 2000, the Directors and officers of the Fund, as a
group, owned less than one percent of the outstanding shares of any
Portfolio, or the Fund in the aggregate, except Leo Seybold who owned
90,490.382 shares of the Maryland Tax-Free Portfolio, or 2.4%, as of
March 29, 2000.

INVESTMENT ADVISORY and OTHER SERVICES

Investment Adviser
Money Management Associates (the "Adviser"), 100 Lakeshore Drive,
Suite 1555, North Palm Beach, Florida 33408, has served as the Fund's
investment adviser since the Fund commenced operations on September 9,
1983. The Adviser provides investment advice to the Fund and oversees
its day-to-day operations, subject to direction and control by the
Fund's Board of Directors. For its services, the Adviser receives a

<PAGE>

fee at an annual rate based on 0.50% of the net assets of the Money
Market Portfolio, 0.625% of the net assets of the Maryland Portfolio,
and 0.625% of the net assets of the Virginia Portfolio. For the fiscal
years ended December 31, 1999, 1998, and 1997, the Funds paid the
following investment advisory fees to the Adviser:

1999 1998 1997

Tax-Free Money Market Portfolio $ 91,951 $ 92,105 $ 99,510
Maryland Tax-Free Portfolio $ 284,560 $ 288,928 $ 283,756
Virginia Tax-Free Portfolio $ 206,583 $ 204,458 $ 202,010

The Adviser also advises: Fund for Government Investors, a money
market fund established in 1975 that invests only in U.S. Treasury
securities; The Rushmore Fund, Inc., which was established in 1985 and
currently consists of one series, the U.S. Government Bond Portfolio;
and American Gas Index Fund, Inc., a common stock index fund
established in 1989 that seeks to provide investment results that
correlate to those of an index comprising the common stocks of natural
gas distribution and transmission company members of the American Gas
Association. As of December 31, 1999, total assets under the
Adviser's management were approximately $900 million.

Fund expenses which are paid by the Adviser include, but are not
limited to: the expenses of shareholders and directors meetings, the
cost of office space, and the preparation, filing, printing and
distribution of the Fund's prospectus and Statement of Additional
Information. Additionally, the Adviser may, from its own resources,
including profits from advisory fees received from the Fund provided
such fees are legitimate and not excessive, make payments to broker-
dealers and other financial institutions for their expenses in
connection with the distribution of Fund shares.

Administrator
Under an Administrative Services Agreement between the Fund and
Rushmore Trust and Savings, FSB ("RTS"), 4922 Fairmont Avenue,
Bethesda, Maryland 20814, a majority-owned subsidiary of the Adviser,
RTS provides transfer agency, dividend-disbursing, fund accounting and
administrative services to the Fund. Under the Administrative
Services Agreement with RTS, which has been approved by the Board of
Directors, RTS receives an annual fee of 0.25% of average daily net
assets for the Money Market Portfolio and 0.30% of average daily net
assets for the Rushmore Maryland Tax-Free and Rushmore Virginia Tax-
Free Portfolios for the services it provides. For the fiscal years
ended December 31, 1999, 1998, and 1997, the Fund paid the following
administrative services fees to the RTS:

1999 1998 1997

Tax-Free Money Market Portfolio $ 45,976 $ 46,053 $ 49,755
Maryland Tax-Free Portfolio $ 136,589 $ 138,690 $ 136,203
Virginia Tax-Free Portfolio $ 99,192 $ 98,140 $ 96,964

As the Administrator, RTS is responsible for all costs of the Fund
except for the investment advisory fee, extraordinary legal expenses,
interest and the expenses paid by the Adviser. Specifically, RTS pays
costs of registration of the Funds' shares with the Securities and
Exchanges commission and the various states, all expenses of dividend
and transfer agent services, outside auditing and legal fees,
preparation of shareholders reports, and all costs incurred in
providing custodial services.

Custodian and Independent Public Accountant
RTS is the Fund's custodian and is responsible for safeguarding and
controlling the Fund's cash and securities, handling the securities,
and collecting interest on the Fund's investments.

Independent certified public accountants, Deloitte & Touche LLP, 116-
300 Village Blvd., Princeton, New Jersey 08540, are responsible for
auditing the annual financial statements of the Fund.

Brokerage Allocation and Other Practices
The Fund's portfolio securities are normally purchased on a net basis
which does not involve payment of brokerage commissions.

<PAGE>

DRAFT REDEMPTIONS

Redemptions by check or wire transfer are discussed in the Money
Market Fund's Prospectus. Investors may also elect to redeem shares
by draft check (minimum check - $250) made payable to the order of any
person or institution. Upon the Fund's receipt of a completed
signature card, investors will be supplied with draft checks which are
drawn on the Fund's account and are paid through Rushmore Trust and
Savings, FSB. The Fund reserves the right to change or suspend the
checking service and to charge for the reorder of draft checks. These
draft checks cannot be certified, nor can these checks be negotiated
for cash at Rushmore Trust and Savings, FSB. There will be a $10
charge for each stop payment request on the draft checks. Investors
will be subject to the same rules and regulations that Rushmore Trust
and Savings, FSB applies to checking accounts. Investors' accounts
may not be closed by draft check.

TAXATION OF THE FUND

The Fund currently qualifies, and will seek to continue to qualify, as
a regulated investment company (a "RIC") under Subchapter M of the
U.S. Internal Revenue Code of 1986, as amended (the "Code"). As a RIC,
the Fund will not be subject to federal income taxes on the net
investment income and capital gains that the Fund distributes to its
shareholders. The distribution of net investment income and capital
gains by the Fund to a Fund shareholder will be taxable to the
shareholder regardless of whether the shareholder elects to receive
these distributions in cash or in additional shares. Distributions
reported to a Fund shareholder as long-term capital gains shall be
taxable as such, regardless of how long the shareholder has owned the
shares. Fund shareholders will be notified annually by the Fund as to
the federal tax status of all distributions made by the Fund.
Distributions may be subject to state and local taxes.

If the Fund fails to qualify as a RIC for any taxable year, the Fund
would be taxed in the same manner as an ordinary corporation. In that
event, the Fund would not be entitled to deduct the distributions
which the Fund had paid to shareholders and, thus, would incur a
corporate income tax liability on all of the Fund's taxable income
whether or not distributed. The imposition of corporate income taxes
on the Fund would directly reduce the return a shareholder would
receive from an investment in the Fund.

CALCULATION OF PERFORMANCE DATA

Average Annual Total Return Quotations
For purposes of quoting and comparing the performance of the Fund to
that of other mutual funds and to other relevant market indices in
advertisements or in reports to shareholders, performance may be
stated in terms of total return. Under the rules of the Securities
and Exchange Commission (the "SEC Rules"), Fund advertising stating
performance must include total return quotes calculated according to
the following formula:

n
P (1+T) = ERV

Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1-, 5-, or 10-year
periods at the end of the 1-, 5-, or 10-year periods (or
fractional portion thereof).

Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the
most recent quarter prior to submission of the advertising for
publication, and will cover 1, 5, and 10 year periods or a shorter
period dating from the effectiveness of the Registration Statement of
the Fund. In calculating the ending redeemable value, all dividends
and distributions by the Fund are assumed to have been reinvested at
net asset value as described in the Prospectus for the Fund on the
reinvestment dates during the period. Total return, or "T" in the
formula above, is computed by finding the average annual compounded
rates of return over the 1, 5, and 10 year periods (or fractional
portion thereof) that would equate the initial amount invested to the
ending redeemable value.

