PRAIRIE MUNICIPAL BOND FUND INC, 485BPOS, 1995-06-01

PRAIRIE MUNICIPAL BOND FUND INC
485BPOS, 1995-06-01

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Registration Nos. 33-18954
811-5414
================================================================
============
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. 13 /X/

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940/X/

Amendment No. 13 /X/

(Check appropriate box or boxes)

PRAIRIE MUNICIPAL BOND FUND, INC.
(formerly, First Prairie Tax Exempt Bond Fund, Inc.)
(Exact Name of Registrant as Specified in Charter)

c/o First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670 60670
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (312) 732-
4231

Bradford M. Markham, Esq.
c/o The First National Bank of Chicago
Three First National Plaza
Chicago, Illinois 60670
(Name and Address of Agent for Service)

copy to:

Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696

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

X immediately upon filing pursuant to paragraph (b)

on (date) pursuant to paragraph (b)

____ 60 days after filing pursuant to paragraph (a)(i)

____ on (date) pursuant to paragraph (a)(i)

____ 75 days after filing pursuant to paragraph (a)(ii)

____ on (date) pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

____ this post-effective amendment designates a new
effective date
for a previously filed post-effective amendment.

Registrant has registered an indefinite number of its shares of
Beneficial Interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940.
Registrant's Rule 24f-2 Notice for its fiscal year ended
February 28, 1995 was filed on or about April 28, 1995.

<PAGE>
Cross-Reference Sheet Pursuant to Rule 495(a)

Items in
Part A of
Form N-1A Caption Page

1 Cover Page Cover

2 Synopsis 4

3 Condensed Financial Information 6

4 General Description of Registrant 10, 26

5 Management of the Fund 17

5(a) Management's Discussion of Fund's *
Performance

6 Capital Stock and Other Securities 26

7 Purchase of Securities Being Offered 19

8 Redemption or Repurchase 21

9 Pending Legal Proceedings *

Items in
Part B of
Form N-1A

10 Cover Page B-1

11 Table of Contents B-1

12 General Information and History *

13 Investment Objectives and Policies B-2

14 Management of the Fund B-23

15 Control Persons and Principal Holders
of Securities B-26

16 Investment Advisory and Other Services B-26

17 Brokerage Allocation B-43

Items in
Part B of
Form N-1A Caption Page

18 Capital Stock and Other Securities B-52

19 Purchase, Redemption and Pricing of
Securities Being Offered B-34

20 Tax Status B-44

21 Underwriters B-1

22 Calculations of Performance Data B-47

23 Financial Statements B-65

Items in
Part C of
Form N-1A

24 Financial Statements and Exhibits C-1

25 Persons Controlled by or Under Common
Control with Registrant C-2

26 Number of Holders of Securities C-2

27 Indemnification C-3

28 Business and Other Connections of
Investment Adviser C-3

29 Principal Underwriters C-4

30 Location of Accounts and Records C-4

31 Management Services C-4

32 Undertakings C-4

- ---------
*Omitted since answer is negative or inapplicable.
<PAGE>
PRAIRIE FUNDS

Supplement to Prospectus Dated June 1, 1995
FOR USE IN MISSOURI

The following supplements and should be read in
conjunction with the disclosure contained in the Prospectus
under the caption "Description of the Funds--Risk Factors."

The Asset Allocation Funds, Equity Funds, Bond
Funds and, to a limited extent, Money Market Fund may use
investment techniques such as leverage through borrowing and,
except for the Money Market Fund, short-selling, which involves
greater risk than that incurred by other funds with similar
investment objectives that do not engage in such techniques.
The use of these investment techniques may produce higher than
normal portfolio turnover which would result in comparatively
greater brokerage commissions or transaction costs.

The Asset Allocation Funds, Equity Income Fund,
Growth Fund, Special Opportunities Fund, Bond Fund and
International Bond Fund may purchase, to the extent described in
the Prospectus, debt securities rated lower than investment
grade by nationally recognized statistical rating organizations.
These debt securities may be subject to certain risks with
respect to the issuing entity than certain lower yielding,
higher rated securities.
<PAGE>

PRAIRIE FUNDS

Supplement to Prospectus Dated June 1, 1995
FOR USE IN OHIO

The following supplements and should be read in
conjunction with the disclosure contained in the Funds'
Prospectus under the caption "Description of the Funds."

The Asset Allocation, Equity, Bond and, to a
limited extent, Money Market Funds may use investment techniques
such as leverage through borrowing, which involves greater risk
than that incurred by many other funds with similar objectives
that do not engage in such techniques.

The Funds' management policies permit the Funds
to exceed the diversification limitations imposed by Ohio
statute, which prohibits a fund, with respect to 50% of its
total assets, from investing more than 5% of its total assets in
the securities of any one issuer and, as to the remaining 50% of
such fund's total assets, from investing more than 25% of such
assets in the securities of any one issuer. See "Description of
the Funds--Risk Factors--Other Investment Considerations."

The Non-Diversified Funds also may exceed
diversification limitations imposed by Ohio statute, which
prohibit a fund from purchasing the securities of any issuer if,
with respect to 75% of its total assets at the time of purchase,
more than 10% of the voting securities of any issuer would be
held by the fund. See "Description of the Funds--Risk
Factors--Other Investment Considerations."

In addition, each Fund intends to treat
restricted securities for which a substantial market of
qualified institutional buyers develops pursuant to Rule 144A
under the Securities Act of 1933, as amended, as liquid
securities. As a result, each Fund may exceed limitations
imposed by Ohio statute on the purchase of restricted securities
which are deemed to include Rule 144A securities. See
"Appendix--Certain Portfolio Securities --Illiquid Securities."

<PAGE>

Prospectus JUNE 1, 1995 [PRAIRIE FUNDS LOGO]

The Prairie Funds are open-end, management investment companies.
Through this Prospectus, investors may invest in any of 14
separate funds (the "Funds"), divided into five general fund
types: Asset Allocation; Equity; Bond; Municipal Bond; and Money
Market.

First Chicago Investment Management Company ("FCIMCO" or the
"Investment Adviser") serves as each Fund's investment adviser
and administrator. The Investment Adviser has engaged ANB
Investment Management and Trust Company ("ANB-IMC") to serve as
sub-investment adviser to the International Equity Fund and to
provide day-to-day management of that Fund's investments.

Concord Financial Group, Inc. (the "Distributor") serves as
each Fund's distributor.

By this Prospectus, Class A shares of each Fund, Class B
shares of each Fund other than the U.S. Government Money Market
and Municipal Money Market Funds, and Class I shares of each
Fund other than the Money Market Funds, are being offered.

Class A shares of each Fund, other than the Money Market
Funds, are subject to a sales charge imposed at the time of
purchase and Class B shares of each such Fund are subject to a
contingent deferred sales charge imposed on redemptions made
within up to six years of purchase. Class A and Class B shares
are offered to any investor. Each Fund offers these alternatives
to permit an investor to choose the method of purchasing shares
that is most beneficial given the amount of the purchase, the
length of time the investor expects to hold the shares and other
circumstances. Class B shares of the Money Market Fund may be
acquired only through the exchange of Class B shares of the
other Funds.

Class I shares are offered without a sales charge and are
sold only to qualified trust, custody and/or agency account
clients of The First National Bank of Chicago ("FNBC"), American
National Bank and Trust Company ("ANB") or their affiliates and
to certain qualified employee benefit plans or other programs.

Other differences between the Classes include the services
offered to and expenses borne by each Class and certain voting
rights, as described herein.

Fund shares are not deposits or obligations of, or guaranteed
by, any bank, and are not federally insured by the Federal
Deposit Insurance Corporation ("FDIC"), the Federal Reserve
Board, or any other agency. Fund shares involve certain
investment risks, including the possible loss of principal. For
all Funds other than the Money Market Funds, investors should
recognize that the share price, yield and investment return of
each Fund fluctuate and are not guaranteed.

For the Money Market Funds, investors should recognize that
an investment in a Money Market Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance
that the Money Market Funds will be able to maintain a stable
net asset value of $1.00 per share.

This Prospectus sets forth concisely information about the Funds
that an investor should know before investing. It should be read
and retained for future reference.

The Statement of Additional Information, dated June 1, 1995,
which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters
which may be of interest to some investors. It has been filed
with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write to the Prairie Funds
at Three First National Plaza, Chicago, Illinois 60670, or call
1-800-224-4800.

ASSET ALLOCATION FUNDS

The Managed Assets Income Fund
The Managed Assets Fund

EQUITY FUNDS

The Equity Income Fund
The Growth Fund
The Special Opportunities Fund
The International Equity Fund

BOND FUNDS

The Intermediate Bond Fund
The Bond Fund
The International Bond Fund

MUNICIPAL BOND FUNDS

The Intermediate Municipal Bond Fund
The Municipal Bond Fund

MONEY MARKET FUNDS

The U.S. Government Money Market Fund
The Money Market Fund
The Municipal Money Market Fund

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
Table of Contents
4 Fee Table

6 Condensed Financial Information

15 Highlights

18 Description of the Funds

24 Risk Factors

27 Alternative Purchase Methods

28 How to Buy Shares

31 Shareholder Services

33 How to Redeem Shares

35 Management of the Funds

37 Distribution Plans and Shareholder Services Plans

37 Dividends, Distributions and Taxes

38 Performance Information

39 General Information

A-1 Appendix

The Prairie Funds

ASSET ALLOCATION FUNDS

These Funds will follow an asset allocation strategy by
investing in equity securities, fixed-income securities and
short-term instruments of domestic and foreign issuers:

The Managed Assets Income Fund

seeks to maximize current income; capital appreciation is a
secondary, but nonetheless important, goal.

The Managed Assets Fund

seeks to maximize total return, consisting of capital
appreciation and current income, without assuming undue risk.
<PAGE>
EQUITY FUNDS

These Funds will invest principally in equity securities:

The Equity Income Fund

seeks to provide income; capital appreciation and growth of
earnings are secondary, but nonetheless important, goals. This
Fund will invest primarily in income-producing equity securities
of domestic issuers.

The Growth Fund

seeks long-term capital appreciation. This Fund will invest
primarily in equity securities of domestic issuers believed by
the Fund's investment adviser to have above-average growth
characteristics.

The Special Opportunities Fund

seeks long-term capital appreciation. This Fund will invest
primarily in equity securities of small- to medium-sized
emerging growth domestic issuers that the Fund's investment
adviser believes are undervalued in the marketplace.

The International Equity Fund

seeks long-term capital appreciation. This Fund will invest
primarily in equity securities of foreign issuers.

BOND FUNDS

These Funds will invest principally in fixed-income securities:

The Intermediate Bond Fund

seeks to provide as high a level of current income as is
consistent with the preservation of capital. This Fund will
invest primarily in a portfolio of U.S. dollar denominated
investment grade fixed-income securities of domestic and foreign
issuers which, under normal market conditions, will have a
dollar-weighted average maturity expected to range between three
and ten years.

The Bond Fund

seeks to provide as high a level of current income as is
consistent with the preservation of capital. This Fund will
invest in a portfolio of U.S. dollar denominated investment
grade fixed-income securities of domestic and foreign issuers,
without regard to maturity.

The International Bond Fund

seeks to provide both long-term capital appreciation and current
income. This Fund will invest primarily in investment grade debt
securities of foreign issuers.

MUNICIPAL BOND FUND

These Funds will invest principally in Municipal Obligations:

The Intermediate Municipal Bond Fund

seeks to provide as high a level of current income exempt from
Federal income tax as is consistent with the preservation of
capital. This Fund will invest primarily in a portfolio of
investment grade Municipal Obligations which, under normal
conditions, will have a dollar-weighted average maturity
expected to range between three and ten years.

The Municipal Bond Fund

MONEY MARKET FUNDS

These Funds will invest in various kinds of money market
instruments and will seek a stable net asset value of $1.00 per
share:

The U.S. Government Money Market Fund

seeks to provide as high a level of current income as is
consistent with the preservation of capital and the maintenance
of liquidity. This Fund will invest only in short-term
securities issued or guaranteed as to principal or interest by
the U.S. Government, its agencies and instrumentalities, and
repurchase agreements in respect of such securities.

The Money Market Fund

seeks to provide as high a level of current income as is
consistent with the preservation of capital and the maintenance
of liquidity. This Fund will invest in short-term money market
instruments.

The Municipal Money Market Fund

seeks to provide as high a level of current income exempt from
Federal income tax as is consistent with the preservation of
capital and the maintenance of liquidity. This Fund will invest
in short-term Municipal Obligations.
<PAGE>
Fee Table
<TABLE>
<CAPTION>
Class A Class B Class I
All Other
Money All Funds All Funds
SHAREHOLDER Market Intermediate Other Intermediate Offering Offering
TRANSACTION EXPENSES Funds Bond Funds Funds Bond Funds Class B Class I
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge
Imposed On Purchases
(as a percentage of
offering price) None 3.00% 4.50% None None None

Sales Charge On
Reinvested Dividends None None None None None None

Maximum Deferred Sales
Charge Imposed on Redemptions
(as a percentage of the
amount subject to charge) None None* None* 3.00% 5.00% None

Redemption Fees None None None None None None

Exchange Fees None None None None None None
</TABLE>

* A contingent deferred sales charge of up to 1.00% may be
assessed on certain redemptions of Class A shares purchased
without an initial sales charge as part of an investment of
$1 million or more.

ANNUAL FUND OPERATING EXPENSES

(as a percentage of average daily net assets)

Class A Shares
<TABLE>
<CAPTION>
Example
An investor would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:

Total
Management 12b-1 Other Operating
Fees* Fees Expenses* Expenses* 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:

Managed Assets Income Fund .27% none .78% 1.05% $55 $77 $100 $167

Managed Assets Fund .00% none 1.05% 1.05% $55 $77 $100 $167

EQUITY FUNDS:

Equity Income Fund .47% none .43% .90% $54 $72 $93 $151

Growth Fund .63% none .42% 1.05% $55 $77 $100 $167

Special Opportunities Fund .47% none .63% 1.10% $56 $78 $103 $173

International Equity Fund .59% none .71% 1.30% $58 $84 $113 $194

BOND FUNDS:

Intermediate Bond Fund .31% none .49% .80% $38 $55 $73 $126

Bond Fund .43% none .52% .95% $54 $74 $95 $156

International Bond Fund .00% none 1.20% 1.20% $57 $81 $108 $183

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .39% none .41% .80% $38 $55 $73 $126

Municipal Bond Fund .36% none .44% .80% $53 $69 $87 $139

MONEY MARKET FUNDS:

U.S. Government Money Market Fund .08% none .72% .80% $8 $26 $44 $99

Money Market Fund .26% none .54% .80% $8 $26 $44 $99

Municipal Money Market Fund .21% none .49% .70% $7 $22 $39 $87

</TABLE>

* After expense reimbursements or fee waivers.

