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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE STEPHEN P. TOOLEY
TITLE COMPTROLLER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000080941
<NAME> VCA-2
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 569,666,006
<INVESTMENTS-AT-VALUE> 783,378,230
<RECEIVABLES> 4,947,975
<ASSETS-OTHER> 832
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 788,327,037
<PAYABLE-FOR-SECURITIES> 2,509,980
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 660,461
<TOTAL-LIABILITIES> 3,170,441
<NET-ASSETS> 785,156,596
<DIVIDEND-INCOME> 6,840,490
<INTEREST-INCOME> 1,395,390
<OTHER-INCOME> 0
<EXPENSES-NET> 3,351,395
<NET-INVESTMENT-INCOME> 4,884,485
<REALIZED-GAINS-CURRENT> 147,369,906
<APPREC-INCREASE-CURRENT> 43,649,467
<NET-CHANGE-FROM-OPS> 195,903,858
<PURCHASE PAYMENTS AND TRANSFERS IN> 37,581,652
<WITHDRAWALS AND TRANSFERS OUT> (78,957,956)
<ANN. ADMIN. CHARGES DED. FROM ACC. ACCT (28,266)
<OTHER EXPENSES> (4,219,033)
<NET-CHANGE-IN-ASSETS> 150,280,255
<GROSS-ADVISORY-FEES> 868,606
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,351,395
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</TABLE>
February 18, 1998
To the Committee and Participants
of The Prudential Variable Contract Account - 2
of The Prudential Insurance Company of America
In planning and performing our audit of the
financial statements of The Prudential Variable
Contract Account - 2 of The Prudential
Insurance Company of America (the "Account")
for the year ended December 31, 1997, we
considered its internal control, including
control activities for safeguarding securities,
in order to determine our auditing procedures
for the purpose of expressing our opinion on
the financial statements and to comply with the
requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Account 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 control activities.
Generally, control activities 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 control activities include
the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal
control, errors or irregularities may occur and
not be detected. Also, projection of any
evaluation of internal control to future
periods is subject to the risk that it may
become inadequate because of changes in
conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of 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 any specific internal control
components does not reduce to a relatively low
level the risk that errors or irregularities in
amounts that would be material in relation to
the financial statements being audited may
occur and not be detected within a timely
period by employees in the normal course of
performing their assigned functions. However,
we noted no matters involving internal control,
including control activities for safeguarding
securities, that we consider to be material
weaknesses as defined above as of December 31,
1997.
This report is intended solely for the
information and use of management and the
Committee of the Account and the Securities and
Exchange Commission.
PRICE WATERHOUSE LLP
e:\flh\vca2\nsar.GT
This report is signed on behalf of the
Registrant in the City of Newark and State of
New Jersey on the 23th day of February, 1998.
The Prudential Variable Contract Account-2
Witness: /s/ Caren Cunningham By:
/s/ Grace Torres
Caren Cunningham Grace
Torres
Assistant Secretary
Treasurer
T:\flh\vca2\nsar77d
For the fiscal period ended (s) 12/31/97
File number 811-01612
SUB-ITEM 77-D
EXHIBITS
Policies with respect to security
investment
When conditions dictate a temporary
defensive strategy or during temporary periods
of portfolio structuring and restructuring, the
The Prudential Variable Contract Account-2 (the
Account) may invest in money market instruments
without limit. The Account may invest in high
quality money market instruments, including but
not limited to commercial paper, certificates of
deposit, bankers' acceptances and time deposits
of banks, and obligations issued or guaranteed
by the U.S. Government, its agencies and
instrumentalities. Commercial paper will be
rated, at the time of investment, at least A-2
by Standard & Poor's Ratings Service or Prime-2
by Moody's Investor Services, or if not rated,
of comparable quality in the judgment of the
Account's investment adviser.
T:\flh\vca2\nsar77-o
For the fiscal period ended (s) 12/31/97
File number 811-01612
SUB-ITEM 77-0
EXHIBITS
Transactions Effected Pursuant to
Rule 10f-3
1. Name of Issuer
Reliance Steel
2. Date of Purchase
11/5/97
3. Number of Securities Purchased
179,967
4. Dollar Amount of Purchase
$4,972,500
5. Price Per Unit
$27.63
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Donaldson, Lufkin and Jenrette
7. Other Members of the Underwriting
Syndicate
See Exhibit A
EXHIBIT A
UNDERWRITERS
Donaldson Lufkin & Jenrette Securities
Corporation
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