<PAGE>

The Fund, from time to time, also may include in such advertising a
total return figure that is not calculated according to the formula
set forth above in order to compare more accurately the performance of
the Funds with other measures of investment return. For example, in
comparing the total return of the Funds with data published by Lipper
Analytical Services, Inc., or with the performance of the Lehman
Brothers Intermediate Government and Long Treasury Bond Indexes, as
appropriate, the Funds calculate their aggregate total return for the
specified periods of time by assuming the investment of $10,000 in a
Fund's shares and assuming the reinvestment of each dividend or other
distribution at net asset value on the reinvestment date. Percentage
increases are determined by subtracting the initial value of the
investment from the ending value and by dividing the remainder by the
beginning value. Such alternative total return information will be
given no greater prominence in such advertising than the information
prescribed under SEC Rules.

The average annual compounded rates of return, assuming the
reinvestment of all dividends and distributions, for the Funds, as of
December 31, 1999, are as follows:

Tax-Free Maryland Tax- Virginia Tax-
Money Free Free Portfolio
Market Portfolio
Portfolio
One Year 2.50% (1.63)% (3.75)%
Five Years 2.79% 5.80 % 5.45 %
Ten Years 2.92% 5.58 % 5.64 %

Computation of Yield
In addition to the total return quotations discussed above, the Fund
also may advertise its yield based on a thirty-day (or one month)
period ended on the date of the most-recent balance sheet included in
the Fund's Registration Statement, computed by dividing the net
investment income per share of a fund earned during the period by the
maximum offering price per Fund share on the last day of the period,
according to the following formula:

6
YIELD = 2[(a-b/cd+1) -1]

Where: a = income earned during the period;
b = expenses accrued for the period (net of
reimbursements);
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends; and
d = the maximum offering price per share on the
last day of the period.

Under this formula, interest earned on debt obligations for purposes
of "a" above, is calculated by (i) computing the yield to maturity of
each obligation held by the Portfolio based on the market value of the
obligation (including actual accrued interest) at the close of
business on the last day of each month, or, with respect to
obligations purchased during the month, the purchase price (plus
actual accrued interest), (ii) dividing that figure by 360 and
multiplying the quotient by the market value of the obligation
(including actual accrued interest as referred to above) to determine
the interest income on the obligation that is in the Portfolio's
portfolio (assuming a month of thirty days), and (iii) computing the
total of the interest earned on all debt obligations and all dividends
accrued on all equity securities during the thirty-day or one month
period. In computing dividends accrued, dividend income is recognized
by accruing 1/360 of the stated dividend rate of a security each day
that the security is in the Portfolio's portfolio. Undeclared earned
income, computed in accordance with generally accepted accounting
principles, may be subtracted from the maximum offering price
calculation required pursuant to "d" above.

Financial Statements

Copies of the Fund's audited financial statements for the fiscal year
ended December 31, 1999, may be obtained without charge by contacting
the Fund at 4922 Fairmont Avenue, Bethesda, Maryland 20814, or by
telephoning the Fund at (800) 622-1386 or (301) 657-1500.

<PAGE>

Fund for Tax-Free Investors, Inc.

FINANCIAL STATEMENTS

ANNUAL REPORT, DECEMBER 31, 1999
FUND FOR TAX-FREE INVESTORS, INC.
4922 Fairmont Avenue, Bethesda, MD 20814
(800) 622-1386 (301) 657-1510

January 20, 2000

Dear Shareholders:

Tax-Free Money Market

Tax-Free Money Market portfolio's net investment income for the year
averaged 2.47%, down from 2.70% last year. The weighted average
maturity of the portfolio at year-end was 44 days.

Tax-Free Virginia

Tax-Free Virginia portfolio's net investment income for the year
averaged 4.51%, up from 4.48% last year. The weighted average maturity
of the portfolio at year-end was 14.7 years.

Tax-Free Maryland

Tax-Free Maryland portfolio's net investment income for the year
averaged 4.59%, up from 4.58% last year. The weighted average maturity
of the portfolio at year-end was 13.2 years. In 1999 interest rates
remained fairly stable during the first half of the year, however, the
second half of the year saw rising interest rates increase in all
sectors of the debt markets. This year, the U.S. economy should
continue to prosper and causing the Federal Reserve to continue to try
to subdue the growth of the economy to prevent it from overheating.
The effect on short-term and long-term interest rates should be
minimal if the Federal Reserve is successful in its policy of gradual
restraint. Another restraint on rising interest rates is the
continuing federal and state budget surpluses. Furthermore, the
announced pay-down and buy-back of outstanding U.S. Treasury debt will
have a lowering effect on interest rates in all sectors of the debt
markets.

Fund for Tax-Free Investors will continue to provide you with its
conservative and high-quality portfolios. We thank you for your
continued support and look forward to serving you in the year 2000.

Sincerely,

/s/ Daniel L. O'Connor /s/ Richard J. Garvey
Daniel L. O'Connor Richard J. Garvey
Chairman President

<PAGE>

FUND FOR TAX-FREE INVESTORS, INC.

STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO

December 31, 1999

Face Value
Value (Note 1)
-------- -----------

COLORADO 2.9%
Pitkin County Multi Family
Housing Floating Rate Notes
5.45%, 12/1/24+ A-1+........ $500,000 $ 500,000
-----------
FLORIDA 3.0%
Jacksonville, FL Electric
Authority Revenue
6.7%, 10/1/00^ AA........... 500,000 518,799
-----------
HAWAII 2.9%
Hawaii State General
Obligation
4.5%, 9/1/00 AAA............ 500,000 501,431
-----------
ILLINOIS 8.4%
Chicago Metropolitan Water
Capital Improvement
6.8%, 1/1/00^ AA............ 500,000 510,000
Illinois State
6%, 10/1/00 AA.............. 500,000 507,258
Illinois Student Assistance
Community Student Living
5.65%, 3/1/00 AAA........... 450,000 451,585
-----------
State Total................. 1,468,843
-----------
INDIANA 4.0%
Princeton Indiana Pollution
Control Revenue Floating Rate
Notes
5%, 4/1/22+ A-1+............ 700,000 700,000
-----------
IOWA 8.0%
Iowa Finance Authority
Hospital Facility Revenue
Floating Rate Notes
5.65%, 7/1/13+ A-1+......... 700,000 700,000
Ottumwa Regional Health Center
Floating Rate Notes
5.55%, 10/1/06+ A-1+........ 700,000 700,000
-----------
State Total................. 1,400,000
-----------
KENTUCKY 2.9%
Kentucky Economic Development
Hospital Revenue Catholic
Healthcare Floating Rate Notes
5.65%, 12/1/27+ A-1+........ 500,000 500,000
-----------
MARYLAND 11.8%
Anne Arundel County General
Obligation
6.9%, 1/15/00 AA+........... 250,000 250,337