Class B Shares
<TABLE>

Example
An investor would pay the following
expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) except where noted,
redemption at the end of each
time period:

<CAPTION>
Total
Management 12b-1 Other Operating
Fees* Fees Expenses* Expenses* 1 Year 3 Years 5 Years 10 Years+
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Managed Assets Income Fund .27% .75% .78% 1.80% $70/$18** $89/57** $121/$97** $182

Managed Assets Fund .00% .75% 1.05% 1.80% $70/18** $89/$57** $121/$97** $182

EQUITY FUNDS:

Equity Income Fund .47% .75% .43% 1.65% $68/$17** $85/$52** $113/$90** $165

Growth Fund .63% .75% .42% 1.80% $70/$18** $89/$57** $121/$97** $182

Special Opportunities Fund .47% .75% .63% 1.85% $70/$19** $91/$58** $123/$100** $187

International Equity Fund .59% .75% .71% 2.05% $72/$21** $97/$64** $133/$110** $209

BONDS FUNDS:

Intermediate Bond Fund .39% .75% .49% 1.55% $47/$16** $71/$49** $96/$84** $154

Bond Fund .43% .75% .52% 1.70% $69/$17** $86/54** $116/$92** $171

International Bond Fund .00% .75% 1.20% 1.95% $71/$20** $94/$61** $128/$105** $198

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .39% .75% .41% 1.55% $47/$16** $71/$49** $96/$84** $154

Municipal Bond Fund .36% .75% .44% 1.55% $67/$16** $82/49** $108/$84** $154

MONEY MARKET FUNDS:

Money Market Fund .26% .75% .54% 1.55% $16 $49 $84 $154

</TABLE>

* After expense reimbursements or fee waivers.

** Assuming no redemption of Class B shares.

+ Ten-year figures assume conversion of Class B shares to Class
A shares.

Class I Shares
<TABLE>

Example
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:

<CAPTION>
Total
Management 12b-1 Other Operating
Fees* Fees Expenses* Expenses* 1 Year 3 Years 5 Years 10 Years

<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:

Managed Assets Income Fund .27% none .53% .80% $8 $26 $44 $99

Managed Assets Fund .00% none .80% .80% $8 $26 $44 $99

EQUITY FUNDS:

Equity Income Fund .47% none .18% .65% $7 $21 $36 $81

Growth Fund .63% none .17% .80% $8 $26 $44 $99

Special Opportunities Fund .47% none .38% .85% $9 $27 $47 $105

International Equity Fund .59% none .46% 1.05% $11 $33 $58 $128

BOND FUNDS:

Intermediate Bond Fund .31% none .24% .55% $6 $18 $31 $69

Bond Fund .43% none .27% .70% $7 $22 $39 $87

International Bond Fund .00% none .95% .95% $10 $30 $52 $116

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .39% none .16% .55% $6 $18 $31 $69

Municipal Bond Fund .36% none .19% .55% $6 $18 $31 $69

</TABLE>

* After expense reimbursements or fee waivers.

The amounts listed in the examples should not be considered as
representative of past or future expenses and actual expenses
may be greater or less than those indicated. Moreover, while
each example assumes a 5% annual return, a Fund's actual
performance will vary and may result in an actual return greater
or less than 5%.

The purpose of the foregoing tables is to assist investors in
understanding the various costs and expenses that investors in a
Fund will bear, directly or indirectly, the payment of which
will reduce investors' return on an annual basis. Long-term
investors in Class B shares of a Fund could pay more in 12b-1
fees than the economic equivalent of paying a front-end sales
charge. FCIMO, FNBC, ANB and their affiliates and certain
Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees
are not reflected in the foregoing table. See "How
to Buy Shares," "Management of the Funds" and "Distribution
Plans and Shareholder Services Plans." Other Expenses and Total
Operating Expenses for each Fund, other than the Intermediate
Bond Fund and Municipal Bond Fund, are based on estimated
amounts for the current fiscal year. With respect to each Fund,
the Investment Adviser has undertaken until at least September
1, 1995 that if, in any fiscal year, certain expenses of the
Fund, including the investment advisory fee, exceed the Total
Operating Expenses noted in the tables below for such Fund, the
Investment Adviser may waive a portion of its investment
advisory fee or bear certain other expenses to the extent
of such excess expense.

The Annual Fund Operating Expenses noted in the foregoing tables
for each Fund, without expense reimbursements or fee waivers,
and the maximum Total Operating Expenses a Fund may incur
pursuant to the Investment Adviser's undertaking are as follows:

Class A Shares

Total
Maxmimum Total
Management 12b-1 Other Operating Operating Expenses
Fees Fees Expenses Expenses Pursuant to Undertaking
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:

Managed Assets Income Fund .65% none .87% 1.52% 1.31%

Managed Assets Fund .65% none 1.05% 1.70% 1.33%

EQUITY FUNDS:

Equity Income Fund .50% none .52% 1.02% 1.18%

Growth Fund .65% none .51% 1.16% 1.33%

Special Opportunities Fund .70% none .72% 1.42% 1.38%

International Equity Fund .80% none .80% 1.60% 1.58%

BOND FUNDS:

Intermediate Bond Fund .40% none .58% .98% 1.15%

Bond Fund .55% none .61% 1.16% 1.23%

International Bond Fund .70% none 1.20% 1.90% 1.48%

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .40% none .50% .90% .90%

Municipal Bond Fund .40% none .53% .93% 1.08%

MONEY MARKET FUNDS:

U.S. Government Money Market Fund .40% none .81% 1.21% .88%

Money Market Fund .40% none .63% 1.03% .99%

Municipal Money Market Fund .40% none .58% .98% .95%

</TABLE>

Class B Shares
Total Maxmimum Total
Management 12b-1 Other Operating Operating Expenses
Fees Fees Expenses Expenses Pursuant to Undertaking
<S> <C> <C> <C> <C> <C>
Managed Assets Income Fund .65% .75% .87% 2.27% 2.06%

Managed Assets Fund .65% .75% 1.05% 2.45% 2.08%

EQUITY FUNDS:

Equity Income Fund .50% .75% .52% 1.77% 1.93%

Growth Fund .65% .75% .51% 1.91% 2.08%

Special Opportunities Fund .70% .75% .72% 2.17% 2.13%

International Equity Fund .80% .75% .80% 2.35% 2.33%
BONDS FUNDS:

Intermediate Bond Fund .40% .75% .58% 1.73% 1.90%

Bond Fund .55% .75% .61% 1.91% 1.98%

International Bond Fund .70% .75% 1.20% 2.65% 2.23%

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .40% .75% .50% 1.65% 1.83%

Municipal Bond Fund .40% .75% .53% 1.68% 1.83%

MONEY MARKET FUNDS:

Money Market Fund .40% .75% .63% 1.78% 1.74%

</TABLE>

Class I Shares

Total Maximum Total
Management 12b-1 Other Operating Operating Expenses
Fees Fees Expenses Expenses Pursuant to Undertaking
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:

Managed Assets Income Fund .65% none .62% 1.27% .80%

Managed Assets Fund .65% none .80% 1.45% .80%

EQUITY FUNDS:

Equity Income Fund .50% none .27% .77% .65%

Growth Fund .65% none .26% .91% .80%

Special Opportunities Fund .70% none .47% 1.17% .85%

International Equity Fund .80% none .55% 1.35% 1.05%

BOND FUNDS:

Intermediate Bond Fund .40% none .33% .73% .55%

Bond Fund .55% none .36% .91% .70%

International Bond Fund .70% none .95% 1.65% .95%

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund .40% none .25% .65% .55%

Municipal Bond Fund .40% none .28% .68% .55%

</TABLE>

<PAGE>

CONDENSED FINANCIAL INFORMATION

The information in the following tables has been audited (except
where noted) by Ernst & Young LLP, each Fund's independent
auditors, whose reports thereon appear in the Statement of
Additional Information. Further financial data and related notes
are included in the Statement of Additional Information,
available upon request.

Financial Highlights

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for Class A and Class B of First Prairie
Diversified Asset Fund (the predecessor fund of the Managed
Assets Income Fund). This information has been derived from
information provided in First Prairie Diversified Asset Fund's
financial statements. As of the date of the financial
statements, Class I shares had not been offered and,
accordingly, no financial data are available for such Class.

<PAGE>
MANAGED ASSETS INCOME FUND(1):
<TABLE>
<CAPTION>

Class A
Fiscal Year Ended December 31,

PER SHARE DATA: 1986(2) 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
period. . . . . . . . . . $ 10.00 $ 10.75 $ 9.73 $ 10.66 $ 11.54 $ 10.79 $ 12.56 $ 12.68 $13.11

Investment Operations:

Investment income--net . . . .63 .70 .78 .88 .86 .83 .79 .72 .73

Net realized and unrealized
gain (loss) on investments .70 (.85) .92 1.10 (.54) 1.77 .26 .61 (.98)

Total from Investment
Operations . . . . . . . . 1.33 (.15) 1.70 1.98 .32 2.60 1.05 1.33 (.25)

Distributions:

Dividends from Investment
income-net. . . . . . . . . (.58) (.77) (.74) (.89) (.88) (.83) (.77) (.72) (.72)

Dividends from net realized
gain on investments . . . . -- (.10) (.03) (.21) (.19) -- (.16) (.18) (.01)

Total Distributions . . . (.58) (.87) (.77) (1.10) (1.07) (.83) (.93) (.90) (.73)

Net asset value, end of
period . . . . . . . . . . . $ 10.75 $ 9.73 $ 10.66 $ 11.54 $ 10.79 $ 12.56 $ 12.68 $ 13.11 $ 12.13

TOTAL INVESTMENT RETURN(3) 13.59%(4) (1.73%) 17.78% 19.08% 2.94% 24.87% 8.68% 10.70% (1.92%)

RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to
average net assets . . . . -- -- -- -- -- -- .02% .39% .63%

Ratio of net investment
income to average net
assets . . . . . . . . . . 5.90%(4) 6.61% 7.38% 7.74% 7.71% 7.04% 6.24% 5.54% 5.77%

Decrease reflected in above
expense ratios due to
undertakings . . . . . . . . 1.41%(4) 2.69% 2.62% 2.96% 2.58% 2.16% 1.86% 1.26% 1.04%

Portfolio Turnover Rate . . . . 15.19%(4) 23.99% 15.71% 49.46% 29.97% 26.02% 22.14% 16.40% 28.69%

Net Assets, end of period
(000's Omitted) . . . . . . . . $2,212 $4,989 $5,900 $7,407 $8,950 $14,038 $34,262 $51,586 $44,367

</TABLE>

_______________________

(1) On March 3, 1995, all of the assets and liabilities of
First Prairie Diversified Asset Fund were transferred to
the Managed Assets Income Fund in exchange for Class A
shares of the Managed Assets Income Fund. The financial
data provided above is for First Prairie Diversified Asset
Fund.
(2) From January 23, 1986 (commencement of operations) to
December 31, 1986.
(3) Exclusive of sales load.
(4) Not annualized.
(5) For the period February 8, 1994 (initial offering date)
through December 2, 1994. On December 2, 1994, the Fund
terminated its offering of the then-existing Class B shares
and converted Class B shares outstanding at that time to
Class A shares. The Fund commenced offering Class B shares
under the current sales load structure after the date of
the financials.
(6) Conversion to Class A shares. See note 5 above.

Class B
Fiscal Period Ended December 2, 1994(5)
PER SHARE DATA:
<S> <C>
Net asset value, beginning
period . . . . . . . . . . $ 13.05

Investment Operations:

Investment income--net . . . .51

Net realized and unrealized
gain (loss) on investments . . . . (.91)

Total from Investment
Operations . . . . . . . . . (.40)

Distributions:

Dividends from investment
income--net . . . . . . . . . (.54)

Dividends from net realized
gain on investments. . . . . (.01)

Total Distributions. . . . . (.55)

Net asset value, end of
period . . . . . . . . . . . . $12.10(6)

TOTAL INVESTMENT RETURN(3) (3.13%)(4)

RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to
average net assets. . . . . . . 1.21%(4)

Ratio of net investment
income to average net
assets . . . . . . . . . . . . . 4.10%(4)

Decrease reflected in above
expense ratio due to
undertakings . . . . . . . . . . .96%(4)

Portfolio Turnover Rate . . . . . . 28.69%(4)

Net Assets, end of period
(000's Omitted) . . . . . . . . . . $ --

</TABLE>

______________________

<PAGE>

Financial Highlights

INTERMEDIATE BOND FUND(1):
<TABLE>
<CAPTION>
Class A Class B Class I(2)

Fiscal Fiscal Fiscal Fiscal Fiscal
Period Ended Year Ended Period Ended Period Ended Year Ended
January 31, January 31, December 2, January 31, January 31,

PER SHARE DATA: 1994(3) 1995 1994(4) 1994(3) 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $8.36 $8.25 $8.16 $8.36 $8.25

INVESTMENT OPERATIONS:

Investment income-net 0.47 0.52 0.40 0.47 0.52

Net realized and unrealized
(loss) on investments (0.09) (0.57) (0.55) (0.09) (0.57)

Total Gain (loss) from
Investment Operations 0.38 (0.05) (0.15) 0.38 (0.05)

DIVIDENDS AND DISTRIBUTIONS:

Dividends from investment income-net (0.47) (0.52) (0.40) (0.47) (0.52)

Distributions from net realized gain on
investments (0.02) -- -- (0.02) --

Total Dividends and Distributions (0.49) (0.52) (0.40) (0.49) (0.52)

Net asset value, end of period $8.25 $7.68 $7.61(5) $8.25 $7.68

Total Investment Return(6) 5.16%(7) (0.45%) (1.82%)(8) 5.16%(7) (0.48%)
RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to average
net assets -- 0.04% -- -- 0.04%

Ratio of net investment income
to average net assets 5.96%(7) 6.70% 6.48%(7) 6.21%(7) 6.70%

Decrease reflected in above expense
ratios due to undertakings 3.67%(7) 2.66% 2.58%(7) 2.64%(7) 2.66%

Portfolio Turnover Rate 26.54%(8) 71.65% 71.65%(8) 26.54%(8) 71.65%

Net Assets, end of period
(000's omitted) $65 $69 -- $5,128 $7,101

</TABLE>

- ----------------
(1) On January 17, 1995, the management policies of the
Intermediate Bond Fund were changed as described under
"General Information."
(2) Formerly, Class F shares.
(3) From March 5, 1993 (commencement of operations) to January
31, 1994.
(4) For the period February 8, 1994 (initial offering date)
through December 2, 1994. On December 2, 1994, the
Fund terminated its offering of the then-existing Class B
shares and converted Class B shares outstanding
at that time to Class A shares. The Fund commenced offering
Class B shares under the current sales load
structure after the date of the financials.
(5) Conversion to Class A shares. See note 4 above.
(6) Exclusive of sales charge.
(7) Annualized.
(8) Not annualized.

<PAGE>

Financial Highlights

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for Class A, Class B and Class I of the
Intermediate Series of First Municipal Bond Fund, Inc. (the
predecessor fund of the Intermediate Municipal Bond Fund) and/or
the Intermediate Municipal Bond Fund. This information has been
derived from information provided in First Prairie Municipal
Bond Fund's financial statements for its Intermediate Series. As
of the date of the financial statements, Class I shares had not
been offered and, accordingly, no financial data are available
for such Class.

