<PAGE> PAGE 1
000 A000000 04/30/95
000 C000000 0000780113
000 D000000 N
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000 F000000 Y
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000 I000000 3.0.a
000 J000000 A
001 A000000 STATE BOND INCOME FUNDS, INC.
001 B000000 811-4445
001 C000000 6128350097
002 A000000 8400 NORMANDALE LAKE BLVD
002 B000000 MINNEAPOLIS
002 C000000 MN
002 D010000 55437
003 000000 N
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007 C020100 STATE BOND U.S. GOVT & AGENCY SECURITIES FUND
007 C030100 N
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008 D01AA01 MINNEAPOLIS
008 D02AA01 MN
008 D03AA01 55437
011 A00AA01 SBM FINANCIAL SERVICES, INC.
011 B00AA01 8-14810
011 C01AA01 MINNEAPOLIS
011 C02AA01 MN
011 C03AA01 55437
012 A00AA01 SBM COMPANY
012 B00AA01 85-05175
012 C01AA01 NEW ULM
012 C02AA01 MN
012 C03AA01 56073
013 A00AA01 DELOITTE & TOUCHE LLP
<PAGE> PAGE 2
013 B01AA01 MINNEAPOLIS
013 B02AA01 MN
013 B03AA01 55402
015 A00AA01 NORWEST BANK MINNEAPOLIS, N.A.
015 B00AA01 C
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022 B000001 41-0451159
022 C000001 16330
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022 B000002 13-2638166
022 C000002 485
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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080 A00AA00 ST. PAUL FIRE & MARINE INSURANCE CO.
080 C00AA00 5000
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<PAGE> PAGE 9
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SIGNATURE K.O. MARTENS
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEMI-ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000780113
<NAME> STATE BOND INCOME FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> STATE BOND U.S. GOVT. & AGENCY SEUCRITIES FUND PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 14,300,467
<INVESTMENTS-AT-VALUE> 13,767,867
<RECEIVABLES> 88,713
<ASSETS-OTHER> 500
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,954,502
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 80,258
<TOTAL-LIABILITIES> 80,258
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,442,621
<SHARES-COMMON-STOCK> 2,813,231
<SHARES-COMMON-PRIOR> 2,857,744
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (35,550)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (532,827)
<NET-ASSETS> 13,874,244
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 519,631
<OTHER-INCOME> 0
<EXPENSES-NET> 67,190
<NET-INVESTMENT-INCOME> 452,441
<REALIZED-GAINS-CURRENT> (36,001)
<APPREC-INCREASE-CURRENT> 654,685
<NET-CHANGE-FROM-OPS> 1,071,125
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 452,441
<DISTRIBUTIONS-OF-GAINS> 58,624
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 216,776
<NUMBER-OF-SHARES-REDEEMED> 332,025
<SHARES-REINVESTED> 70,736
<NET-CHANGE-IN-ASSETS> 350,451
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 59,075
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 88,373
<AVERAGE-NET-ASSETS> 13,602,361
<PER-SHARE-NAV-BEGIN> 4.73
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> .16
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 4.93
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
77.C
On May 15, 1995, the shareholders of the Fund approved a new Investment
Advisory and Management Agreement with ARM Capital Advisors, Inc., effective
June 14, 1995. In addition, effective June 14, 1995, the Fund's shareholders
elected the following persons as the members of the Board of Directors of the
Fund:
William B. Faulkner
Patrick M. Finley
Chris L. Mahai
John R. Lindholm
Arthur J. Gartland
John Katz
Theodore S. Rosky
77.H
Pursuant to an Amended and Restated Stock and Asset Purchase Agreement
dated as of February 16, 1995, between SBM Company, the former Manager of the
State Bond Group of Mutual Funds ("SBM") and ARM Financial Group, Inc., a
Deleware corporation ("ARM"), the Manager sold substantially all of its business
operations to ARM, effective June 14, 1995 (the "Transaction"). As part of the
Transaction, a subsidiary of ARM, ARM Capital Advisors, Inc. assumed the
responsibilities of SBM as investment adviser to the Fund. In addition, ARM
acquired all of the outstanding common stock of SBM Financial Services, Inc.,
the Distributor for the Fund.
ARM is a financial services company providing retail and institutional
products and services to the long-term savings and retirement market. The Morgan
Stanley Leveraged Equity Fund II, L.P., Morgan Stanley Capital Partners III,
L.P., Morgan Stanley Capital Investors, L.P., and MSCP III 892 Investors, L.P.,
investment funds sponsored by subsidiaries of Morgan Stanley Group Inc. (Morgan
Stanley), own approximately 91% of the outstanding shares of voting stock of
ARM.
c:\stewart\77.c&H