<PAGE>

Face Value
Value (Note 1)
-------- -----------

MARYLAND (continued)
Baltimore County Revenue
Floating Rate Notes
5.5%, 1/1/16+ A-1........... $200,000 $ 200,000
Maryland State General
Obligation
5%, 10/15/00 AAA............ 305,000 307,246
Maryland Health and Higher
Education Loyola College
Issue B Floating Rate Notes
5.65%, 10/1/13+ AAA......... 600,000 600,000
Maryland Health and Higher
Education North Arundel
Hospital Floating Rate Notes
5.65%, 7/1/32+ VMIGI........ 400,000 400,000
North East Maryland Waste
Disposal Authority Floating
Rate Notes
5.05%, 1/1/08+ AAA.......... 300,000 300,000
-----------
State Total................. 2,057,583
-----------
MASSACHUSETTS 3.0%
Massachusetts State General
Obligation
5%, 6/1/00 AAA.............. 350,000 351,341
Massachusetts State Water
Resource Authority
7.5%, 4/1/00^ A+............ 170,000 174,803
-----------
State Total................. 526,144
-----------
MINNESOTA 20.4%
Hennepin County General
Obligation Floating Rate Notes
5.4%,12/1/10+ A-1+.......... 400,000 400,000
Minneapolis General Obligation
Floating Rate Notes
5.4%,12/1/05+ A-1........... 500,000 500,000
Minneapolis University Gateway
Project Series B Floating Rate
Notes
5.4%,12/1/27+ A-1........... 250,000 250,000
Minnesota State Higher
Education Floating Rate Notes
5.55%, 12/1/24+ VMIG1....... 500,000 500,000
St. Paul Housing and
Redevelopment Authority
Floating Rate Notes
5.45%, 12/1/12+ A-1+........ 700,000 700,000
St. Paul Housing and
Redevelopment Authority United
Way Project Floating Rate
Notes
5.45%, 12/1/18+ A+.......... 500,000 500,000

<PAGE>

STATEMENT OF NET ASSETS
MONEY MARKET PORTFOLIO (continued)

December 31, 1999

Face Value
Value (Note 1)
-------- -----------

MINNESOTA (continued)
Waconia Industrial Development
Revenue Floating Rate Notes
5.55%, 10/1/16+ A-1......... $715,000 $ 715,000
-----------
State Total................. 3,565,000
-----------
MONTANA 3.4%
Montana State Health Floating
Rate Notes
5.4%, 12/1/15+ AAA.......... 600,000 600,000
-----------
NEW HAMPSHIRE 4.6%
New Hampshire State Business
Finance Authority Foundation
for Seacoast Health Series A
Floating Rate Notes
5.7%, 6/1/28+ A-1........... 800,000 800,000
-----------
NEW YORK 9.1%
Nassau County Revenue
Anticipation Notes
3.75%, 3/15/00 SP-2......... 500,000 500,495
New York City General
Obligation Floating Rate Notes
5%, 8/1/15+ A-1............. 300,000 300,000
New York City General
Obligation Floating Rate Notes
5%, 8/15/18+ A-1+........... 800,000 800,000
-----------
State Total................. 1,600,495
-----------
NORTH CAROLINA 4.0%
City of Winston-Salem Floating
Rate Notes
5.65%, 4/1/00 A-1+.......... 700,000 700,000
-----------
TENNESSEE 5.7%
Knox County Health & Housing
Facilities Mercy Health System
Floating Rate Notes
5.65%, 12/1/15+ VMIG1....... 500,000 500,000
Knox County Health & Housing
Facilities Catholic Healthcare
Floating Rate Notes
5.65%, 12/01/27+ A-1+....... 500,000 500,000
-----------
State Total................. 1,000,000
-----------

<PAGE>

Face Value
Value (Note 1)
-------- -----------

TEXAS 2.3%
Port Arthur Revenue Floating
Rate Notes
5.05%, 5/1/03+ PRIM1........ $400,000 $ 400,000
-----------
VIRGINIA 9.3%
Fairfax County Water Authority
Revenue
7.25%, 1/1/00^ AAA.......... 400,000 408,000
Fairfax County Water Authority
Revenue
6.125%, 1/1/00^ AAA......... 210,000 210,000
Hampton General Obligation
6.625%, 1/1/00^ AA.......... 800,000 816,000
Richmond General Obligation
4.7%, 7/15/00 AA............ 200,000 200,940
-----------
State Total................. 1,634,940
-----------
WASHINGTON 1.3%
Vancouver General Obligation
3.75%, 12/1/00 AAA.......... 225,000 224,699
-----------
TOTAL INVESTMENTS 107.0%
(Cost $18,697,934*)................... 18,697,934
-----------
LIABILITIES IN EXCESS OF OTHER ASSETS
(7.0%).................................. (1,223,383)
-----------
NET ASSETS (NOTE 6) 100.0%.............. $17,474,551
===========
NET ASSET VALUE PER SHARE
(Based on 17,474,551 Shares
Outstanding).......................... $1.00
===========

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

+ Daily or Weekly Tender Bond

^ Date represents pre-refunded or call date.

* Same cost is used for Federal income tax purposes.

Security Ratings are unaudited.

See Notes to Financial Statements.

<PAGE>

FUND FOR TAX-FREE INVESTORS, INC.
STATEMENT OF NET ASSETS
VIRGINIA PORTFOLIO

December 31, 1999

Face Value
Value (Note 1)
---------- -----------

Arlington County General
Obligation
6%, 8/1/12 AAA............ $ 500,000 $ 533,510
5.4%, 6/1/13 AAA.......... 1,000,000 993,360
5.375%, 12/1/16 AAA....... 1,000,000 965,480
Brunswick County Industrial
Development Authority
Revenue
5.5%, 7/1/17 AAA.......... 1,000,000 968,360
Fairfax City EDA Lease
Revenue
5.5%, 5/15/18 AA.......... 1,000,000 953,270
Fairfax County Industrial
Development Authority
Revenue
5.25%, 8/15/19 AA......... 650,000 586,547
Fairfax County Water
Authority Revenue
5.8%, 1/1/16 AAA.......... 500,000 497,940
6%, 4/1/22 AA............. 630,000 631,260
Hanover County Water and
Sewer Revenue
5.25%, 2/1/16 AAA......... 500,000 468,485
Hanover County Virginia
General Obligation
5.4%, 7/15/16 AA.......... 1,000,000 967,080
Henrico County Industrial
Development Authority
Revenue
7.125%, 8/1/05^ AA........ 400,000 450,048
Henrico County Water and
Sewer Revenue
6.25%, 5/1/02^ AA-........ 200,000 207,342
6.25%, 5/1/13 AA-......... 300,000 311,013
Henry County General
Obligation
8.825%, 11/1/05^ AAA...... 200,000 239,900
Leesburg General Obligation
5.5%, 6/1/05^ AAA......... 500,000 523,010
Loudoun County General
Obligation
5%, 12/1/18 AA............ 1,000,000 902,410
5.25%, 12/1/14 AA......... 1,000,000 967,810
Loudoun County Sanitation
Authority Revenue
6.25%, 1/1/16 AAA......... 500,000 530,585
Lynchburg General Obligation
5%, 5/1/18 AA............. 1,000,000 900,940