<PAGE>

INTERMEDIATE MUNICIPAL BOND FUND(1):
<TABLE>
<CAPTION>

Class A
Fiscal Year Ended February 28/29,

1989(2) 1990 1991 1992 1993 1994 1995
Per Share Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $11.46 $11.43 $11.65 $11.95 $12.25 $12.79 $12.18

Investment Operations:

Investment income -- net . . . . . . . . . . . .79 .78 .80 .76 .64 .61 .55

Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . (.03) .22 .31 .37 .68 .01 (.36)

Total from Investment Operations . . . . . . .76 1.00 1.11 1.13 1.32 .62 .19

Distributions:

Dividends from investment income -- net . . . . (.79) (.78) (.80) (.76) (.64) (.61) (.55)

Dividends from net realized gain on investment . -- -- (.01) (.07) (.14) (.62) (.03)

Total Distributions . . . . . . . . . . . . . (.79) (.78) (.81) (.83) (.78) 1.23 (.58)

Net asset value, end of period . . . . . . . . . $11.43 $11.65 $11.95 $12.25 $12.79 $12.18 $11.79

Total Investment Return(3) 6.82%(4) 9.00% 9.94% 9.78% 11.26% 4.94% 1.64%

Ratios/Supplemental Data:

Ratio of expenses to average net assets . . . . -- -- -- -- -- .06% .29%

Ratio of net investment income to average net
assets . . . . . . . . . . . . . . . . . . . . . 6.83%(4) 6.62% 6.76% 6.15% 5.16% 4.78% 4.73%

Decrease reflected in above expense ratios
due to undertakings . . . . . . . . . . . . . . . 2.25%(4) 2.75% 2.75% 1.72% 1.31% 1.21% 1.09%

Portfolio Turnover Rate . . . . . . . . . . . . . 101.17%(5) 46.68% 12.22% 86.91% 63.67% 167.95% 128.02%

Net Assets, end of period (000's Omitted) . . . . $2,593 $4,582 $7,251 $18,310 $27,885 $28,826 $17,243

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class B Class I
Fiscal Period Period Ended Period Ended Period Ended
Ended February 28, December 2, February 28, February 28,
1994(6) 1994(7) 1995(8) 1995(9)
<S> <C> <C> <C> <C>
PER SHARE DATA:

Net asset value, beginning of period . . . . . . $12.32 $12.18 $11.57 $11.57

Investment Operations:

Investment income -- net . . . . . . . . . . . . .03 .37 .04 .04

Total from Investment Operations . . . . . . . (.14) (.72) .23 .23

Distributions . . . . . . . . . . . . . . . . (.11) (.35) .27 .27

Dividends from investment income -- net . . . . (.03) (.37) (.04) (.04)

Dividends from net realized gain on investments. -- (.03) -- --

Total Distributions . . . . . . . . . . . . . (.03) (.40) -- --

Net asset value, end of period . . . . . . . . $12.18 $11.43(10) $11.80 $11.80

Total Investment Return(3) (.93%)(5) (2.98%) 2.30%(5) 2.37%(5)

Ratios/Supplemental Data:

Ratio of expenses to average net assets . . . . .75%(4) .76%(4) 1.36%(4) .50%(4)

Ratio of net investment income to average net
assets . . . . . . . . . . . . . . . . . . . . 1.68%(4) 4.03%(4) 3.72%(4) 4.79%(4)

Decrease reflected in above expense ratios due
to undertakings. . . . . . . . . . . . . . . . 2.25%(4) 1.24%(4) .28%(4) .10%(4)

Portfolio Turnover Rate . . . . . . . . . . . . 167.95% 128.02% 128.02% 128.02%

Net Assets, end of period (000's Omitted) . . . $12 -- $6 $365,801

</TABLE>

_________________________
(1)On January 31 1995, all of the assets and liabilities of the
Intermediate Series off First Prairie Municipal Bond Fund,
Inc. were transferred to the Intermediate Municipal Bond Fund
in exchange for Class A shares of the Intermediate Municipal
Bond Fund. The financial data provided above prior to such
date is for the Intermediate Series of First Prairie
Municipal Bond Fund, Inc.
(2)From March 1, 1988 (commencement of operations) to February
28, 1989.
(3)Exclusive of sales charge.
(4)Annualized.
(5)Not annualized.
(6)For the period February 8, 1994 (initial offering date)
through February 28, 1994.
(7)For the period March 1, 1994 through December 2, 1994. On
December 2, 1994, the Fund terminated its offering of the
then-existing Class B shares and converted Class B shares
outstanding at that time to Class A shares. The Fund
commenced offering Class B shares under the current sales
load structure on January 30, 1995. See note 6 below.
(8)For the period January 30, 1995 (re-offering date of Class B
shares) through February 28, 1995.
(9)For the period January 30, 1995 (initial offering date) to
February 28, 1995.
(10)Conversion to Class A shares. See note 7 above.

<PAGE>

FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for Class A, Class B and Class I of the
Municipal Bond Fund. This information has been derived from
information provided in the Fund's financial statements.

MUNICIPAL BOND FUND(1):
<TABLE>
<CAPTION>

Class A Class B Class I
Year Ended Year Ended Year Ended
Fiscal Year Ended February 28/29 February December February
1989(2) 1990 1991 1992 1993 1994 1995 28, 1994(3) 2, 1994(4) 28, 1995(5)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:

Net asset value, beginning
of year . . . . . . . . . . . $11.94 $11.82 $11.77 $12.10 $12.49 $13.25 $12.13 $12.37 $12.14 $11.79

INVESTMENT OPERATIONS:

Investment income-net . . . . . 0.89 0.81 0.81 0.76 0.70 0.63 0.60 0.03 0.41 0.05

Net realized and unrealized
(loss) on investments . . .. (0.12) 0.28 0.33 0.47 1.01 (0.15) (0.07) (0.23) (0.70) 0.27

Total gain (loss) from Investment
Operations . . . . . . . . . 0.77 1.09 1.14 1.23 1.71 0.48 0.53 (0.20) (0.29) 0.32

DIVIDENDS AND DISTRIBUTIONS:

Dividends from investment
income-net . . . . . . . .. (0.89) (0.81) (0.81) (0.76) (0.70) (0.63) (0.60) (0.03) (0.41) (0.05)

Dividends from net realized
gain on investments . . . . -- (0.33) -- (0.08) (0.25) (0.96) -- -- --

Dividends from excess net
realized gain
on investments . . . . . . -- -- -- -- -- (0.01) -- -- -- --

Total Dividends and Distributions.(0.89) (1.14) (0.81) (0.81) (0.95) (1.60) (0.60) (0.03) (0.41) (0.05)

Net asset value,
end of year . . . . . . .. $11.82 $11.77 $12.10 $12.49 $13.25 $12.13 $12.06 $12.14 $11.44(6) $12.06

Total Investment
Return(7) 6.82%(8) 9.39% 10.13% 10.50% 14.37% 3.70% 4.62% (1.64%)(9) (2.46%)(9) 2.69%(9)

RATIOS/SUPPLEMENTAL DATA:

Ratio of expenses to
average net assets . . . . -- -- -- -- -- -- 0.07% .50%(8) 0.51%(8) 0.51%(8)

Ratio of net investment
income to average
net assets . . . . . . .. 7.46%(8) 16.60% 6.87% 5.99% 5.449% 4.85% 5.09% 4.10%(8) 4.54%(8) 5.45%(8)

Decrease reflected in above
expense ratios due
to undertakings . . . . . . 2.25%(8) 2.75% 2.75% 2.75% 1.59% 1.44% 1.91% 2.41%(8) 2.69%(8) 0.14%(8)

Portfolio Turnover Rate . . . 36.19%(9) 85.07% 32.40% 66.28% 88.53% 175.06% 59.86% 175.06% 59.86% 59.86%

Net Assets, end of year
(000's omitted) . . . . . . $673 $1,192 $2,244 $6,591 $11,290 $9,234 $6,840 $2 -- $220,143

</TABLE>

_______________________
(1) On September 12, 1989 and on January 17, 1995, the
management policies of the Municipal Bond Fund were
changed as described under "General Information."
(2) From March 1, 1988 (commencement of operations) to
February 28, 1989.
(3) From February 8, 1994 (commencement of initial offering)
to February 28, 1994.
(4) For the period March 1, 1994 through December 2, 1994. On
December 2, 1994, the Fund terminated its offering of the
then-existing Class B shares and converted Class B shares
outstanding at that time to Class A shares. The Fund
commenced offering Class B shares under the current
sales load structure after the date of the financials.
(5) From February 1, 1995 (commencement of initial offering)
to February 28, 1995.
(6) Conversion to Class A shares. See note 4 above.
(7) Exclusive of sales charges.
(8) Annualized.
(9) Not annualized.

<PAGE>

Financial Highlights

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for a share of the Government Money Market
Series of First Prairie Money Market Fund (the predecessor fund
of the U.S. Government Money Market Fund). This information has
been derived from information provided in First Prairie Money
Market Fund's financial statements for its U.S. Government Money
Market Series.

U.S. GOVERNMENT MONEY MARKET FUND(1):
<TABLE>
<CAPTION>

Fiscal Year Ended December 31,

PER SHARE DATA: 1987(2) 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. . . . . . . . . $1.0000 $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000 $ .9999

INVESTMENT OPERATIONS:
Investment income net. . . . . . . . . . . . . . . .0409 .0652 .0811 .0715 .0498 .0283 .0249 .0379
Net realized gain (loss) on investments. . . . . . .0004 -- -- -- -- -- (.0001) (.0083)

TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . .0413 .0652 .0811 .0715 .0498 .0283 .0248 .0296

DISTRIBUTIONS:
Dividends from investment income net . . . . . . . (.0409) (.0652) (.0811) (.0715) (.0498) (.0283) (.0249) (.0379)
Dividends from net realized gain on investments. . -- (.0003) (.0001) -- -- -- -- --

TOTAL DISTRIBUTIONS. . . . . . . . . . . . . . . (.0409) (.0655) (.0812) (.0715) (.0498) (.0283) (.0249) (.0379)

CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE INVESTMENT ADVISER. . . . . . . . . . . . . -- -- -- -- -- -- -- .0080

Net Asset value, end of year . . . . . . . . . . . $1.0004 $1.0001 $1.0000 $1.0000 $1.0000 $1.0000 $ .9999 $.9996

TOTAL INVESTMENT RETURN
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. . . . . . 6.21%(3) 6.75% 8.43% 7.39% 5.10% 2.87% 2.52% 3.86%(4)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . .56%(3) .80% .93% .93% .90% .91% .74% .86%
Decrease reflected in above expense ratios
due to. . . . . . . . . . . . . . . . . . . . . . 6.11%(3) 6.56% 8.05% 7.09% 4.97% 2.87% 2.48% 3.73%
expense reimbursements . . . . . . . . . . . . . . .42%(3) .17% .02% -- -- -- .14% .02%
Net Assets, end of year (000's Omitted). . . . . . $99,904 $141,348 $272,578 $777,257 $990,897 $548,733 $154,613 $116,353

</TABLE>

______________________
(1) On May 20, 1995, all of the assets and liabilities of the
U.S. Government Money Market Series of First Prairie Money
Market Fund were transferred to the U.S. Government Money
Market Fund in exchange for shares of the U.S. Government
Money Market Fund. The financial data provided above is for
the U.S. Government Money Market Series of First Prairie
Money Market Fund.
(2) From May 1, 1987 (commencement of operations) to December
31, 1987.
(3) Annualized.
(4) Had there not been a capital contribution by an affiliate
of the Investment Adviser during the year, the Fund's total
return would have been 2.83%.

<PAGE>

Financial Highlights

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for Class A of the Money Market Series of
First Prairie Money Market Fund (the predecessor fund of the
Money Market Fund). This information has been derived from
information provided in First Prairie Money Market Fund's
financial statements for its Money Market Series. As of the date
of the financial statements, Class B shares had not been offered
and, accordingly, no financial data are available for such
Class.

MONEY MARKET FUND(1):

Fiscal Year Ended December 31,

PER SHARE DATA: 1986(2) 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year . . . . . . $1.0000 $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0001

INVESTMENT OPERATIONS:
Investment income net . . . . . . . . . . . . .0552 .0585 .0679 .0842 .0734 .0543 .0313 .0274 .0355
Net realized gain (loss) on investments. . . . -- (.0001) .0001 -- -- -- -- .0001 (.0109)

TOTAL FROM INVESTMENT OPERATIONS . . . . . . .0552 .0584 .0680 .0842 .0734 .0543 .0313 .0275 .0246

DISTRIBUTIONS:
Dividends from investment income net . . . . . (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274) (.0355)
Dividends from net realized gain on investments. -- -- -- -- -- -- -- -- (.0002)

TOTAL DISTRIBUTIONS. . . . . . . . . . . . . (.0552) (.0585) (.0679) (.0842) (.0734) (.0543) (.0313) (.0274) (.0357)

CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE INVESTMENT ADVISER. . . . . . . . . . . -- -- -- -- -- -- -- -- .0108

Net Asset value, end of year . . . . . . . . . $1.0000 $ .9999 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0001 $ .9998

TOTAL INVESTMENT RETURN
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. . . . 6.26%(3) 6.01% 7.01% 8.75% 7.59% 5.57% 3.18% 2.77% 3.63%(4)
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . .88%(3) .96% .98% .95% .96% .97% .98% .94% 1.02%
Decrease reflected in above expense ratios
due to. . . . . . . . . . . . . . . . . . . . 5.73%(3) 5.82% 6.82% 8.34% 7.33% 5.42% 3.17% 2.73% 3.51%
expense reimbursements . . . . . . . . . . . . .23%(3) .03% .01% -- -- -- -- .05% --
Net Assets, end of year (000's Omitted) . . $174,024 $128,485 $159,814 $355,260 $414,258 $456,791 $260,865 $162,623 $119,400

</TABLE>

_________________
(1) On May 20, 1995, all of the assets and liabilities of the
Money Market Series of First Prairie Money Market Fund were
transferred to the Money Market Fund in exchange for Class
A shares of the Money Market Fund. The financial data
provided above is for the Money Market Series of First
Prairie Money Market Fund.
(2) From February 5, 1986 (commencement of operations) to
December 31, 1986.
(3) Annualized.
(4) Had there not been a capital contribution by an affiliate
of the Investment Adviser during the year, the Fund's total
return would have been 2.61%.

<PAGE>

FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for a share of First Prairie Municipal Money
Market Fund (the predecessor fund of the Municipal Money Market
Fund). This information has been derived from information
provided in First Prairie Municipal Money Market Fund's
financial statements.

MUNICIPAL MONEY MARKET FUND(1):
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,

PER SHARE DATA: 1986(2) 1987 1988 1989 1990 1991 1992 1993 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. . . . . . . $1.0000 $ .9998 $ .9999 $ .9999 $ .9999 $ .9999 $ .9999 $.9999 $.9999

INVESTMENT OPERATIONS:
Investment income--net. . . . . . . . . . . . . .0383 .0410 .0480 .0580 .0527 .0413 .0236 .0174 .0234
Net realized gain (loss) on investments. . . . (.0002) .0001 -- -- -- -- -- -- (.0002)
TOTAL FROM INVESTMENT OPERATIONS . . . . . . .0381 .0411 .0480 .0580 .0527 .0413 .0236 .0174 .0232

DISTRIBUTIONS:
Dividends from investment income--net . . . . . (.0383) (.0410) (.0480) (.0580) (.0527) (.0413) (.0236) (.0174) (.0234)
Net Asset value, end of year . . . . . . . . . $ .9998 $ .9999 $ .9999 $ .9999 $ .9999 $ .9999 $ .9999 $ .9999 $ .9997

TOTAL INVESTMENT RETURN. . . . . . . . . . . . 4.30% 4.18% 4.91% 5.96% 5.40% 4.21% 2.38% 1.75% 2.36%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. . . . .71% .96% .98% .98% 1.00% .98% .95% .79% .68%
Ratio of net investment income to average
net assets. . . . . . . . . . . . . . . . . . 4.02% 4.08% 4.79% 5.79% 5.27% 4.11% 2.38% 1.74% 2.33%
Decrease reflected in above expense ratios
due to undertakings. . . . . . . . . . . . . . .34% -- -- -- -- -- .01% .16% .25%
Net Assets, end of year (000's Omitted). . . $211,271 $145,524 $142,806 $158,515 $176,009 $233,675 $210,000 $177,698 $173,130

</TABLE>

___________________________
(1) On May 20, 1995, all of the assets and liabilities of First
Prairie Municipal Money Market Fund were transferred to the
Municipal Money Market Fund in exchange for shares of the
Municipal Money Market Fund. The financial data provided
above is for First Prairie Municipal Money Market Fund.

