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SIGNATURE JIM ARNOLD
TITLE ADMINISTRATOR
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000794801
<NAME> THE PRIMARY TREND FUND, INC.
<S> <C>
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<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 19,519,580
<INVESTMENTS-AT-VALUE> 23,689,485
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</TABLE>
Report of Independent Auditors
To the Shareholders and Board of Directors of
The Primary Trend Fund, Inc. and The Primary Income Funds, Inc.
In planning and performing our audit of the
financial statements of The Primary Trend Fund, Inc. and
The Primary Income
Funds, Inc. (comprised of the Primary Income Fund and
the Primary U.S. Government Fund), collectively,
the "Funds", for the
year ended June 30, 1998, we considered its
internal control, including control activities
for safeguarding securities, in order to
determine our auditing procedures for the
purpose of expressing our opinion on the
financial statements and to comply with the
requirements of Form N-SAR, and not to provide
assurance on the internal control.
The management of the Funds is responsible for
establishing and maintaining internal control.
In fulfilling this responsibility,
estimates and judgments by management are
required to assess the expected benefits and related
costs of controls. Generally,
controls that are relevant to an audit pertain to
the entity's objective of preparing financial
statements for external purposes that
are fairly presented in conformity with
generally accepted accounting principles.
Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control,
errors or fraud may occur and not be detected.
Also, projection of any
evaluation of internal control to future periods is
subject to the risk that it may become inadequate
because of changes in
conditions or that the effectiveness of the design
and operation may deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in internal control that
might be material
weaknesses under standards established by the American
Institute of Certified Public Accountants. A material
weakness is a
condition in which the design or operation of one or
more of the specific internal control components does
not reduce to a
relatively low level the risk that errors or fraud in
amounts that would be material in relation to the
financial statements being
audited may occur and not be detected within a timely
period by employees in the normal course of performing
their assigned
functions. However, we noted no matters involving
internal control and its operation, including controls
for safeguarding
securities, that we consider to be material weaknesses
as defined above at June 30, 1998.
This report is intended solely for the information
and use of the board of directors and management of
The Primary Trend
Fund, Inc. and The Primary Income Funds, Inc. and
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
July 24, 1998
Exhibit to Accompany
Item 77C
Form N-SAR
The Primary Trend Funds, Inc.
(the "Funds")
RESULTS OF SHAREHOLDER MEETING
A special meeting of the shareholders of the Funds was
held on April 29, 1998 for the sole purpose of electing
directors. Barry S. Arnold, Lilli Gust, Clark J. Hillery and
Harold L. Holtz were elected directors of the Funds by
shareholders of record as of March 25, 1998. The results of
the vote were as follows:
FOR All
Directors
Withheld
The Primary Trend
Fund, Inc.
1,103,054
15,563
The Primary
Income Funds, Inc.
312,083
485
Exhibit to Accompany
Item 77J
Form N-SAR
The Primary Trend Fund, Inc.
(the "Fund")
According to the provisions of Statement of Position 93
- - - 2 (SOP 93 - 2) "Determination, Disclosure and
Financial Statement Presentation of Income, Capital
Gain and Return of Capital Distributions by Investment
Companies," the Fund is required to report the
accumulated net investment income (loss) and
accumulated net capital gain (loss) accounts to
approximate amounts available for future distributions
on a tax basis (or to offset future realized capital gains).
Accordingly, at June 30, 1998, a reclassification was
made to decrease undistributed net realized gains and to
increase undistributed net investment income by $590
for the Fund.
This reclassification has no impact on the net asset
value of the Fund and is designed to present the Fund's
capital account on a tax basis.
sl
K:\PRIMARY\Other\1998\1998 NSAR-A ITEM77JB.DOC
08/21/98