<PAGE>

Face Value
Value (Note 1)
---------- -----------

Lynchburg Industrial
Development Authority
Revenue
5.2%, 1/1/18 A+........... $ 500,000 $ 450,230
Montgomery Industrial
Development Authority
5.125%, 1/15/19 AAA....... 500,000 450,450
Newport News General
Obligation
5%, 3/1/18 AA............. 795,000 714,196
Norfolk General Obligation
5.75%, 6/1/13 AAA......... 500,000 508,275
Norfolk Water Revenue
5.75%, 11/1/12 AAA........ 500,000 516,170
5.875%, 11/1/15 AAA....... 500,000 511,920
Portsmouth Redevelopment and
Housing Authority Revenue
6.05%, 12/1/08 AAA........ 500,000 510,145
Potomac and Rappahannock
Transportation District
Commission Revenue
6.7%, 3/1/00^ AAA......... 600,000 614,514
Prince William County Park
Authority Revenue
6.875%, 10/15/04^ BBB+.... 500,000 552,865
Prince William County Water
and Sewer System Revenue
5.5%, 7/1/19 AAA.......... 500,000 474,240
Richmond Metro Authority
Revenue
6.375%, 7/15/02^ AAA...... 500,000 530,250
Richmond General Obligation
5.125%, 1/15/16 AAA....... 500,000 462,830
Richmond Public Utilities
Revenue
5.25%, 1/15/18 A+......... 1,000,000 915,940
Upper Occoquan Sewer
Authority Revenue
5.15%, 7/1/20 AAA......... 500,000 455,185
Virginia Beach General
Obligation
6.5%, 8/1/01^ AA.......... 500,000 525,200
5%, 8/1/17 AA............. 1,075,000 973,230
Virginia Housing Development
Authority Revenue
5.95%, 7/1/13 AA+......... 500,000 506,025
5.1%, 7/1/14 AA+.......... 1,000,000 931,990

<PAGE>

STATEMENT OF NET ASSETS
VIRGINIA PORTFOLIO (continued)

December 31, 1999

Face Value
Value (Note 1)
---------- -----------

Virginia Housing Development
Authority Revenue
5.75%, 1/1/19 AAA......... $1,000,000 $ 980,760
Virginia Port Authority
Revenue
5.9%, 7/1/16 AA........... 500,000 503,985
Virginia Public Building
Authority Revenue
5.2%, 8/1/16 AA........... 1,000,000 932,550
Virginia Public School
Authority Revenue
6.2%, 8/1/13 AA........... 320,000 335,088
5%, 8/1/18 AA+............ 1,000,000 895,020
Virginia Resource Authority
Revenue
6.75%, 10/1/04^ NR........ 240,000 260,174
Virginia State General
Obligation
5.25%, 6/1/19 AAA......... $1,250,000 $ 1,156,750
-----------
TOTAL INVESTMENTS 97.7%
(Cost $28,770,102*)................... 28,266,332
OTHER ASSETS LESS LIABILITIES 2.3%...... 659,322
-----------
NET ASSETS (NOTE 6) 100.0%.............. $28,925,654
===========
NET ASSET VALUE PER SHARE
(Based on 2,757,349 Shares
Outstanding).......................... $10.49
===========

- ---------

^ Date represents pre-refunded date.

* Same cost is used for Federal income tax purposes.

NR Not Rated

Security Ratings are unaudited.

See Notes to Financial Statements.

<PAGE>

FUND FOR TAX-FREE INVESTORS, INC.

STATEMENT OF NET ASSETS
MARYLAND PORTFOLIO

December 31, 1999

Face Value
Value (Note 1)
---------- -----------

Anne Arundel County Water
and Sewer General Obligation
6.2%, 8/1/05^ AA+......... $ 725,000 $ 777,882
6%, 7/15/02^ AA+.......... 500,000 525,860
6.3%, 8/1/05^ AA+......... 500,000 538,890
6.3%, 8/1/05^ AA+......... 725,000 781,390
Anne Arundel County
Pollution Control Revenue
6%, 4/1/24 A.............. 1,230,000 1,208,290
Anne Arundel County Solid
Waste Project General
Obligation
5.5%, 9/1/15 AA+.......... 500,000 488,675
Baltimore City General
Obligation
6.4%, 10/15/02^ AAA....... 465,000 487,004
5.5%, 10/15/10 AAA........ 1,000,000 1,025,120
5.5%, 10/15/15 AAA........ 500,000 525,355
Baltimore Wastewater Project
Revenue
6%, 7/1/15 AAA............ 500,000 515,305
Baltimore County General
Obligation
6.125%, 7/1/02^ AAA....... 500,000 527,045
5.5%, 6/1/12 AAA.......... 1,000,000 1,008,660
Baltimore Port Facility
Revenue
6.5%, 12/1/10 AA-......... 400,000 420,652
Carroll County General
Obligation
7.1%, 10/1/09 AA.......... 235,000 244,872
7.25%, 10/1/15 AA......... 300,000 312,930
5.3%, 11/1/15 AA.......... 1,000,000 967,670
6.5%, 10/1/04^ AA......... 225,000 245,147
Frederick County General
Obligation
6.125%, 12/1/07 AAA....... 500,000 522,960
5.6%, 7/1/11 AA........... 500,000 521,755
City of Frederick General
Obligation
6%, 10/1/11 AAA........... 300,000 312,276
Howard County Metropolitan
District General Obligation
6%, 8/15/19 AAA........... 840,000 841,470
Howard County Public
Improvement General
Obligation
6%, 5/15/03^ AAA.......... 500,000 520,495
5.5%, 2/15/04^ AAA........ 1,000,000 1,035,960

<PAGE>

Face Value
Value (Note 1)
---------- -----------

Howard County Special
Facilities Revenue
6.1%, 2/15/13 AAA......... $ 500,000 $ 515,670
Laurel General Obligation
6.7%, 7/1/01^ AAA......... 600,000 631,062
Maryland Community
Development Administration
Revenue
7.375%, 4/1/10 AA2........ 495,000 505,880
7.25%, 4/1/11 AA2......... 200,000 205,066
7.15%, 4/1/11 AA2......... 405,000 420,289
5%, 4/1/17 AA2............ 500,000 445,690
7.7%, 5/15/20 AA3......... 250,000 256,953
7.25%, 4/1/27 AA2......... 385,000 390,925
Maryland General Obligation
5%, 10/15/11 AAA.......... 1,000,000 979,870
5%, 3/1/12 AAA............ 1,000,000 971,530
Maryland Health and Higher
Education Facilities
Authority Revenue
5.7%, 7/1/09 A1........... 500,000 520,075
5.25%, 7/1/13 AAA......... 500,000 484,495
6.125%, 7/1/14 AAA........ 500,000 523,975
5.5%, 10/1/16 AAA......... 1,000,000 982,730
6.125%, 7/1/19 AAA........ 500,000 505,065
5%, 7/1/19 A2............. 500,000 419,220
5%, 7/1/27 AAA............ 1,500,000 1,317,420
6%, 7/1/39 AA............. 500,000 491,835
Maryland Health and Higher
Education Facilities
Authority Floating Rate Note
5.65%, 1/1/32+ VMIG1...... 200,000 200,000
Maryland Industrial
Development Revenue
7.125%, 7/1/06 A-......... 200,000 200,294
Maryland Stadium Authority
Sports Revenue
5.55%, 3/1/13 AAA......... 500,000 505,255
5.875%, 12/15/13 AAA...... 1,000,000 1,043,400
5.375%, 12/15/15 AA....... 500,000 482,845
Maryland Water Quality
Finance Administration
Revenue
6%, 9/1/15 AA............. 1,000,000 1,017,780
Montgomery County General
Obligation
5%, 5/1/19 AAA............ 500,000 451,140