(2) From February 5, 1986 (commencement of operations) to
December 31, 1986.

<PAGE>

FINANCIAL HIGHLIGHTS

Contained below is per share operating performance data, total
investment return, ratios to average net assets and other
supplemental data for the Class, Fund and period indicated
(unaudited). This information has been derived from information
provided in the Fund's financial statements.

For the period ended April 30, 1995 (unaudited)
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class A Shares:
Net asset value per share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income 0.10 0.02 - 0.15 0.14 0.02 0.01
Net realized and unrealized gain on investment 0.60 0.73 0.48 1.26(8) 0.27 0.67(8) 0.06
Total Income from Investment Operations 0.70 0.75 0.48 1.41 0.41 0.69 0.07
Dividends:
Dividends from net investment income (0.08) (0.03) (0.01) (0.15) (0.14) (0.02) -
Net change in net asset value per share 0.62 0.72 0.47 1.26 0.27 0.67 0.07
Net asset value per share, end of period $ 10.62 $ 10.72 $ 10.47 $ 11.26 $ 10.27 $ 10.67 $ 10.07

TOTAL INVESTMENT RETURN (5) 7.05% 7.53% 4.75% 14.18% 4.15% 6.89% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (6) 0.87% 1.04% 1.09% 1.18% 0.95% 1.30% 1.05%
Ratio of net investment income to average net assets (6) 3.95% 1.00% 0.02% 5.47% 6.58% 0.91% 2.18%
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements (6) 0.17% 0.10% 0.32% 1.71% 0.21% 0.31% 23.59%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of year (000's Omitted) $ 15 $ 468 $ 171 $ 207 $ 470 $ 600 $ 297

</TABLE>

______________________________________

(1) For the period January 27, 1995 (commencement of
operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of
operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations)
through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations)
through April 30, 1995.
(5) The total return figures provided are not annualized and do
not include the effect of any sales charge.
(6) Annualized.
(7) Not annualized.
(8) Includes net realized and unrealized gain on foreign
currency transactions.

For the period ended April 30, 1995 (unaudited)
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class B Shares:
Net asset value per share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income 0.09 0.02 (0.01) 0.13 0.13 0.02 -
Net realized and unrealized gain on investment 0.59 0.72 0.46 1.26(8) 0.27 0.65(8) 0.07
Total Income from Investment Operations 0.68 0.74 0.45 1.39 0.40 0.67 0.07
Dividends:
Dividends from net investment income (0.07) (0.02) - (0.13) (0.13) (0.01) -
Net change in net asset value per share 0.61 0.72 0.45 1.26 0.27 0.66 0.07
Net asset value per share, end of period $ 10.61 $ 10.72 $ 10.45 $ 11.26 $ 10.27 $ 10.66 $ 10.07

TOTAL INVESTMENT RETURN (5) 6.81% 7.38% 4.50% 13.97% 3.99% 6.73% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (6) 1.60% 1.76% 1.80% 1.78% 1.72% 2.05% 1.80%
Ratio of net investment income to average net assets (6)3.49% 0.87% -0.46% 4.99% 5.91% 1.19% 0.54%
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements (6) 0.21% 0.13% 0.33% 1.85% 0.30% 0.37% 30.29%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of year (000's Omitted) $ 4 $ 4 $ 6 $ 4 $ 4 $ 4 $ 438

</TABLE>

______________________________________

For the period ended April 30, 1995 (unaudited)
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class I Shares:
Net asset value per share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income 0.11 0.05 0.01 0.16 0.15 0.03 0.01
Net realized and unrealized gain on investment 0.60 0.71 0.46 1.26(8) 0.27 0.66(8) 0.06
Total Income from Investment Operations 0.71 0.76 0.47 1.42 0.42 0.69 0.07
Dividends:
Dividends from net investment income (0.09) (0.04) (0.01) (0.16) (0.15) (0.02) -

Net change in net asset value per share 0.62 0.72 0.46 1.26 0.27 0.67 0.07
Net asset value per share, end of period $ 10.62 $ 10.72 $ 10.46 $ 11.26 $ 10.27 $ 10.67 $ 10.07

TOTAL INVESTMENT RETURN (5) 7.09% 7.55% 4.70% 14.25% 4.20% 6.91% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (6) 0.65% 0.80% 0.85% 0.84% 0.70% 1.06% 0.80%
Ratio of net investment income to average net assets (6)4.44% 1.82% 0.53% 5.94% 6.92% 2.18% 2.60%
Decrease reflected in above expense ratios due to
fee waivers and expense reimbursements (6) 0.14% 0.11% 0.32% 1.80% 0.22% 0.32% 23.15%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of year (000's Omitted) $217,849 $283,398 $ 64,325 $ 11,039 $112,013 $ 59,896 $ 104

</TABLE>

______________________________________
(1) For the period January 27, 1995 (commencement of
operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of
operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations)
through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations)
through April 30, 1995.
(5) The total return figures provided are not annualized and do
not include the effect of any sales charge.
(6) Annualized.
(7) Not annualized.
(8) Includes net realized and unrealized gain on foreign
currency transactions.

Further information about performance is contained in each such
Fund's annual report, which may be obtained without charge by
writing to the address or calling the number set forth on the
cover page of this Prospectus.

<PAGE>

Highlights

The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.

THE FUNDS

Each of the Intermediate Bond Fund and Municipal Bond Fund is a
separate open-end, management investment company organized under
the name Prairie Intermediate Bond Fund and Prairie Municipal
Bond Fund, Inc., respectively. The remaining Funds are series of
Prairie Funds, an open-end, management investment company.

INVESTMENT OBJECTIVES AND
MANAGEMENT POLICIES

Name of Fund Page

Managed Assets Income Fund. . . . . . . . . . . . . . 11

Managed Assets Fund . . . . . . . . . . . . . . . . . 11

Equity Income Fund. . . . . . . . . . . . . . . . . . 13

Growth Fund . . . . . . . . . . . . . . . . . . . . . 13

Special Opportunities Fund. . . . . . . . . . . . . . 13

International Equity Fund . . . . . . . . . . . . . . 13

Intermediate Bond Fund. . . . . . . . . . . . . . . . 14

Bond Fund . . . . . . . . . . . . . . . . . . . . . . 14

International Bond Fund . . . . . . . . . . . . . . . 14

Intermediate Municipal Bond Fund. . . . . . . . . . . 15

Municipal Bond Fund . . . . . . . . . . . . . . . . . 15

U.S. Government Money Market Fund . . . . . . . . . . 15

Money Market Fund . . . . . . . . . . . . . . . . . . 15

Municipal Money Market Fund . . . . . . . . . . . . . 16

INVESTMENT ADVISER AND
ADMINISTRATOR

First Chicago Investment Management Company is each Fund's
investment adviser and administrator. Each Fund has agreed to
pay the Investment Adviser an annual fee as set forth under
"Management of the Funds." The Investment Adviser has engaged
ANB-IMC to serve as sub-investment adviser to the International
Equity Fund.

ALTERNATIVE PURCHASE METHODS

Each Fund offers Class A shares; each Fund, other than the U.S.
Government Money Market and Municipal Money Market Funds, offers
Class B shares; and each Fund, other than the Money Market
Funds, offers Class I shares. Each Class A, Class B and Class I
share represents an identical pro rata interest in the relevant
Fund's investment portfolio.

Class A shares are sold at net asset value per share plus,
for each Fund, other than the Money Market Funds, an initial
sales charge imposed at the time of purchase. The initial sales
charge may be reduced or waived for certain purchases. See "How
to Buy Shares-Class A Shares." Class A shares of each Fund are
subject to an annual service fee. Class A shares held by
investors who after purchasing Class A shares establish a
Fiduciary Account (as defined below) automatically will convert
to Class I shares, based on the relative net asset values for
shares of each such Class.

Class B shares are sold at net asset value per share with
no initial sales charge at the time of purchase; as a result,
the entire purchase price is immediately invested in the Fund.
Class B shares are subject to a contingent deferred sales charge
("CDSC"), which is assessed only if the Class B shares are
redeemed within six years (five years in the case of the
Intermediate Bond Fund and Intermediate Municipal Bond Fund) of
purchase. Class B shares of the Money Market Fund may be
acquired only through the exchange of Class B shares of the
other Funds and are subject to the CDSC, if any, of the shares
with which the exchange is made. See "How to Redeem
Shares-Contingent Deferred Sales Charge-Class B Shares." Class B
shares are subject to an annual distribution fee and service
fee. The distribution fee paid by Class B will cause Class B to
have a higher expense ratio and to pay lower dividends than
Class A. Approximately eight years (seven years in the case of
the Intermediate Bond Fund and Intermediate Municipal Bond Fund)
after the date of purchase, Class B shares automatically will
convert to Class A shares, based on the relative net asset
values for shares of each such Class, and will no longer be
subject to a distribution fee.

Class I shares are sold at net asset value with no sales
charge. Class I shares are offered exclusively to qualified
trust, custody and/or agency account clients of FNBC, ANB or
their affiliates ("Fiduciary Accounts") and qualified benefit
plans or other programs with assets of at least $100 million
invested in shares of the Funds or other investment companies or
accounts advised by the Investment Adviser ("Eligible Retirement
Plans"). Class I shares held by investors who after purchasing
Class I shares withdraw from their Fiduciary Accounts
automatically will convert to Class A shares, based on the
relative net asset values for shares of each such Class, and
will be subject to the annual service fee charged Class A.

See "Alternative Purchase Methods."
<PAGE>
HISTORICAL PERFORMANCE INFORMATION

Composite performance for the Funds or predecessor funds, as the
case may be, for various periods Ended December 31, 1994, except
as noted.

Class A Shares
(Maximum Offering Price)

Average Annual Total Return
1 Year 3 Years 5 Years 10 Years

ASSET ALLOCATION FUNDS:
<S> <C> <C> <C> <C>
Managed Assets Fund (1) . . . . N/A N/A N/A N/A

Managed Assets Income Fund (2). -6.35% 4.07% 7.70% 9.59%(3)

EQUITY FUNDS:

Equity Income Fund (4). . . . . -7.36% 4.12% 6.29% 10.70%

Growth Fund (4) . . . . . . . . -6.23% 4.66% 8.35% 11.90%

Special Opportunities Fund (4). -9.77% 5.46% 11.23% 11.98%

International Equity Fund (1) . N/A N/A N/A N/A

BOND FUNDS:

Intermediate Bond Fund* . . . . -3.43% 0.73(5) N/A N/A

Bond Fund (4) . . . . . . . . . -7.38% 2.12% 4.82% 8.25%

International Bond Fund (4) . . 0.91% 5.93% 8.59% N/A

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund (2)** -1.41% 4.83% 6.81% 7.13%(6)

Municipal Bond Fund** . . . . . -0.09% 5.82% 7.57% 7.74%(6)

MONEY MARKET FUNDS:

U.S. Government Money Market Fund (2) 3.86% 3.08% 4.33% 5.39%(8)

Money Market Fund (2) . . . . . 3.62% 3.19% 4.53% 5.62%(9)

Municipal Money Market Fund (2) 2.36% 2.17% 3.21% 3.93%(9)

</TABLE>

Class A Shares
(Net Asset Value)

Average Annual Total Return
1 Year 3 Years 5 Years 10 Years

ASSET ALLOCATION FUNDS:
<S> <C> <C> <C> <C>
Managed Assets Fund (1) . . . . N/A N/A N/A N/A

Managed Assets Income Fund (2). -1.92% 5.65% 8.69% 10.16%(3)

EQUITY FUNDS:

Equity Income Fund(4) . . . . . -2.99% 5.74% 7.28% 11.21%

Growth Fund (4) . . . . . . . . -1.81% 6.28% 9.36% 12.42%

Special Opportunities Fund (4). -5.52% 7.10% 12.27% 12.51%

International Equity Fund (1) . N/A N/A N/A N/A

BOND FUNDS:

Intermediate Bond Fund* . . . . -0.45% 2.20%(5) N/A N/A

Bond Fund (4) . . . . . . . . . -3.02% 3.70% 5.80% 8.75%

International Bond Fund (4) . . 5.67% 7.57% 9.60% N/A

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund** 1.64% 5.90% 7.74% 7.59%(6)

Municipal Bond Fund** . . . . . 4.62% 7.45% 8.58% 8.45%(6)

MONEY MARKET FUNDS:

U.S. Government Money
Market Fund (2) . . . . . . . 3.86% 3.08% 4.33% 5.39%(8)

Money Market Fund (2) . . . . . 3.62% 3.19% 4.53% 5.62%(9)

Municipal Money
Market Fund (2) . . . . . . . 2.36% 2.17% 3.21% 3.93%(9)

</TABLE>
<PAGE>

Class B Shares

Average Annual Total Return
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUNDS:

Managed Assets Fund (1) . . . . N/A N/A N/A N/A

Managed Assets Income Fund (7). N/A N/A N/A N/A

EQUITY FUNDS:

Equity Income Fund (4). . . . . -8.05% 3.88% 6.04% 10.38%

Growth Fund (4) . . . . . . . . -6.93% 4.42% 8.10% 11.58%

Special Opportunities Fund (4). -10.44% 5.22% 10.97% 11.66%

International Equity Fund (1) . N/A N/A N/A N/A

BOND FUNDS:

Intermediate Bond Fund (7)* . . N/A N/A N/A N/A

Bond Fund (4) . . . . . . . . . -8.08% 1.88% 4.58% 7.94%

International Bond Fund (4) . . 0.16% 5.69% 8.34% N/A

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund(7)** N/A N/A N/A N/A

Municipal Bond Fund (7)** . . . N/A N/A N/A N/A

MONEY MARKET FUND:

Money Market Fund (7) . . . . . N/A N/A N/A N/A

</TABLE>

Class I Shares

Average Annual Total Return
1 Year 3 Years 5 Years 10 Years

ASSET ALLOCATION FUNDS:
<S> <C> <C> <C> <C>
Managed Assets Fund (1) . . . . N/A N/A N/A N/A

Managed Assets Income Fund (7). N/A N/A N/A N/A

EQUITY FUNDS:

Equity Income Fund (4). . . . . -2.47% 6.29% 7.84% 11.79%

Growth Fund (4) . . . . . . . . -1.29% 6.84% 9.93% 13.01%

Special Opportunities Fund (4). -5.01% 7.66% 12.85% 13.09%

International Equity Fund (1) . N/A N/A N/A N/A

BOND FUNDS:

Intermediate Bond Fund* . . . . -0.48% 2.18%(5) N/A N/A

Bond Fund (4) . . . . . . . . . -2.50% 4.24% 6.35% 9.32%

International Bond Fund (4) . . 6.23% 8.13% 10.17% N/A

MUNICIPAL BOND FUNDS:

Intermediate Municipal Bond Fund (7)** N/A N/A N/A N/A

Municipal Bond Fund (7)** . . . N/A N/A N/A N/A

</TABLE>

* For the periods ended January 31, 1995.

** For the periods ended February 28, 1995.

(1) No predecessor fund existed; thus, no prior average annual
total return information for the Fund is available.

(2) The Fund commenced operations through a transfer of assets
from an investment company advised by FNBC, using
substantially the same investment objective, policies,
restrictions and methodologies as the Fund. The predecessor
funds were: for Managed Assets Income Fund, First Prairie
Diversified Asset Fund; for Intermediate Municipal Bond
Fund, the Intermediate Series of First Prairie Municipal
Bond Fund; for U.S. Government Money Market Fund, the
Government Series of First Prairie Money Market Fund; for
Money Market Fund, the Money Market Series of First Prairie
Money Market Fund; and for Municipal Money Market Fund,
First Prairie Municipal Money Market Fund. The performance
shown is that of the predecessor fund.

(3) From commencement of operations on January 23, 1986.

(4) The Fund commenced operations through a transfer of assets
from a common trust fund managed by FNBC, using
substantially the same investment objective, policies,
restrictions and methodologies as the Fund. The common
trust fund did not charge any expenses. The performance
information reflects the operating expenses that are
expected to be charged as more fully set forth in the Fee
Table above.

(5) From commencement of operations on March 5, 1993.

(6) From commencement of operations on March 1, 1988.

(7) No predecessor class exists; thus, no prior performance
information for the Class is available.

(8) From commencement of operations on May 1, 1987.

(9) From commencement of operations on February 5, 1986.
<PAGE>
The historical pro-forma performance information presented above
for each Fund listed is deemed relevant because the predecessor
was advised by FNBC which reorganized the personnel responsible
for advising the predecessor into FCIMCO, its wholly-owned
subsidiary, which will manage the Fund, using substantially the
same investment objective, policies, restrictions and
methodologies as those used by the Fund. However, this
performance information is not necessarily indicative of the
future performance of any Fund. Because each Fund will be
actively managed, its investments will vary from time to time
and will not be identical to the past portfolio investments of
the predecessor. Each Fund's performance will fluctuate so that
an investor's shares, when redeemed, may be worth more or less
than their original cost.

HOW TO BUY SHARES

Orders for the purchase of Class A and Class B shares may be
placed through a number of institutions including FCIMCO, FNBC,
ANB and their affiliates, including First Chicago Investment
Services, Inc. ("FCIS"), a registered broker-dealer, the
Distributor and certain banks, securities dealers and other
industry professionals such as investment advisers, accountants
and estate planning firms (collectively, "Service Agents").

Investors purchasing Class I shares through their Fiduciary
Accounts at FNBC, ANB or their affiliates should contact such
entity directly for appropriate instructions, as well as for
information about conditions pertaining to the account and any
related fees. Class I shares may be purchased for a Fiduciary
Account or Eligible Retirement Plan only by a custodian,
trustee, investment manager or other entity authorized to act on
behalf of such Account or Plan.

The minimum initial investment is $1,000. All subsequent
investments must be at least $100.

See "How to Buy Shares."

SHAREHOLDER SERVICES

The Funds offer shareholders certain services and privileges
including: Exchange Privilege, Letter of Intent and Automatic
Investment Plan. Certain services and privileges may not be
available through all Service Agents.

HOW TO REDEEM SHARES

Generally, investors should contact their representatives at
FCIMCO, FNBC, ANB or appropriate Service Agent for redemption
instructions. Investors who are not clients of FCIMCO, FNBC, ANB
or a Service Agent may redeem Fund shares by written request to
the transfer agent.

See "How to Redeem Shares."

Description of the Funds

GENERAL

Each of the Intermediate Bond Fund and Municipal Bond Fund is a
separately organized mutual fund. Each of the remaining Funds is
a separate portfolio of Prairie Funds (the "Trust"), which is a
mutual fund divided into separate portfolios known as a "series
fund." Each portfolio is treated as a separate entity for
certain matters under the Investment Company Act of 1940, as
amended (the "1940 Act"), and for other purposes, and a
shareholder of one portfolio is not deemed to be a shareholder
of any other portfolio. As described below, for certain matters
Trust shareholders vote together as a group; as to others they
vote separately by portfolio. By this Prospectus, shares of 12
of the Trust's portfolios and shares of the Intermediate Bond
Fund and Municipal Bond Fund are being offered: five of the
Funds are diversified investment companies (the "Diversified
Funds")-Managed Assets Income Fund, Managed Assets Fund, U.S.
Government Money Market Fund, Money Market Fund and Municipal
Money Market Fund-and nine of the Funds are non-diversified
investment companies (the "Non-Diversified Funds")-Equity Income
Fund, Special Opportunities Fund, Growth Fund, International
Equity Fund, Intermediate Bond Fund, Bond Fund, International
Bond Fund, Intermediate Municipal Bond Fund and Municipal Bond
Fund.

INVESTMENT OBJECTIVES

Each Fund's investment objective is set forth on the cover page
of this Prospectus. The differences in objectives and policies
among the Funds determine the types of portfolio securities in
which each Fund invests and can be expected to affect the degree
of risk to which each Fund is subject and each Fund's yield or
return. See "Management Policies" below, and "Appendix." Each
Fund's investment objective cannot be changed without approval
by the holders of a majority (as defined in the 1940 Act) of
such Fund's outstanding voting securities. There can be no
assurance that each Fund's investment objective will be
achieved.

MANAGEMENT POLICIES

The following section should be read in conjunction with
"Certain Portfolio Securities" and "Investment Techniques" in
the Appendix.

Asset Allocation Funds

Each of the Managed Assets Income Fund and Managed Assets Fund
will follow an asset allocation strategy by investing in equity,
fixed-income and short-term securities of domestic and foreign
issuers. For each Asset Allocation Fund, the asset classes,
market sectors, securities and portfolio strategies selected
will be those that the Investment Adviser believes prudent and
offer the greatest potential for achieving the relevant Asset
Allocation Fund's investment objective. The Investment Adviser
has broad latitude in selecting investments and portfolio
strategies. See "Risk Factors-Investing in Foreign Securities"
below.

The equity securities in which each Asset Allocation Fund
may invest consist of common stocks, preferred stocks and
convertible securities, including those in the form of
depositary receipts, as well as warrants to purchase such
securities (collectively, "Equity Securities"). The fixed-income
securities in which each Asset Allocation Fund may invest
include bonds and debentures (including those that are
convertible), notes, mortgage-related securities, asset-backed
securities, municipal obligations and convertible debt
obligations (collectively, "Fixed-Income Securities"), with
maturities of more than three years. The short-term securities
which may be purchased by an Asset Allocation Fund include
fixed-income securities with maturities of less than three years
at the time of purchase, and money market instruments of the
type in which the Money Market Fund invests (collectively,
"Money Market Instruments"), as described below.

Each Asset Allocation Fund's portfolio of debt securities
will consist primarily of those which are rated no lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's Corporation ("S&P"), Fitch Investors Service,
Inc. ("Fitch") or Duff & Phelps Credit Rating Co. ("Duff "), or,
if unrated, deemed to be of comparable quality by the Investment
Adviser. Debt securities rated Baa by Moody's or BBB by S&P,
Fitch or Duff are considered investment grade obligations which
lack outstanding investment characteristics and have speculative
characteristics as well. The Managed Assets Fund may invest up
to 20% of its net assets in debt securities rated below
investment grade and the Managed Assets Income Fund may invest
up to 5% of its net assets in convertible bonds rated below
investment grade. See "Risk Factors-Lower Rated Securities"
below.

The following table sets forth for each Asset Allocation
Fund the asset classes, benchmark percentages and asset class
strategy ranges within which the Investment Adviser intends to
manage the Fund's assets:

Managed Managed
Assets Assets
Income Fund Fund

Asset Class Benchmark Strategy Benchmark Strategy
Percentage Range Percentage Range

Equity 25% 5-45% 50% 30-70%

Fixed-Income 55% 35-75% 40% 20-60%

Short-Term 20% 0-40% 10% 0-30%

"Benchmark percentage" represents the asset mix the
Investment Adviser would expect to maintain when its assessment
of economic conditions and investment opportunities indicate
that the financial markets are fairly valued relative to each
other. The asset class "strategy range" indicates ordinarily
expected variations from this benchmark and reflects the fact
that the Investment Adviser expects to make policy weight shifts
within specific asset classes. Under normal conditions, the
Investment Adviser expects to adhere to the asset class strategy
ranges set forth above; however, the Investment Adviser reserves
the right to vary the asset class mix and the percentage of
securities invested in any asset class or market from the
benchmark percentages and asset class strategy ranges set forth
above as the risk/return characteristics of either markets or
asset classes, as assessed by the Investment Adviser, vary over
time. When the Investment Adviser determines that adverse market
conditions exist, each Asset Allocation Fund may adopt a
temporary defensive posture and invest its entire portfolio in
Money Market Instruments. Each Asset Allocation Fund will invest
in substantially the same securities within an investment class.
The amount of each Asset Allocation Fund's aggregate assets
invested in a particular investment class, and thus in
particular securities, will differ, but the relative percentage
that a particular security comprises within an investment class
ordinarily will remain substantially the same. The asset
allocation mix selected will be a primary determinant in the
respective Asset Allocation Fund's investment performance. Under
certain market conditions, limiting the Asset Allocation Fund's
asset allocation among these asset classes may inhibit their
ability to achieve their respective investment objectives.

Each Asset Allocation Fund also may engage in futures and
options transactions and other derivative securities
transactions, such as interest rate and equity index swaps,
leveraging, short-selling, foreign exchange transactions and
lending portfolio securities, each of which involves risk. See
"Risk Factors" below and "Appendix-Investment Techniques."

Equity Funds

Each of the Equity Income Fund, Growth Fund, Special
Opportunities Fund and International Equity Fund (the "Equity
Funds") will invest at least 65% of the value of its total
assets (except when maintaining a temporary defensive position)
in Equity Securities, as defined under "Asset Allocation Funds"
above.

Each Equity Fund may invest, in anticipation of otherwise
investing cash positions, to meet asset segregation or margin
requirements or as otherwise noted below, in Money Market
Instruments. Under normal market conditions, no Equity Fund
expects to have a substantial portion of its assets invested in
Money Market Instruments. However, when the Investment Adviser
determines that adverse market conditions exist, an Equity Fund
may adopt a temporary defensive posture and invest entirely in
Money Market Instruments.

Each Equity Fund also may invest in Fixed-Income Securities
(as defined under "Asset Allocation Funds" above) to the extent
described below.

Each Equity Fund also may engage in futures and options
transactions and other derivative securities transactions, such
as equity index swaps, leveraging, short-selling and lending
portfolio securities, and, except for the Equity Income Fund,
may engage in foreign exchange transactions, each of which
involves risk. See "Risk Factors" below and "Appendix-Investment
Techniques."

The Equity Income Fund will invest primarily in income-
producing Equity Securities of domestic issuers. The Investment
Adviser will be particularly alert to companies which pay above-
average dividends, yet offer opportunities for capital
appreciation and growth of earnings. In addition, the Fund may
invest up to 35% of the value of its net assets in convertible
debt securities that generally have features similar to both
common stocks and bonds and offer the potential for current
income and capital appreciation over time.

While the Fund will invest primarily in Equity Securities
of domestic issuers, the Fund also may invest in depositary
receipts of foreign issuers. See "Risk Factors-Investing in
Foreign Securities" below. The Fund also may invest in
Fixed-Income Securities and Money Market Instruments based on
the Investment Adviser's assessment of economic conditions and
investment opportunities. The Fixed-Income Securities, other
than convertible debt securities, in which the Fund may invest
must be rated investment grade, or, if unrated, deemed to be of
comparable quality by the Investment Adviser. The convertible
debt securities in which the Fund may invest may be rated lower
than investment grade. See "Risk Factors-Lower Rated Securities"
below.

The Growth Fund will invest primarily in Equity Securities
of domestic issuers believed by the Investment Adviser to have
above-average growth characteristics. The Investment Adviser
will consider some of the following factors in making its
investment decisions: the development of new or improved
products or services, a favorable outlook for growth in the
industry, patterns of increasing sales and earnings, the
probability of increased operating efficiencies, cyclical
conditions, or other signs that the company is expected to show
greater than average earnings growth and capital appreciation.

While the Fund will invest primarily in Equity Securities
of domestic issuers, the Fund also may invest in depositary
receipts of foreign issuers and may invest up to 20% of its
total assets (valued at the time of investment) in Equity
Securities of foreign issuers. See "Risk Factors-Investing in
Foreign Securities" below. The Fund also may invest in
Fixed-Income Securities which, other than convertible debt
securities, are rated investment grade, or, if unrated, deemed
to be of comparable quality by the Investment Adviser. The Fund
may invest in convertible debt securities rated lower than
investment grade. See "Risk Factors-Lower Rated Securities"
below.

The Special Opportunities Fund will invest primarily in
Equity Securities of small- to medium-sized emerging growth
domestic issuers (typically with market capitalizations of $100
million to $750 million) that the Investment Adviser believes
are undervalued in the marketplace. The Investment Adviser will
consider some of the following factors in making its investment
decisions: high quality management, significant equity ownership
positions by management, a leading or dominant position in a
major product line, a sound financial position and a relatively
high rate of return on invested capital. The Fund also may
invest in companies that offer the possibility of accelerating
earnings growth because of management changes, new products or
structural changes in industry or the economy.

The International Equity Fund will invest in Equity
Securities of issuers located throughout the world, except the
United States. As a neutral position, the Fund will hold Equity
Securities of issuers located in the countries which constitute
the Morgan Stanley Capital International-Europe, Australia and
Far East ("EAFE") Index. The EAFE Index is a broadly diversified
international index composed of the Equity Securities of
approximately 1,000 companies located outside the United States.
Building on this base, the Investment Adviser and ANB-IMC will
shift the Fund's holdings to emphasize or de-emphasize regions
of the international market based on such region's relative
attractiveness. In making these shifts, the Investment Adviser
and ANB-IMC will use a computer-based model which takes into
account a number of factors, including relative economic
strength, relative inflation rates, relative valuation of equity
markets, bond yield differentials, forecasts of trade flows and
financial market volatility. See "Risk Factors-Investing in
Foreign Securities" below.

The Fund will seek to identify those countries offering the
greatest relative potential investment return, rather than
selecting individual companies in each country which will
outperform the major stock index of their respective countries.
Thus, the individual stocks selected will generally be chosen
through a statistical procedure to approximate the investment
performance of the relevant country index. The Fund is not an
index fund and is neither sponsored by nor affiliated with
Morgan Stanley Capital International.

Bond Funds

Each of the Intermediate Bond Fund, Bond Fund and International
Bond Fund (the "Bond Funds") will invest at least 65% of the
value of its total assets (except when maintaining a temporary
defensive position) in bonds, debentures and other debt
instruments. Each Bond Fund will invest in Fixed-Income
Securities. When management believes it advisable for temporary
defensive purposes or in anticipation of otherwise investing
cash positions, each Bond Fund may invest in Money Market
Instruments.

Each Bond Fund also may engage in futures and options
transactions and other derivative securities transactions, such
as interest rate swaps, leveraging, short-selling and lending
portfolio securities, and the International Bond Fund may engage
in foreign exchange transactions, each of which involves risk.
See "Risk Factors" below and "Appendix-Investment Techniques."

The Intermediate Bond Fund invests in a portfolio of U.S.
dollar denominated Fixed-Income Securities of domestic and
foreign issuers which, under normal market conditions, will have
a dollar-weighted average maturity expected to range between
three and ten years. Under normal market conditions, at least
65% of the value of the Intermediate Bond Fund's total assets
will consist of Fixed-Income Securities rated A or better by
Moody's, S&P, Fitch or Duff. The Intermediate Bond Fund will
invest the remainder of its assets in investment grade
Fixed-Income Securities and Money Market Instruments rated
within the two highest rating categories by Moody's, S&P, Fitch
or Duff. The Fund also may invest in Fixed-Income Securities
which, while not rated, are determined by the Investment Adviser
to be of comparable quality to those rated securities in which
the Fund may invest. The Fund is not limited in the maturities
of the securities in which it invests and the maturity of a
portfolio security may range from overnight to 40 years. See
"Risk Factors-Lower Rated Securities" and "--Investing in
Foreign Securities" below.