<PAGE>

STATEMENT OF NET ASSETS
MARYLAND PORTFOLIO (continued)

December 31, 1999

Face Value
Value (Note 1)
---------- -----------

Montgomery County Housing
Opportunity Commission
Revenue
6.7%, 7/1/11 AA2.......... $ 315,000 $ 322,267
7.375%, 7/1/17 AA2........ 95,000 96,029
6.65%, 7/1/17 AA2......... 160,000 163,547
7%, 7/1/23 A3............. 250,000 253,548
Montgomery County Waste
Disposal Authority Revenue
5.875%, 6/1/13 AAA........ 250,000 255,560
North East Maryland Waste
Disposal Authority Revenue
6.2%, 7/1/10 A2........... 500,000 518,095
6.3%, 7/1/16 A2........... 1,000,000 1,013,880
Prince Georges County
General Obligation
5.25%, 3/15/15 AAA........ 1,000,000 949,680
Prince Georges County
Housing Authority Revenue
6.35%, 7/20/20 AAA........ 700,000 708,386
Prince Georges County
Pollution Control Revenue
5.75%, 3/15/10 A.......... 1,000,000 1,044,650
Prince Georges County Solid
Waste Management System
Revenue
7%, 6/30/00^ AAA.......... 250,000 258,557
St. Mary's County General
Obligation
5.85%, 11/1/18 AAA........ 500,000 499,385

<PAGE>

Face Value
Value (Note 1)
---------- -----------

University of Maryland
System Auxiliary Revenue
6.375%, 10/1/02^ AA+...... $ 500,000 $ 531,800
5.6%, 4/1/12 AA+.......... 1,000,000 1,016,410
5.125%, 4/1/15 AA+........ 1,000,000 944,260
5.6%, 4/1/16 AA+.......... 1,000,000 985,230
Washington County General
Obligation
5.25%, 1/1/16 AAA......... 500,000 470,090
Washington, D.C.
Metropolitan Area
Transportation Authority
Revenue
6%, 7/1/09 AAA............ 500,000 530,460
6%, 7/1/10 AAA............ 275,000 291,486
Washington Suburban Sanitary
District General Obligation
6.2%, 6/1/12 AA........... 900,000 942,327
5%, 6/1/23 AA............. 1,000,000 876,170
-----------
TOTAL INVESTMENTS 98.5%
(Cost $41,320,628*)................... 41,495,944
OTHER ASSETS LESS LIABILITIES 1.5%...... 636,541
-----------
NET ASSETS (NOTE 6) 100.0%.............. $42,132,485
===========
NET ASSET VALUE PER SHARE
(Based on 3,992,515 Shares
Outstanding).......................... $10.55
===========

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

^ Date represents pre-refunded date.

+ Daily or Weekly Tender Bond

* Same cost is used for Federal income tax purposes.

Security Ratings are unaudited.

See Notes to Financial Statements.

FUND FOR TAX-FREE INVESTORS, INC.
STATEMENTS OF OPERATIONS

For the Year Ended December 31, 1999

<CAPTION>
Money
Market Virginia Maryland
Portfolio Portfolio Portfolio
--------- ---------- -----------

<S> <C> <C> <C>
INVESTMENT INCOME (Note 1).................................. $591,590 $ 1,794,885 $ 2,511,776
-------- ----------- -----------
EXPENSES
Investment Advisory Fee (Note 2).......................... 91,951 206,583 284,560
Administrative Fee (Note 2)............................... 45,976 99,192 136,589
Other Fees................................................ 146 -- 15
-------- ----------- -----------
Total Expenses.......................................... 138,073 305,775 421,164
-------- ----------- -----------
NET INVESTMENT INCOME....................................... 453,517 1,489,110 2,090,612
-------- ----------- -----------
Net Realized Loss on Investment Transactions................ -- (194,916) (58,384)
Change in Net Unrealized Appreciation/Depreciation of
Investments................................................. -- (2,538,557) (2,774,745)
-------- ------------ -----------
NET LOSS ON INVESTMENTS..................................... -- (2,733,473) (2,833,129)
-------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.................................................. $453,517 $(1,244,363) $ (742,517)
======== =========== ===========

See Notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>

FUND FOR TAX-FREE INVESTORS, INC.
STATEMENTS OF CHANGES IN NET ASSETS

For the Years Ended December 31,

Money Market Virginia Maryland
Portfolio Portfolio Portfolio
-------------------------- ------------------------- ------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income................. $ 453,517 $ 496,758 $ 1,489,110 $ 1,464,437 $ 2,090,612 $ 2,115,375
Net Realized Gain (Loss) on Investment
Transactions........................ -- -- (194,916) 515,403 (58,384) 98,804
Change in Net Unrealized Appreciation/
Depreciation of Investments......... -- -- (2,538,557) (155,249) (2,774,745) 454,108
------------ ------------ ----------- ------------ ----------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations........... 453,517 496,758 (1,244,363) 1,824,591 (742,517) 2,668,287
------------ ------------ ----------- ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
(Note 1)............................ (453,517) (496,758) (1,489,110) (1,464,437) (2,090,612) (2,115,375)
From Net Realized Gain................ -- -- (48,974) (466,429) -- --
------------ ------------ ----------- ------------ ----------- -----------
Total Distributions to Shareholders... (453,517) (496,758) (1,538,084) (1,930,866) (2,090,612) (2,115,375)
------------ ------------ ----------- ------------ ----------- -----------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares..... 29,881,644 35,657,860 5,047,389 11,697,514 7,111,506 8,091,036
Reinvestment of Distributions......... 428,371 473,977 1,320,279 1,651,857 1,797,355 1,783,553
Cost of Shares Redeemed............... (32,618,355) (35,526,092) (9,202,553) (11,607,428) (9,770,286) (9,944,519)
------------ ------------ ----------- ------------ ----------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Share Transactions... (2,308,340) 605,745 (2,834,885) 1,741,943 (861,425) (69,930)
------------ ------------ ----------- ------------ ----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.............................. (2,308,340) 605,745 (5,617,332) 1,635,668 (3,694,554) 482,982

NET ASSETS - Beginning of Year.......... 19,782,891 19,177,146 34,542,986 32,907,318 45,827,039 45,344,057
------------ ------------ ----------- ------------ ----------- -----------
NET ASSETS - End of Year................ $ 17,474,551 $ 19,782,891 $28,925,654 $ 34,542,986 $42,132,485 $45,827,039
============ ============ =========== ============ =========== ===========
SHARES
Sold.................................. 29,881,644 35,657,860 453,773 1,018,080 643,043 724,881
Issued in Reinvestment of
Distributions....................... 428,371 473,977 120,013 143,753 164,735 159,779
Redeemed.............................. (32,618,355) (35,526,092) (840,524) (1,009,987) (894,497) (890,970)
------------ ------------ ----------- ------------ ----------- -----------
Net Increase (Decrease) in Shares..... (2,308,340) 605,745 (266,738) 151,846 (86,719) (6,310)
============ ============ =========== ============ =========== ===========

See Notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>

FUND FOR TAX-FREE INVESTORS, INC.
FINANCIAL HIGHLIGHTS

MONEY MARKET PORTFOLIO

For the Years Ended December 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value - Beginning of Year.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income.............................. 0.02 0.03 0.03 0.03 0.03
------- ------- ------- ------- -------
Distributions to Shareholders:
From Net Investment Income......................... (0.02) (0.03) (0.03) (0.03) (0.03)
------- ------- ------- ------- -------
Net Increase in Net Asset Value...................... 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- -------
Net Asset Value - End of Year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======

TOTAL INVESTMENT RETURN................................ 2.50% 2.73% 2.93% 2.69% 3.09%

RATIOS TO AVERAGE NET ASSETS:
Expenses............................................. 0.75% 0.75% 0.75% 0.75% 0.75%
Net Investment Income................................ 2.47% 2.70% 2.89% 2.67% 3.04%

SUPPLEMENTARY DATA:
Net Assets at End of Year (in thousands)............. $17,475 $19,783 $19,177 $18,890 $20,772
Number of Shares Outstanding at End of Year
(in thousands)..................................... 17,475 19,783 19,177 18,890 20,792

See Notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>

FUND FOR TAX-FREE INVESTORS, INC.
FINANCIAL HIGHLIGHTS

VIRGINIA PORTFOLIO

<CAPTION>
For the Years Ended December 31,
---------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- -------- --------

<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value - Beginning of Year....................... $ 11.42 $ 11.46 $ 11.09 $ 11.31 $ 10.36
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income................................... 0.50 0.52 0.52 0.53 0.56
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.91) 0.12 0.39 (0.22) 0.95
------- ------- ------- ------- -------
Total from Investment Operations...................... (0.41) 0.64 0.91 0.31 1.51
------- ------- ------- ------- -------
Distributions to Shareholders:
From Net Investment Income.............................. (0.50) (0.52) (0.52) (0.53) (0.56)
From Net Realized Gain.................................. (0.02) (0.16) (0.02) -- --
------- ------- ------- ------- -------
Total Distributions to Shareholders................... (0.52) (0.68) (0.54) (0.53) (0.56)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value................ (0.93) (0.04) 0.37 (0.22) 0.95
------- ------- ------- ------- -------
Net Asset Value - End of Year............................. $ 10.49 $ 11.42 $ 11.46 $ 11.09 $ 11.31
======= ======= ======= ======= =======

TOTAL INVESTMENT RETURN..................................... (3.75)% 5.64% 8.45% 2.91% 14.92%

RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................. 0.93% 0.93% 0.93% 0.93% 0.77%
Expenses Before Reimbursement from Adviser................ 0.93% 0.93% 0.93% 0.93% 0.93%
Net Investment Income..................................... 4.51% 4.48% 4.70% 4.84% 5.17%

SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 26% 25% 27% 46% 55%
Net Assets at End of Year (in thousands).................. $28,926 $34,543 $32,908 $32,355 $33,468
Number of Shares Outstanding at End of Year (in
thousands).............................................. 2,757 3,024 2,872 2,917 2,958

See Notes to Financial Statements.

</TABLE>

<PAGE>

<TABLE>

FUND FOR TAX-FREE INVESTORS, INC.
FINANCIAL HIGHLIGHTS

MARYLAND PORTFOLIO

For the Years Ended December 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------

<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value - Beginning of Year....................... $ 11.23 $ 11.10 $ 10.79 $ 10.98 $ 10.11
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income................................... 0.50 0.51 0.51 0.53 0.55
Net Realized and Unrealized Gain (Loss) on
Investments........................................... (0.68) 0.13 0.31 (0.19) 0.87
------- ------- ------- ------- -------
Total from Investment Operations...................... (0.18) 0.64 0.82 0.34 1.42
------- ------- ------- ------- -------
Distributions to Shareholders:
From Net Investment Income.............................. (0.50) (0.51) (0.51) (0.53) (0.55)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value................ (0.68) 0.13 0.31 (0.19) 0.87
------- ------- ------- ------- -------
Net Asset Value - End of Year............................. $ 10.55 $ 11.23 $ 11.10 $ 10.79 $ 10.98
======= ======= ======= ======= =======

TOTAL INVESTMENT RETURN..................................... (1.63)% 5.90% 7.85% 3.21% 14.35%

SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................... 12% 5% 22% 31% 37%
Net Assets at End of Year (in thousands).................. $42,132 $45,827 $45,346 $44,410 $49,725
Number of Shares Outstanding at End of Year (in
thousands).............................................. 3,993 4,079 4,086 4,116 4,527

See Notes to Financial Statements

</TABLE>

<PAGE>

FUND FOR TAX-FREE INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS

December 31, 1999

1. SIGNIFICANT ACCOUNTING POLICIES

Fund for Tax-Free Investors, Inc. (the "Fund") is registered with the
Securities and Exchange Commission under the Investment Company Act of
1940 as a no-load, open-end, investment company. The Fund consists of
three separate portfolios which invest primarily in securities exempt
from Federal income taxes. On December 31, 1999, there were
200,000,000 shares of $0.001 par value capital stock authorized. When
preparing the Fund's financial statements, management makes estimates
and assumptions to comply with generally accepted accounting
principles. These estimates affect 1) the assets and liabilities that
we report at the date of the financial statements; 2) the contingent
assets and liabilities that we disclose at the date of the financial
statements; and 3) the revenues and expenses that we report for the
period. These estimates could be different from the actual results.
The following is a summary of significant accounting policies which
the Fund consistently follows:

(a) Securities of the Money Market Portfolio are valued at amortized
cost which approximates market value. Securities of the Virginia and
Maryland Portfolios are valued by a pricing service. Securities for
which market quotations are not readily available are valued using
the policies and proceedures set forth by the Adviser as approved by
the Board of Directors.

(b) Investment income is recorded as earned.

(c) Net investment income is computed, and dividends are declared
daily. Dividends are paid monthly and reinvested in additional shares
unless shareholders request payment. Net capital gains, if any, will
be distributed to shareholders annually.

(d) The Fund complies with the provisions of the Internal Revenue
Code applicable to regulated investment companies and distributes all
net investment income to its shareholders. Therefore, no Federal
income tax provision is required. The Fund also meets the requirements
that allow it to designate distributions from interest income on
obligations which are exempt from Federal income tax as exempt-
interest dividends.

2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Investment advisory and management services are provided by Money
Management Associates (the "Adviser") under an agreement whereby the
Fund pays a fee at an annual rate of 0.50% of the average daily net
assets of the Money Market Portfolio and 0.625% of the average daily
net assets of the Virginia Portfolio and of the Maryland Portfolio.
The Adviser has agreed to reimburse the Fund for expenses, (including
investment advisory fee), excluding interest and extraordinary legal
expenses, which exceed one percent of the average daily net assets per
annum. No reimbursement was required for the year ended December 31,
1999. Certain Officers and Directors of the Fund are also affiliated
with the Adviser.