The Bond Fund will invest in a broad range of U.S. dollar
denominated Fixed-Income Securities of domestic and foreign
issuers, without regard to maturity. Under normal market
conditions, at least 65% of the value of the Fund's net assets
will consist of Fixed-Income Securities rated A or better by
Moody's, S&P, Fitch or Duff. The remainder of the Fund's net
assets may be invested in Fixed-Income Securities rated no lower
than B by Moody's, S&P, Fitch and Duff. The Fund also may invest
in Fixed-Income Securities which, while not rated, are
determined by the Investment Adviser to be of comparable quality
to those rated securities in which the Fund may invest. See
"Risk Factors--Lower Rated Securities" and "--Investing in
Foreign Securities" below.

The International Bond Fund will invest in Fixed-Income
Securities of issuers located throughout the world, except the
United States. The Fund also may invest in convertible preferred
stocks. The Fund may hold foreign currency, and may purchase
debt securities or hold currencies in combination with forward
currency exchange contracts. The Fund will be alert to
opportunities to profit from fluctuations in currency exchange
rates. The Fund will be particularly alert to favorable
arbitrage opportunities (such as those resulting from favorable
interest rate differentials) arising from the relative yields of
the various types of securities in which the Fund may invest and
market conditions generally. The Fund may invest without
restriction in companies in, or governments of, developing
countries. Developing countries have economic structures that
are generally less diverse and mature, and political systems
that are less stable, than those of developed countries. The
markets of developing countries may be more volatile than the
markets of more mature economies; however, such markets may
provide higher rates of return to investors. See "Risk
Factors-Investing in Foreign Securities" below.

Under mormal market conditions, at least 65% of the value
of the Fund's net assets will consist of Fixed-Income Securities
rated A or better by Moody's, S&P, Fitch or Duff. The remainder
of the Fund's net assets may be invested in Fixed-Income
Securities rated no lower than B by Moody's, S&P, Fitch and
Duff. The Fund also may invest in Fixed-Income Securities
which, while not rated, are determined by the Investment Adviser
to be of comparable quality to those rated securities in which
the Fund may invest. See "Risk Factors-Lower Rated Securities"
below.

Municipal Funds

It is a fundamental policy of each of the Intermediate Municipal
Bond Fund and Municipal Bond Fund (the "Municipal Bond Funds"
and, together with the Municipal Money Market Fund, the
"Municipal Funds") that it will invest (except when maintaining
a temporary defensive position) at least 80% of the value of its
net assets in Municipal Obligations and at least 65% of the
value of its total assets in bonds, debentures and other debt
instruments. Municipal Obligations in which the Municipal Funds
will invest are debt obligations issued by states, territories
and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and
instrumentalities, or multi-state agencies or authorities, the
interest from which is, in the opinion of bond counsel to the
issuer, exempt from Federal income tax.

From time to time, each Municipal Fund may invest more than
25% of the value of its total assets in industrial development
bonds which, although issued by industrial development
authorities, may be backed only by the assets and revenues of
the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are
specified private activity bonds, as defined in the Internal
Revenue Code of 1986, as amended (the "Code"), issued after
August 7, 1986, while exempt from Federal income tax, is a
preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a
proportionate share of any exempt-interest dividend paid by the
investment company may be treated as such a preference item to
the shareholder. Each Municipal Fund may invest without
limitation in such Municipal Obligations if the Investment
Adviser determines that their purchase is consistent with the
Fund's investment objective. See "Risk Factors-Municipal
Obligations" below.

From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value
of the Fund's net assets) or for temporary defensive purposes,
each Municipal Fund may invest in taxable Money Market
Instruments. Dividends paid by the Fund that are attributable to
income earned by it from these securities will be taxable to
investors. See "Dividends, Distributions and Taxes." Under
normal market conditions, it is anticipated that not more than
5% of the value of a Municipal Fund's total assets will be
invested in any one category of these securities.

Each Municipal Bond Fund also may engage in futures and
options transactions and lending portfolio securities, each of
which involves risk. Futures and options transactions involve
derivative securities. See "Risk Factors" below and
"Appendix-Investment Techniques."

The Intermediate Municipal Bond Fund will invest in a
portfolio of Municipal Obligations which, under normal market
conditions, will have a dollar-weighted average maturity
expected to range between three and ten years. The Fund will
purchase Municipal Obligations only if rated investment grade,
or, if unrated, determined by the Investment Adviser to be of
comparable quality to the rated securities in which the Fund may
invest.

The Municipal Bond Fund will invest in a portfolio of
Municipal Obligations without regard to maturity. The Fund will
purchase Municipal Obligations only if rated at least Baa,
MIG-2/VMIG-2 or Prime-1 (P-1) by Moody's, BBB, SP-2 or A-1 by
S&P, BBB or F-2 by Fitch or BBB or Duff-2 by Duff or, if
unrated, determined by the Investment Adviser to be of
comparable quality to the rated securities in which the Fund may
invest.

Money Market Funds

Each of the U.S. Government Money Market Fund, Money Market Fund
and Municipal Money Market Fund (the "Money Market Funds") seeks
to maintain a net asset value of $1.00 per share for purchases
and redemptions. To do so, each Money Market Fund uses the
amortized cost method of valuing its securities pursuant to Rule
2a-7 under the 1940 Act, certain requirements of which are
summarized below.

In accordance with Rule 2a-7, each Money Market Fund is
required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in
U.S. dollar denominated securities determined in accordance with
procedures established by the Board to present minimal credit
risks and, in the case of the Money Market Fund and Municipal
Money Market Fund, which are rated in one of the two highest
rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one
rating organization if the instrument was rated by only one such
organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the
Board. The nationally recognized statistical rating
organizations currently rating instruments of the type the Money
Market Fund and Municipal Money Market Fund may purchase are
Moody's, S&P, Duff, Fitch, IBCA Limited and IBCA Inc., and
Thomson BankWatch, Inc. and their rating criteria are described
in the Appendix to the Statement of Additional Information. For
further information regarding the amortized cost method of
valuing securities, see "Determination of Net Asset Value" in
the Statement of Additional Information. There can be no
assurance that each Money Market Fund will be
able to maintain a stable net asset value of $1.00 per share.

The U.S. Government Money Market Fund will invest only in
short-term securities issued or guaranteed as to principal or
interest by the U.S. Government, its agencies or
instrumentalities and may enter into repurchase agreements. The
Fund also may lend securities from its portfolio as described
under "Appendix-Investment Techniques."

The Money Market Fund will invest in short-term money
market obligations, including securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities,
certificates of deposit, time deposits, bankers' acceptances and
other short-term obligations issued by domestic banks, foreign
branches of domestic banks, foreign subsidiaries of domestic
banks, domestic and foreign branches of foreign banks and thrift
institutions, repurchase agreements, and high quality domestic
and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of
interest. See "Risk Factors-Investing in Foreign Securities"
below. In addition, the Money Market Fund is permitted to lend
portfolio securities and enter into reverse repurchase
agreements to the extent described under "Appendix-Investment
Techniques." During normal market conditions, at least 25% of
the Fund's total assets will be invested in bank obligations.

The Fund will not invest more than 5% of its total assets
in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts issued by, a single
issuer, except that (i) the Fund may invest more than 5% of its
total assets in a single issuer for a period of up to three
business days in certain limited circumstances, (ii) the Fund
may invest in obligations issued or guaranteed by the U.S.
Government without any such limitation, and (iii) the limitation
with respect to puts does not apply to unconditional puts if no
more than 10% of the Money Market Fund's total assets is
invested in securities issued or guaranteed by the issuer of the
unconditional put. Investments in rated securities not rated in
the highest category by at least two rating organizations (or
one rating organization if the instrument was rated by only one
such organization), and unrated securities not determined by the
Board to be comparable to those rated in the highest category,
will be limited to 5% of the Money Market Fund's total assets,
with the investment in any one such issuer being limited to no
more than the greater of 1% of the Fund's total assets or
$1,000,000. As to each security, these percentages are measured
at the time the Money Market Fund purchases the security.

The Municipal Money Market Fund will invest at least 80% of
the value of its net assets (except when maintaining a temporary
defensive position) in short-term Municipal Obligations. Subject
to the requirements of Rule 2a-7, the Fund will engage in
management policies that are substantially identical to those of
the Intermediate Municipal Bond Fund. See "Appendix-Certain
Portfolio Securities-Municipal Obligations." The Fund also may
lend securities from its portfolio as described under
"Appendix-Investment Techniques."

CERTAIN FUNDAMENTAL POLICIES

Each Fund may (i) borrow money to the extent permitted under the
1940 Act, which currently limits borrowing to no more than 33
1/3% of the value of the Fund's total assets; and (ii) invest up
to 25% of the value of its total assets in the securities of
issuers in a single industry, provided there is no limitation on
the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or, in the case of
the Municipal Funds, Municipal Obligations. In addition, (i)
each of the Diversified Funds may invest up to 5% of its total
assets in the obligations of any one issuer, except that up to
25% of the value of the Fund's total assets may be invested
(subject, in the case of the Money Market Funds, to the
provisions of Rule 2a-7), and obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities may be
purchased, without regard to any such limitation; and (ii) the
Money Market Fund will invest, except when it has adopted a
temporary defensive position, at least 25% of its total assets
in securities issued by banks, including foreign banks and
branches. This paragraph describes fundamental policies that
cannot be changed as to a Fund without approval by the holders
of a majority (as defined in the 1940 Act) of such Fund's
outstanding voting shares. See "Investment Objectives and
Management Policies-Investment Restrictions" in the Statement of
Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL
POLICIES

Each Fund may (i) purchase securities of any company having less
than three years' continuous operation (including operations of
any predecessors) if such purchase does not cause the value of
such Fund's investments in all such companies to exceed 10% of
the value of its total assets; (ii) pledge, hypothecate,
mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% (10% in the
case of the Money Market Funds) of the value of its net assets
in repurchase agreements providing for settlement in more than
seven days after notice and in other illiquid securities. See
"Investment Objectives and Management Policies-Investment
Restrictions" in the Statement of Additional Information.

RISK FACTORS

General

Since each Fund will pursue different types of investments, the
risks of investing will vary depending on the Fund selected for
investment. Before selecting a Fund in which to invest, the
investor should assess the risks associated with the types of
investments made by the Fund. The net asset value per share of
each Fund, other than a Money Market Fund, is not fixed and
should be expected to fluctuate. Investors should consider each
Fund as a supplement to an overall investment program and should
invest only if they are willing to undertake the risks involved.
See also the Appendix beginning on page A-1 for a further
discussion of certain considerations.

Investment Techniques

Each Fund may engage in various investment techniques to the
extent described herein. The use of investment techniques such
as short-selling, engaging in financial futures and options
transactions, leverage through borrowing, purchasing securities
on a forward commitment basis, and lending portfolio securities-
techniques that are not necessarily employed by each
Fund-involves greater risk than that incurred by many other
funds with similar objectives that do not engage in such
techniques. See "Appendix-Investment Techniques." Futures and
options transactions involve derivative securities. Using these
techniques may produce higher than normal portfolio turnover and
may affect the degree to which a Fund's net asset value
fluctuates. Higher portfolio turnover rates are likely to result
in comparatively greater brokerage commissions or transaction
costs. In addition, short-term gains realized from portfolio
transactions are taxable to shareholders as ordinary gains.

A Fund's ability to engage in certain short-term
transactions may be limited by the requirement that, to qualify
as a regulated investment company, it must earn less than 30% of
its gross income from the disposition of securities held for
less than three months. This 30% test limits the extent to which
a Fund may sell securities held for less than three months and
invest in certain futures contracts, among other strategies.
However, portfolio turnover will not otherwise be a limiting
factor in making investment decisions. See "Portfolio
Transactions" in the Statement of Additional Information.

Equity Securities

(Asset Allocation and Equity Funds only) Investors should be
aware that Equity Securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities,
and that fluctuations can be pronounced. Changes in the value of
a Fund's portfolio securities will result in changes in the
value of such Fund's shares and thus the Fund's yield and total
return to investors.

The securities of the smaller companies may be subject to
more abrupt or erratic market movements than larger, more-
established companies, both because the securities typically are
traded in lower volume and because the issuers typically are
subject to a greater degree to changes in earnings and
prospects.

Fixed-Income Securities

(Asset Allocation, Equity, Bond and Municipal Bond Funds and, to
a limited extent, each Money Market Fund) Investors should be
aware that even though interest-bearing securities are
investments which promise a stable stream of income, the prices
of such securities are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price
fluctuations. The values of Fixed-Income Securities also may be
affected by changes in the credit rating or financial condition
of the issuing entities. Certain securities that may be
purchased by these Funds, such as those rated Baa by Moody's and
BBB by S&P, Fitch and Duff, may be subject to such risk with
respect to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated Fixed-Income
Securities. See "Lower Rated Securities" below and
"Appendix-Certain Portfolio Securities-Ratings" and Appendix in
the Statement of Additional Information.

Lower Rated Securities

(Asset Allocation, Equity Income, Growth, Special Opportunities,
Bond and International Bond Funds only) Investors should
carefully consider the relative risks of investing in the higher
yielding (and, therefore, higher risk) debt securities rated
below investment grade by Moody's, S&P, Fitch or Duff (commonly
known as junk bonds). Each of the Bond Fund and International
Bond Fund may invest up to 35% of the value to its net assets in
debt securities rated as low as B by Moody's, S&P, Fitch and
Duff. The Managed Assets Fund may invest up to 20% of its net
assets in debt securities, and each of the Equity Income, Growth
and Special Opportunities Funds may invest up to 35%, and the
Managed Assets Income Fund may invest up to 5%, of its net
assets in convertible securities, rated as low as the lowest
rating assigned by Moody's, S&P, Fitch or Duff. The Bond Fund,
International Bond Fund, Equity Income Fund, Growth Fund and
Special Opportunities Fund each intend to invest less than 35%
of the value of its net assets in such securities. Securities
rated below investment grade generally are not meant for
short-term investing and may be subject to certain risks with
respect to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated fixed-income
securities. Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well
assured and often the protection of interest and principal
payments may be very moderate. Securities rated BB by S&P, Fitch
or Duff are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they
face major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments. Securities rated C by Moody's are regarded as having
extremely poor prospects of ever attaining any real investment
standing. Securities rated D by S&P, Fitch and Duff are in
default and the payment of interest and/or repayment of
principal is in arrears. Such securities, though high yielding,
are characterized by great risk. See Appendix in the Statement
of Additional Information for a general description of
securities ratings. Although these ratings may be
an initial criterion for selection of portfolio investments, the
Investment Adviser also will evaluate these securities and the
ability of the issuers of such securities to pay interest and
principal. The Fund's ability to achieve its investment
objectives may be more dependent on the Investment Adviser's
credit analysis than might be the case for a fund that invested
in higher rated securities. See "Appendix- Certain Portfolio
Securities-Fixed-Income Securities-Ratings."

The market price and yield of securities rated Ba or lower
by Moody's and BB or lower by S&P, Fitch or Duff are more
volatile than those of higher rated securities. Factors
adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In
addition, the retail secondary market for these securities may
be less liquid than that of higher rated securities; adverse
conditions could make it difficult at times for the Fund to sell
certain securities or could result in lower prices than those
used in calculating such Fund's net asset value.

The market values of certain lower rated debt securities
tend to reflect specific developments with respect to the issuer
to a greater extent than do higher rated securities, which react
primarily to fluctuations in the general level of interest
rates, and tend to be more sensitive to economic conditions than
are higher rated securities. Issuers of such debt securities
often are highly leveraged and may not have available to them
more traditional methods of financing. Therefore, the risk
associated with acquiring the securities of such issuers
generally is greater than is the case with higher rated
securities.