Rushmore Trust and Savings, FSB ("Rushmore Trust"), a majority-owned
subsidiary of the Adviser, provides transfer agency, dividend
disbursing and other shareholder services to the Fund. In addition,
Rushmore Trust serves as custodian of the Fund's assets and pays the
operating expenses of the Fund. For these services, Rushmore Trust
receives an annual fee of 0.25% of the average daily net assets of the
Money Market Portfolio, and 0.30% of the average daily net assets of
the Virginia and Maryland Portfolios. The Fund has an agreement with
Rushmore Trust to receive short-term borrowings to cover share
redemptions. Borrowings pursuant to the credit facility are subject to
interest at the overdraft Federal Funds rate. The credit facility may
be drawn upon for temporary purposes and is subject to certain other
customary restrictions. For each short-term borrowing the Fund pledges
collateral. No borrowings were outstanding at December 31, 1999.

<PAGE>

3. AGREEMENT WITH FRIEDMAN BILLINGS RAMSEY GROUP, INC.

On October 20, 1999, the Adviser and Rushmore Trust reached a
definitive agreement to be aquired by Friedman Billings Ramsey Group,
Inc. The transaction is subject to various regulatory approvals.

4. SECURITIES TRANSACTIONS

Security transactions are recorded on the trade date. For the year
ended December 31, 1999, purchases and sales (including maturities),
of securities, excluding short-term securities, were as follows:

Virginia Maryland
Portfolio Portfolio
----------- ----------
Purchases............................ $ 8,318,157 $5,145,068
=========== ==========
Sales............................... $11,130,578 $5,338,499
=========== ==========

5. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS

As of December 31, 1999, net unrealized depreciation of investments in
the Virginia Portfolio for Federal income tax purposes aggregated
$503,770 of which $414,348 related to appreciated investments and
$918,118 related to depreciated investments. In the Maryland
Portfolio, net unrealized appreciation of investments for Federal
income tax purposes totaled $175,316 of which $852,030 related to
appreciated investments and $676,714 related to depreciated
investments.

6. NET ASSETS

At December 31, 1999, net assets consisted of the following:

Money Market Virginia Maryland
Portfolio Portfolio Portfolio

--------------- --------------- -------------
<S> <C> <C> <C>
Paid-in-Capital................................... $17,474,551 $29,624,340 $42,047,167
Accumulated Net Realized Loss on Investments...... -- (194,916) (89,998)
Net Unrealized Appreciation (Depreciation) of
Investments....................................... -- (503,770) 175,316

--------------- ---------------- -------------
NET ASSETS......................................... $17,474,551 $28,925,654 $42,132,485
=============== ============== ==============

</TABLE>

<PAGE>

7. CAPITAL LOSS CARRYOVERS

At December 31, 1999, for Federal income tax purposes, the following
Portfolios had capital loss carryforwards which may be applied against
future net taxable realized gains of each succeeding year until the
earlier of its utilization or its expiration:

Virginia Maryland
Portfolio Portfolio
------------ ------------

Expires December 31,
2002................................ $ -- $31,614
2007................................ 194,916 58,384

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
of Fund for Tax-Free Investors, Inc.:

We have audited the accompanying statements of net assets of the Money
Market, Virginia and Maryland Portfolios of Fund for Tax-Free
Investors, Inc. (the "Fund") as of December 31, 1999, and the related
statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the Money Market, Virginia and Maryland
Portfolios of Fund for Tax-Free Investors, Inc. as of December 31,
1999, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP

Princeton, New Jersey
January 20, 2000

<PAGE>

PART C

<PAGE>

PART C
OTHER INFORMATION

Fund for Tax-Free Investors, Inc.

ITEM 23. Exhibits
(a) Articles of Incorporation of Registrant.1/
(b) Bylaws of Registrant. 1/
(c) Voting Trust Agreement. 2/
(d) Management Contract between Registrant and Money Management
Associates. 3/
(e) Underwriting Contracts. 2/
(f) Bonus or Profit Sharing Contracts. 2/
(g) Custody Agreement between Registrant and Rushmore Trust and
Savings, FSB. 3/
(h)(1) Administrative Services Agreement between Registrant and
Rushmore Trust and Savings, FSB. 3/
(h)(2) Agreement between Money Management Associates and Rushmore
Services, Inc. as amended. 3/
(i) Opinion of counsel regarding the legality of securities being
registered. 1/
(j) Consent of Deloitte & Touche LLP, independent public
accountants for the Registrant.4/
(k) Omitted Financial Statements. 2/
(l) Initial Capital Agreements. 2/
(m) Rule 12b-1 Plan. 2/
(n) Financial Data Schedule for the Registrant. 4/
(o) Rule 18f-3 Plan. 2/
(p) Powers of Attorney. 3/

1/ Incorporated by reference to the Registrant's initial
registration statement on Form N-1 filed on July 19, 1983
(Registration Nos. 33-63313 and 811-4369).

2/ None.

3/ Incorporated by reference to the Registrant's Registration
Statement on Form N-1A, previously filed with the Securities and
Exchange Commission on February 26, 1999 (Registration Nos. 33-63313
and 811-4369).

4/ Filed herewith.

<PAGE>

ITEM 24. Persons Controlled By or Under Common Control with the Fund
The following persons may be deemed to be directly or indirectly
controlled by or under common control with the Fund, a Maryland
corporation:

Percentage of Voting Securities
Owned and/or Controlled by the
State of Organization and Controlling Persons or
Company Relationship (if any) to the Fund Other Basis of Common Control

<S> <S> <S>
Money Management Associates a District of Columbia limited Daniel L. O'Connor holds 100% of
("MMA" or the "Adviser") partnership, registered transfer the voting authority in MMA in
agent and registered investment Daniel L. O'Connor's capacity as
adviser to four investment the sole general partner of MMA.
companies, including the Fund

Rushmore Trust and Savings, FSB a Maryland corporation, and a 72.4% of the voting securities
("RTS" or the "Administrator") registered transfer agent, which of RTS is held by MMA, and 27.6%
provides transfer agency, dividend of the voting securities of RTS
disbursing, and shareholder services is held by Daniel L. O'Connor,
to the Fund, and serves as the the sole general partner of MMA.
Fund's custodian

Rushmore Services, Inc. ("RSI") a Maryland Corporation which 100% of the voting securities of
provides certain services to the RSI is owned by MMA.
Fund

The Rushmore Fund, Inc. a Maryland corporation, and a
registered investment company, which
is advised by MMA

Fund for Government Investors a Delaware business trust, and a
registered investment company, which
is advised by MMA

American Gas Index Fund, Inc. a Maryland corporation, and a
registered investment company, which
is advised by MMA

Cappiello-Rushmore Trust a Delaware business trust, and a
registered investment company, of
which MMA is the administrator

</TABLE>

<PAGE>

ITEM 25. Indemnification
The Registrant was incorporated in the State of Maryland on April
8, 1983, and is operated pursuant to the Articles of Incorporation
of the Registrant, dated as of April 6, 1983, that permit the
Registrant to indemnify its directors and officers under certain
circumstances. Such indemnification, however, is subject to the
limitations imposed by the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended.

The Articles of Incorporation of the Fund provide that officers and
directors shall be indemnified by the Fund against liabilities and
expenses of defense in proceedings against them by reason of the
fact that they serve as officers or directors of the Fund or as an
officer or director of another entity at the request of the entity.
This indemnification is subject to the following conditions:

(a) no director or officer is indemnified against any liability
to the Fund or its security holders which was the result of any
willful misfeasance, bad faith, gross negligence, or reckless
disregard of his duties;

(b) officers and directors are indemnified only for actions
taken in good faith which the officers and directors believed
were in or not opposed to the best interests of the Fund; and

(c) expenses of any suit or proceeding will be paid in advance
only if the persons who will benefit by such advance undertake to
repay the expenses unless it is subsequently determined that they
are entitled to indemnification.

<PAGE>

The Articles of Incorporation of the Registrant provide that if
indemnification is not ordered by a court, indemnification may be
authorized upon determination by shareholders, or by a majority
vote of a quorum of the directors who were not parties to the
proceedings or, if a quorum is not obtainable, or if directed by a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion that the persons to be indemnified
have met the applicable standard.

ITEM 26. Business and Other Connections of the Investment Adviser

Money Management Associates ("MMA"), 100 Lakeshore Drive, Suite
1555, North Palm Beach, Florida 33408, a limited partnership
organized under the laws of the District of Columbia on August 15,
1974, has one general partner and two limited partners. Daniel L.
O'Connor is the general partner and Martin M. O'Connor, and John R.
Cralle are limited partners of MMA.

MMA also serves as the investment adviser to Fund for Government
Investors, The Rushmore Fund, Inc., and American Gas Index Fund,
Inc., all regulated investment companies since their inception.

ITEM 27. Principal Underwriters
Not applicable

ITEM 28. Location of Accounts and Records
The physical location for all accounts, books, and records required
to be maintained and preserved by Section 31(a) of the Investment
Company Act of 1940, as amended, and Rules 31a-1 and 31a-2
thereunder, is 4922 Fairmont Avenue, Bethesda, Maryland 20814.

ITEM 29. Management Services
Not Applicable

ITEM 30. Undertakings
None.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in this City
of Bethesda in the State of Maryland, on the 25th day of April, 2000.

Fund for Tax-Free Investors, Inc.

By:

/s/ Daniel L. O'Connor*
Daniel L. O'Connor, Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

Name Title Date

/s/ Daniel L. O'Connor* Chairman of the Board April 24, 2000
Daniel L. O'Connor Treasurer, Director

/s/ Richard J. Garvey* President, Director April 24, 2000
Richard J. Garvey

/s/ Jeff Ellis* Director April 24, 2000
Jeffrey R. Ellis

/s/ Bruce Ellis* Director April 24, 2000
Bruce C. Ellis

/s/ Michael D. Lange* Director April 24, 2000
Michael D. Lange

/s/ Patrick F. Noonan* Director April 24, 2000
Patrick F. Noonan

/s/ Leo Seybold* Director April 24, 2000
Leo Seybold

*Stephenie E. Adams, attorney-in-fact

Exhibit J

Consent of Independent Auditors

Deloitte & Touche LLP

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

Fund for Tax-Free Investors, Inc.:

We consent to the incorporation by reference in Post-Effective
Amendment No. 18 to Registration Statement No. 2-83299 of our report
dated January 20, 2000, appearing in the Annual Report of Fund for Tax-
Free Investors, Inc. for the year ended December 31, 1999 and to the
reference to us under the caption "Financial Highlights" appearing in
the Prospectuses, which are also a part of such Registration
Statement.

/s/ Deloitte & Touche LLP

Princeton, New Jersey
April 25, 2000

<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MONEY MARKET PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 18,697,934
<INVESTMENTS-AT-VALUE> 18,697,934
<RECEIVABLES> 274,174
<ASSETS-OTHER> 32,579
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19,004,687
<PAYABLE-FOR-SECURITIES> 1,500,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,136
<TOTAL-LIABILITIES> 1,530,136
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,474,551
<SHARES-COMMON-STOCK> 17,474,551
<SHARES-COMMON-PRIOR> 19,782,891
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17,474,551
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 591,590
<OTHER-INCOME> 0
<EXPENSES-NET> (138,073)
<NET-INVESTMENT-INCOME> 453,517
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 453,517
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (453,517)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 29,881,644
<NUMBER-OF-SHARES-REDEEMED> (32,618,355)
<SHARES-REINVESTED> 428,371
<NET-CHANGE-IN-ASSETS> (2,308,340)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 91,951
<INTEREST-EXPENSE> 146
<GROSS-EXPENSE> 138,073
<AVERAGE-NET-ASSETS> 18,384,825
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.020
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.020)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.750

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> VIRGINIA PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 28,770,102
<INVESTMENTS-AT-VALUE> 28,266,332
<RECEIVABLES> 415,111
<ASSETS-OTHER> 322,929
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,004,372
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 78,718
<TOTAL-LIABILITIES> 78,718
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,624,340
<SHARES-COMMON-STOCK> 2,757,349
<SHARES-COMMON-PRIOR> 3,024,087
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (194,916)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (503,770)
<NET-ASSETS> 28,925,654
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,794,885
<OTHER-INCOME> 0
<EXPENSES-NET> (305,775)
<NET-INVESTMENT-INCOME> 1,489,110
<REALIZED-GAINS-CURRENT> (194,916)
<APPREC-INCREASE-CURRENT> (2,538,557)
<NET-CHANGE-FROM-OPS> (1,244,363)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,489,110)
<DISTRIBUTIONS-OF-GAINS> (48,974)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 453,773
<NUMBER-OF-SHARES-REDEEMED> (840,524)
<SHARES-REINVESTED> 120,013
<NET-CHANGE-IN-ASSETS> (5,617,332)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 48,974
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 206,583
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 305,775
<AVERAGE-NET-ASSETS> 33,038,626
<PER-SHARE-NAV-BEGIN> 11.420
<PER-SHARE-NII> 0.500
<PER-SHARE-GAIN-APPREC> (0.910)
<PER-SHARE-DIVIDEND> (0.500)
<PER-SHARE-DISTRIBUTIONS> (0.020)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.490
<EXPENSE-RATIO> 0.930

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> MARYLAND PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 41,320,628
<INVESTMENTS-AT-VALUE> 41,495,944
<RECEIVABLES> 736,017
<ASSETS-OTHER> 15,411
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,247,372
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 114,887
<TOTAL-LIABILITIES> 114,887
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 42,047,167
<SHARES-COMMON-STOCK> 3,992,515
<SHARES-COMMON-PRIOR> 4,079,234
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (89,998)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 175,316
<NET-ASSETS> 42,132,485
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,511,776
<OTHER-INCOME> 0
<EXPENSES-NET> (421,164)
<NET-INVESTMENT-INCOME> 2,090,612
<REALIZED-GAINS-CURRENT> (58,384)
<APPREC-INCREASE-CURRENT> (2,774,745)
<NET-CHANGE-FROM-OPS> (742,517)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,090,612)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 643,043
<NUMBER-OF-SHARES-REDEEMED> (894,497)
<SHARES-REINVESTED> 164,735
<NET-CHANGE-IN-ASSETS> (3,694,554)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (31,614)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 284,560
<INTEREST-EXPENSE> 15
<GROSS-EXPENSE> 421,164
<AVERAGE-NET-ASSETS> 45,514,666
<PER-SHARE-NAV-BEGIN> 11.230
<PER-SHARE-NII> 0.500
<PER-SHARE-GAIN-APPREC> (0.680)
<PER-SHARE-DIVIDEND> (0.500)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.550
<EXPENSE-RATIO> 0.930

</TABLE>