Municipal Obligations

(Municipal Funds only) Certain provisions in the Code relating
to the issuance of Municipal Obligations may reduce the volume
of Municipal Obligations qualifying for Federal tax exemption.
One effect of these provisions could be to increase the cost of
the Municipal Obligations available for purchase by the
Municipal Funds and thus reduce the available yield.
Shareholders of the Municipal Funds should consult their tax
advisers concerning the effect of these provisions on an
investment in the Fund. Proposals that may restrict or eliminate
the income tax exemption for interest on Municipal Obligations
may be introduced in the future. If any such proposal were
enacted that would reduce the availability of Municipal
Obligations for investment by any of these Funds so as to
adversely affect its shareholders, the Board
would reevaluate the affected Fund's investment objective and
policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were
enacted that would treat a type of Municipal Obligation as
taxable, the Municipal Funds would treat such security as a
permissible taxable investment within the applicable limits set
forth herein.

Each Municipal Fund may invest more than 25% of the value
of its total assets in Municipal Obligations which are related
in such a way that an economic, business or political
development or change affecting one such security also would
affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of
projects, or securities of issuers that are located in the same
state. As a result, each Municipal Fund may be subject to
greater risk as compared to a fund that does not follow this
practice.

Certain municipal lease/purchase obligations in which the
Municipal Funds may invest may contain "non-appropriation"
clauses which provide that the municipality has no obligation to
make lease payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation"
lease/purchase obligations are secured by the leased property,
disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, the
Investment Adviser will consider, on an ongoing basis, a number
of factors including the likelihood that the issuing
municipality will discontinue appropriating funding for the
leased property.

Foreign Securities

(Asset Allocation, Growth, Special Opportunities, International
Equity and International Bond Funds and, to a limited extent,
Equity Income, Bond, Intermediate Bond and Money Market Funds
only) Foreign securities markets generally are not as developed
or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than
securities of comparable U.S. issuers. Similarly, volume and
liquidity in most foreign securities markets are less than in
the United States and, at times, volatility of price can be
greater than in the United States. In addition, there may be
less publicly available information about a non-U.S. issuer, and
non-U.S. issuers generally are not subject to uniform accounting
and financial reporting standards, practices and requirements
comparable to those applicable to U.S. issuers. See
"Appendix-Certain Portfolio Securities-Taxable Money Market
Securities-Bank Obligations."

Because evidences of ownership of such securities usually
are held outside the United States, each of these Funds will be
subject to additional risks which include possible adverse
political and economic developments, possible seizure or
nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities or
might restrict the payment of principal and interest to
investors located outside the country of the issuers, whether
from currency blockage or otherwise. Custodial expenses for a
portfolio of non-U.S. securities generally are higher than for a
portfolio of U.S. securities.

Many developing countries have experienced substantial, and
in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have
had and may continue to have adverse effects on the economies
and securities markets of certain of these countries. In an
attempt to control inflation, wage and price controls have been
imposed in certain countries. To the extent a Fund invests in
sovereign debt obligations, the Fund will be exposed to the
direct or indirect consequences of political, social and
economic changes in various developing countries. Political
changes in a country may affect the willingness of a foreign
government to make or provide for timely payments of its
obligations. The country's economic status, as reflected, among
other things, in its inflation rate, the amount of its external
debt and its gross domestic product, also will affect the
government's ability to honor its obligations.

Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations. Some currency exchange costs generally will be
incurred when a Fund changes investments from one country to
another.

Furthermore, some of these securities may be subject to
brokerage or stamp taxes levied by foreign governments, which
have the effect of increasing the cost of such investment and
reducing the realized gain or increasing the realized loss on
such securities at the time of sale. Income received by a Fund
from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States,
however, may reduce or eliminate such taxes. All such taxes paid
by a Fund will reduce its net income available for distribution
to its shareholders.

Foreign Currency Exchange

(Asset Allocation, Growth, Special Opportunities, International
Equity and International Bond Funds only) Currency exchange
rates may fluctuate significantly over short periods of time.
They generally are determined by the forces of supply and demand
in the foreign exchange markets and the relative merits of
investments in different countries, actual or perceived changes
in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be
affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by
currency controls or political developments in the United States
or abroad.

The foreign currency market offers less protection against
defaults in the forward trading of currencies than is available
when trading in currencies occurs on an exchange. Since a
forward currency contract is not guaranteed by an exchange or
clearinghouse, a default on the contract would deprive the Fund
of unrealized profits or force such Fund to cover its
commitments for purchase or resale, if any, at the current
market price.

Foreign Commodity Transactions

(Asset Allocation, Growth, Special Opportunities, International
Equity and International Bond Funds only) Unlike trading on
domestic commodity exchanges, trading on foreign commodity
exchanges is not regulated by the Commodity Futures Trading
Commission (the "CFTC") and may be subject to greater risks than
trading on domestic exchanges. For example, some foreign
exchanges are principal markets so that no common clearing
facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits that the
Fund might realize in trading could be eliminated by adverse
changes in the exchange rate, or such Fund could incur losses as
a result of those changes. Transactions on foreign exchanges may
include both commodities which are traded on domestic exchanges
and those which are not.

Mortgage-Related Securities

(Asset Allocation, Equity and Bond Funds only) No assurance can
be given as to the liquidity of the market for certain mortgage-
backed securities, such as collateralized mortgage obligations
and stripped mortgage-backed securities. Determination as to the
liquidity of interest-only and principal-only fixed mortgage-
backed securities issued by the U.S. Government or its agencies
and instrumentalities will be made in accordance with guidelines
established by the Board. In accordance with such guidelines,
the Investment Adviser will monitor investments in such
securities with particular regard to trading activity,
availability of reliable price information and other relevant
information. Each of these Funds intends to treat other stripped
mortgage-backed securities as illiquid securities.
Mortgage-related securities are a form of derivative security.
See "Appendix- Certain Portfolio Securities-Fixed-Income
Securities-Mortgage-Related Securities" and "-Illiquid
Securities."

Zero Coupon Securities

(Asset Allocation, Equity, Bond and Municipal Bond Funds only)
Federal income tax law requires the holder of a zero coupon
security or of certain pay-in-kind bonds to accrue income with
respect to these securities prior to the receipt of cash
payments. To maintain its qualification as a regulated
investment company and avoid liability for Federal income taxes,
each Fund that invests in such securities may be required to
distribute such income accrued with respect to these securities
and may have to dispose of portfolio securities under
disadvantageous circumstances in order to generate cash to
satisfy these distribution requirements. Such Fund will not be
able to purchase additional income producing securities with
cash used to make such distributions and its current income may
be reduced as a result.

Other Investment Considerations

The classification of each Non-Diversified Fund as a "non-
diversified" investment company means that the proportion of
such Fund's assets that may be invested in the securities of a
single issuer is not limited by the 1940 Act. A "diversified"
investment company is required by the 1940 Act generally, with
respect to 75% of its total assets, to invest not more than 5%
of such assets in the securities of a single issuer and to hold
not more than 10% of the voting securities of any single issuer.
However, each Fund intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of the
Code, which requires that, at the end of each quarter of its
taxable year, (i) at least 50% of the market value of its total
assets be invested in cash, U.S. Government securities, the
securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited
for the purposes of this calculation to an amount not greater
than 5% of the value of each such Fund's total assets and 10% of
the outstanding voting securities of such issuer, and (ii) not
more than 25% of the value of its total assets be invested in
the securities of any one issuer (other than U.S. Government
securities or the securities of other regulated investment
companies). Since a relatively high percentage of each
Non-Diversified Fund's assets may be invested in the securities
of a limited number of issuers, some of which may be within the
same industry or economic sector, its portfolio securities may
be more susceptible to any single economic, political or
regulatory occurrence than the portfolio securities of a
diversified investment company.

Investment decisions for each Fund are made independently
from those of the other investment companies or investment
advisory accounts that may be advised by the Investment Adviser.
However, if such other investment companies or managed accounts
are prepared to invest in, or desire to dispose of, securities
in which a Fund invests at the same time as the Fund, available
investments or opportunities for sales will be allocated
equitably to each of them. In some cases, this procedure may
adversely affect the size of the position obtained for or
disposed of by a Fund or the price paid or received by a Fund.

Alternative Purchase Methods

This Prospectus offers investors three methods of purchasing
Fund shares. Orders for purchases of Class I shares, however,
may be placed only for certain eligible investors as described
below. An investor who is not eligible to purchase Class I
shares may choose from Class A and Class B the Class of shares
that best suits the investor's needs, given the amount of
purchase, the length of time the investor expects to hold the
shares and any other relevant circumstances. Each Class A, Class
B and Class I share represents an identical pro rata interest in
a Fund's investment portfolio.

Class A shares are sold at net asset value per share plus,
for each Fund other than a Money Market Fund, a maximum initial
sales charge of 4.50% (3.00% in the case of the Intermediate
Bond Fund and Intermediate Municipal Bond Fund) of the public
offering price imposed at the time of purchase. The initial
sales charge may be reduced or waived for certain purchases. See
"How to Buy Shares-Class A Shares." Class A shares of each Fund
are subject to an annual service fee at the rate of up to .25%
of the value of the average daily net assets of Class A. See
"Distribution Plans and Shareholder Services Plans." Class A
shares held by investors who after purchasing Class A shares
establish a Fiduciary Account will convert to Class I shares
automatically upon the establishment of such Account, based on
the relative net asset values for shares of each such Class.

Class B shares are sold at net asset value per share with
no initial sales charge at the time of purchase; as a result,
the entire purchase price is immediately invested in the Fund.
Class B shares are subject to a maximum 5.00% (3.00% in the case
of the Intermediate Bond Fund and Intermediate Municipal Bond
Fund) CDSC, which is assessed only if Class B shares are
redeemed within six years (five years in the case of the
Intermediate Bond Fund and Intermediate Municipal Bond Fund) of
purchase. Class B shares of the Money Market Fund may be
acquired only through exchanges with Class B shares of the other
Funds and are subject to the CDSC, if any, of the shares with
which the exchange is made. See "How to Buy Shares-Class B
Shares" and "How to Redeem Shares-Contingent Deferred Sales
Charge-Class B Shares." Class B shares are subject to an annual
service fee and distribution fee.
See "Distribution Plans and Shareholder Services Plans."
Approximately eight years (seven years in the case of the
Intermediate Bond Fund and Intermediate Municipal Bond Fund)
after the date of purchase, Class B shares automatically will
convert to Class A shares, based on the relative net asset
values for shares of each such Class, and will no longer be
subject to the distribution fee. Class B shares that have been
acquired through the reinvestment of dividends and distributions
will be converted on a pro rata basis together with other Class
B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares
not acquired through the reinvestment of dividends and
distributions.

Class I shares are sold at net asset value with no sales
charge. Class I shares are sold exclusively to qualified trust,
custody and/or agency account clients of FNBC, ANB or their
affiliates ("Fiduciary Accounts") and to qualified benefit plans
or other programs with assets of at least $100 million invested
in shares of the Fund or other investment companies or accounts
advised by the Investment Adviser ("Eligible Retirement Plans").
Class I shares are not subject to an annual service fee or
distribution fee. Class I shares held by investors who after
purchasing Class I shares for their Fiduciary Accounts withdraw
from such Accounts will convert to Class A shares automatically
upon such withdrawal, based on the relative net asset values for
shares of each such Class, and will be subject to the annual
service fee charged Class A.

Class B shares will receive lower per share dividends and
at any given time the performance of Class B should be expected
to be lower than for shares of each other Class because of the
higher expenses borne by Class B. Similarly, Class A shares will
receive lower per share dividends and the performance of Class A
should be expected to be lower than Class I shares because of
the higher expenses borne by Class A. See "Fee Table."

An investor who is not eligible to purchase Class I shares
should consider whether, during the anticipated life of the
investor's investment in the Fund, the accumulated distribution
fee and CDSC on Class B shares prior to conversion would be less
than the initial sales charge, if any, on Class A shares
purchased at the same time, and to what extent, if any, such
differential would be offset by the return of Class A.
Additionally, investors qualifying for reduced initial sales
charges who expect to maintain their investment for an extended
period of time might consider purchasing Class A shares because
the accumulated continuing distribution fees on Class B shares
may exceed the initial sales charge on Class A shares during the
life of the investment. Generally, Class A shares may be more
appropriate for investors who invest $500,000 or more in Fund
shares.

How to Buy Shares

INFORMATION APPLICABLE TO ALL
PURCHASERS

When purchasing Fund shares, an investor must specify the Class
of shares being purchased. If no Class of shares is specified,
Class A shares will be purchased.

Class A and Class B shares are offered to the general
public and may be purchased through a number of institutions,
including FCIMCO, FNBC, ANB and their affiliates, other Service
Agents, and directly through the Distributor. Class B shares of
the Money Market Fund may be acquired only through the exchange
of Class B shares of the other Funds.

Orders for purchases of Class I shares may be placed only
for clients of FNBC, ANB or their affiliates for their Fiduciary
Accounts maintained at FNBC, ANB or one of their affiliates and
Eligible Retirement Plans with assets of at least $100 million
invested in shares of the Funds or other investment companies or
accounts advised by the Investment Adviser. Class I shares may
be purchased for a Fiduciary Account or Eligible Retirement Plan
only by a custodian, trustee, investment manager or other entity
authorized to act on behalf of such Account or Plan.

Share certificates will not be issued. It is not
recommended that any of the Municipal Funds be used as a vehicle
for Keogh, IRA or other qualified retirement plans. The Funds
reserve the right to reject any purchase order.

The minimum initial investment for each Class is $1,000.
However, for IRAs and other retirement plans, the minimum
initial purchase is $250. All subsequent investments must be at
least $100. The initial investment must be accompanied by the
Account Application. FCIMCO and Service Agents may impose
initial or subsequent investment minimums which are higher or
lower than those specified above and may impose different
minimums for different types of accounts or purchase
arrangements.

As to each Fund, net asset value per share of each Class is
computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of its assets less
liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the
Statement of Additional Information.

Each Money Market Fund's net asset value per share is
determined as of 12:00 Noon, New York time, on each business day
(which, as used herein, shall include each day the New York
Stock Exchange is open for business, except Martin Luther King,
Jr. Day, Columbus Day and Veterans Day).

Shares of each Money Market Fund are sold on a continuous
basis at the net asset value per share next determined after an
order in proper form and Federal Funds (moneys of member banks
within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent. If an
investor does not remit Federal Funds, his payment must be
converted into Federal Funds. This usually occurs within one
business day of receipt of a bank wire and within two business
days of receipt of a check drawn on a member bank of the Federal
Reserve System. Checks drawn on banks which are not members of
the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds,
the investor's money will not be invested.

For each Fund, other than the Money Market Funds, shares
are sold on a continuous basis at the public offering price
(i.e., net asset value plus the applicable sales load, if any,
set forth below). Net asset value per share of these Funds is
determined as of the close of trading on the floor of the New
York Stock Exchange (currently 4:00 p.m., New York time), on
each business day. For purposes of determining net asset value
per share, options and futures contracts will be valued 15
minutes after the close of trading on the New York Stock
Exchange. Each of these Funds' investments are valued each
business day by one or more independent pricing services
approved by the Board and are valued at fair value as determined
by the pricing service. Each pricing service's procedures are
reviewed under the general supervision of the Board.

For each Fund, other than the Money Market Funds, if an
order is received by the Transfer Agent by the close of trading
on the floor of the New York Stock Exchange (currently 4:00
p.m., New York time) on any business day, shares will be
purchased at the public offering price determined as of the
close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, shares will be purchased at the public
offering price determined as of the close of trading on the
floor of the New York Stock Exchange on the next business day.

Federal regulations require that an investor provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes"
and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund
could subject an investor to a $50 penalty imposed by the
Internal Revenue Service (the "IRS").

Class A Shares

The public offering price for Class A shares of each Fund, other
than the Money Market Funds, is the net asset value per share of
that Class plus a sales load as shown below:

ASSET ALLOCATION FUNDS, EQUITY FUNDS, BOND FUND,
INTERNATIONAL BOND FUND AND MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Total Sales
Load

AMOUNT OF TRANSACTION As a % of As a % of net asset Dealers' Reallowance as
offering price value per share a % of offering price
per share

<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.00

$50,000 to less than $100,000 4.00 4.20 3.50

$100,000 to less than $250,000 3.00 3.10 2.50

$250,000 to less than $500,000 2.00 2.00 1.50

$500,000 to less than $1,000,000 1.50 1.50 1.25

$1,000,000 and above none none none
</TABLE>

INTERMEDIATE BOND FUND AND
INTERMEDIATE MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Total Sales
Load

AMOUNT OF TRANSACTION As a % of As a % of net asset Dealers' Reallowance as
offering price value per share a % of offering price
per share
<S> <C> <C> <C>
Less than $50,000 3.00 3.10 2.75

$50,000 to less than $100,000 2.50 2.60 2.25

$100,000 to less than $250,000 2.00 2.00 1.75

$250,000 to less than $500,000 1.50 1.50 1.25

$500,000 to less than $1,000,000 1.00 1.00 0.75

$1,000,000 and above none none none
</TABLE>

There is no initial sales charge on purchases of $1,000,000
or more of Class A shares. However, if an investor purchases
Class A shares without an initial sales charge as part of an
investment of at least $1,000,000 and redeems those shares
within a certain period after purchase, a CDSC will be imposed
at the time of redemption as described below. The terms set
forth under "How to Redeem Fund Shares-Contingent Deferred Sales
Charge-Class B" (other than the amount of the CDSC and its time
periods) are applicable to the Class A shares subject to a CDSC.
Letter of Intent and Right of Accumulation apply to such
purchases of Class A shares. The following table sets forth the
rates of such CDSC for the indicated time periods:
<TABLE>
<CAPTION>
Amount of Transactions CDSC as a % of Amount Invested Year Since Purchase Payment
at Offering Price or Redemption Proceeds Was Made
<S> <C> <C>
$1,000,000 to less than $2,500,000 1.00% First or Second

$2,500,000 to less than $5,000,0000 .50% First

$5,000,000 and above 0.25% First
</TABLE>

The dealer reallowance may be changed from time to time but
will remain the same for all dealers. With respect to purchases
of $1,000,000 or more of Class A shares made through Service
Agents, the Distributor may pay such Service Agents from its own
funds a fee of up to .75% for the Intermediate Bond Fund and
Intermediate Municipal Bond Fund and 1.00% for each other Fund
of the amount invested to compensate such Service Agents for
their distribution assistance in connection with such purchases.

Full-time employees of NASD member firms and full time
employees of other financial institutions which have entered
into an agreement with the Distributor pertaining to the sale of
Fund shares (or which otherwise have a brokerage-related or
clearing arrangement with an NASD member firm or other financial
institution with respect to sales of Fund shares), their spouses
and minor children, and accounts opened by a bank, trust company
or thrift institution, acting as a fiduciary or custodian, may
purchase Class A shares for themselves or itself, as the case
may be, at net asset value, provided that they have furnished
the Distributor appropriate notification of such status at the
time of the investment and such other information as it may
request from time to time in order to verify eligibility for
this privilege. This privilege also applies to full-time
employees of financial institutions affiliated with NASD member
firms whose employees are eligible to purchase Class A shares at
net asset value. In addition, Class A shares may be purchased at
net asset value for accounts registered under the Uniform Gifts
to Minors Act or Uniform Transfers to Minors Act which are
opened through FCIS and 401(k) and other defined contribution or
qualified retirement plan accounts for which FNBC or ANB serves
as administrator. Class A shares are also offered at net asset
value to directors and full-time or part-time employees of First
Chicago Corporation, or any of its affiliates and subsidiaries,
retired employees of First Chicago Corporation, or any of its
affiliates and subsidiaries, Board members of a fund advised by
the Investment Adviser, including members of the Funds' Board,
or the spouse or minor child of any of the foregoing.

Class A shares may be purchased at net asset value through
certain broker-dealers, registered investment advisers and other
financial institutions which have entered into an agreement with
the Distributor, which includes a requirement that such shares
be sold for the benefit of clients participating in a "wrap
account" or a similar program under which such clients pay a fee
to such broker-dealer, registered investment adviser or other
financial institution. FCIMCO will pay a fee of up to 1% of the
amount invested by a participant in its Investment Architect
Account, or any other wrap account, to FCIS, FNBC or other
third-parties.

Class A shares also may be purchased at net asset value,
without a sales charge, with the proceeds from the redemption of
shares of an investment company sold with a sales charge or
commission and not distributed by the Distributor or annuity
contract or guaranteed investment contract subject to a
surrender charge. This also includes shares of an investment
company that were or would be subject to a contingent deferred
sales charge upon redemption. The purchase must be made within
60 days of the redemption, and the Distributor must be notified
in writing by the investor, or by the investor's investment
professional, at the time the purchase is made.

Class A shares also will be offered at net asset value
without a sales load to employees participating in qualified or
nonqualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or
programs have a minimum of 250 employees eligible for
participation in such plans or programs or (ii) such plan's or
program's assets exceed one million dollars ("Eligible Benefit
Plans").

Class B Shares

The public offering price for Class B shares is the net asset
value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
certain redemptions of Class B shares, as described under "How
to Redeem Shares." The Distributor may compensate certain
Service Agents for selling Class B shares at the time of
purchase from its own assets. Proceeds of the CDSC and
distribution fees payable to the Distributor, in part, would be
used to defray these expenses.

Class I Shares

The public offering price for Class I shares is the net asset
value per share of that Class. No sales charge is imposed for
Class I shares.

Purchasing Shares Through Accounts with
FCIMCO, FNBC, ANB or a Service Agent

Investors who desire to purchase shares through their accounts
at FCIMCO, FNBC, ANB or their affiliates or a Service Agent
should contact such entity directly for appropriate
instructions, as well as for information about conditions
pertaining to the
account and any related fees. Service Agents, FCIMCO, FNBC and
ANB may charge clients direct fees for effecting transactions in
shares, as well as fees for other services provided to clients
in connection with accounts through which shares are purchased.
These fees, if any, would be in addition to fees received by a
Service Agent under a Shareholder Services Plan or fees received
by FCIMCO under an Investment Advisory Agreement or
Administration Agreement. Each Service Agent has agreed to
transmit to its clients a schedule of such fees. In addition,
Service Agents, FCIMCO, FNBC and ANB may receive different
levels of compensation for selling different Classes of shares
and may impose minimum account and other conditions, including
conditions which might affect the availability of certain
shareholder privileges described in this Prospectus. Certain
investor accounts with FNBC, ANB and their affiliates and
certain Service Agents may be eligible for an automatic
investment privilege,
commonly called a "sweep," under which amounts in excess of a
certain minimum held in these accounts will be invested
automatically in shares at predetermined intervals. Each
investor desiring to use this privilege should consult FNBC, ANB
or his Service Agent for details. It is the responsibility of
FNBC, ANB and Service Agents to transmit orders on a timely
basis.

Copies of the Prospectus and Statement of Additional
Information may be obtained from the Distributor, FCIMCO,
certain affiliates of FCIMCO or certain Service Agents, as well
as from the Funds.

Right of Accumulation-Class A Shares

Reduced sales loads apply to any purchase of Class A shares
where the dollar amount of shares being purchased, plus the
value of shares of such Fund, shares of other Funds, and shares
of certain other investment companies advised by the Investment
Adviser purchased with a sales load or acquired by a previous
exchange of shares purchased with a sales load (hereinafter
referred to as "Eligible Funds") held by an investor and any
related "purchaser" as defined in the Statement of Additional
Information, is $50,000 or more. If, for example, an investor
previously purchased and still holds Class A shares of the
Equity Income Fund, or of any other Eligible Fund or combination
thereof, with an aggregate current market value of $40,000 and
subsequently purchases Class A shares of such Fund or an
Eligible Fund having a current value of $20,000, the sales load
applicable to the subsequent purchase
would be reduced to 4.00% of the offering price (4.20% of the
net asset value). All present holdings of Eligible Funds may be
combined to determine the current offering price of the
aggregate investment in ascertaining the sales load applicable
to each subsequent purchase.

To qualify for reduced sales loads, at the time of a
purchase an investor or his Service Agent must notify the
Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to
confirmation of the investor's holdings through a check of
appropriate records.

Shareholder Services

The Exchange Privilege and Automatic Investment Plan are
available to shareholders of any Class. The Letter of Intent and
Reinstatement Privilege are available only for Class A and Class
B shareholders, respectively. In addition, such services and
privileges may not be available to clients of certain Service
Agents and some Service Agents may impose certain conditions on
their clients which are different from those described in this
Prospectus. Each investor should consult his Service Agent in
this regard.

EXCHANGE PRIVILEGE

The Exchange Privilege enables an investor to purchase, in
exchange for shares of a Fund, shares of the same Class of the
other Funds. This privilege may be expanded to permit exchanges
between a Fund and other funds that, in the future, may be
advised by the Investment Adviser. Exchanges may be made to the
extent the shares being received in the exchange are offered for
sale in the shareholder's state of residence.

Shares of the same Class of Funds purchased by exchange
will be purchased on the basis of relative net asset value per
share as follows:

A. Shares of Funds purchased with or without a sales load
may be exchanged without a sales load for shares of other Funds
sold without a sales load.

B. Shares of Funds purchased without a sales load may be
exchanged for shares of other Funds sold with a sales load, and
the applicable sales load will be deducted.

C. Shares of Funds purchased with a sales load, shares of
Funds acquired by a previous exchange from shares purchased with
a sales load and additional shares acquired through reinvestment
of dividends or distributions of any such Funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other Funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be
deducted.

D. Shares of Funds subject to a CDSC that are exchanged for
shares of another Fund will be subject to the higher applicable
CDSC of the two Funds, and for purposes of calculating CDSC
rates and conversion periods, if any, will be deemed to have
been held since the date the shares being exchanged were
initially purchased.

To accomplish an exchange under item C above, shareholders
must notify the Transfer Agent of their prior ownership of Fund
shares and their account number.

No fees currently are charged shareholders directly in
connection with exchanges although the Funds reserve the right,
upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Funds reserve the
right to reject any exchange request in whole or in part. The
Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.

The exchange of shares of one Fund for shares of another is
treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss.

LETTER OF INTENT-CLASS A SHARES

By signing a Letter of Intent form, available from the
Distributor, FCIMCO, certain affiliates of FCIMCO, or certain
Service Agents, an investor becomes eligible for the reduced
sales load applicable to the total number of Eligible Fund
shares
purchased in a 13-month period (beginning up to 30 days before
the date of execution of the Letter of Intent) pursuant to the
terms and conditions set forth in the Letter of Intents. A
minimum initial purchase of $5,000 is required. To compute the
applicable sales load, the offering price of shares the investor
holds (on the date of submission of the Letter of Intent) in any
Eligible Fund that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward
completion of the Letter of Intent. However, the reduced sales
load will be applied only to new purchases.

The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales
load if the investor does not purchase the full amount indicated
in the Letter of Intent. The escrow will be released when the
investor fulfills the terms of the Letter of Intent by
purchasing the specified amount. Assuming completion of the
total minimum investment specified under a Letter of Intent, an
adjustment will be made to reflect any reduced sales load
applicable to shares purchased during the 30-day period before
submission of the Letter of Intent. In addition, if the
investor's purchases qualify for a further sales load reduction,
the sales load will be adjusted to reflect the investor's total
purchase at the end of 13 months. If total purchases are less
than the amount specified, the investor will be requested to
remit an amount equal to the difference between the sales load
actually paid and the sales load applicable to the aggregate
purchases actually made. If such remittance is not received
within 20 days, the Transfer Agent, as attorney-in-fact pursuant
to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the
difference. Signing a Letter of Intent does not bind the
investor to purchase, or the Trust to sell, the full amount
indicated at the sales load in effect at the time of signing,
but the investor must complete the intended
purchase to obtain the reduced sales load. At the time an
investor purchases Class A shares, the investor must indicate
his or her intention to do so under a Letter of Intent.

AUTOMATIC INVESTMENT PLAN

The Automatic Investment Plan permits an investor to purchase
shares at regular intervals selected by the investor. Provided
the investor's bank or other financial institution allows
automatic withdrawals, shares may be purchased by transferring
funds from the bank account designated by the investor. At the
investor's option, the account designated will be debited in the
specified amount, and shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both
days. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be
so designated. To establish an Automatic Investment Plan
account, the investor must check the appropriate box and supply
the necessary information on the Account Application. Investors
may obtain the necessary applications from the Distributor.
Investors should be aware that periodic investment plans do not
guarantee a profit and will not protect an investor against loss
in a declining market. An investor may cancel his or her
participation in the Plan or change the amount of purchase at
any time by mailing written notification to Primary Funds
Service Corp., P.O. Box 9743, Providence, Rhode Island
02940-9743, and such notification will be effective three
business days following receipt. The Funds may modify or
terminate the Automatic Investment Plan at any time or charge a
service fee. No such fee currently is contemplated.

REINSTATEMENT PRIVILEGE

The Reinstatement Privilege enables investors who have redeemed
Class A or Class B shares to purchase, within 30 days of such
redemption, Class A shares without the imposition of a sales
load in an amount not to exceed the redemption proceeds
received. Class A shares so reinstated or purchased will be
offered at a purchase price equal to the then-current net asset
value of Class A determined after a reinstatement request and
payment for Class A shares are received by the Transfer Agent.
This privilege also enables such investors to reinstate their
account for the purpose of exercising the Exchange Privilege. To
use the Reinstatement Privilege, an investor must submit a
written reinstatement request to the Transfer Agent. The
reinstatement request and payment must be received within 30
days of the trade date of the redemption. There currently are no
restrictions on the number of times an investor may use this
privilege.

How to Redeem Shares

GENERAL

An investor may request redemption of his shares at any time.
Redemption requests should be transmitted to the Transfer Agent
as described below. An investor who has purchased shares through
his Fiduciary Account or as a participant in an Eligible
Retirement Plan must redeem shares by following instructions
pertaining to such Account or Plan. It is the responsibility of
the entity authorized to act on behalf of such Account or Plan
to transmit the redemption order to the Transfer Agent and
credit the investor's account with the redemption proceeds on a
timely basis. When a request is received in proper form, the
Fund will redeem the shares at the next determined net asset
value as described below. If an investor holds Fund shares of
more than one Class, any request for redemption must specify the
Class of shares being redeemed. If an investor fails to specify
the Class of shares to be redeemed, Class A shares will be
redeemed first. If an investor owns fewer shares of the Class
than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions
from the investor or his Service Agent.

The Funds impose no charges when shares are redeemed.
However, the Distributor may impose a CDSC as described below.
Service Agents may charge a nominal fee for effecting
redemptions
of Fund shares. The value of the shares redeemed may be more or
less than their original cost, depending upon the Fund's then-
current net asset value.

A Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a
redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission. However, if an
investor has purchased Fund shares by check or through the
Automatic Investment Plan and subsequently submits a written
redemption request to the Transfer Agent, the redemption
proceeds will be transmitted to the investor promptly upon bank
clearance of the investor's purchase check or Automatic
Investment Plan order, which may take up to eight business days
or more. In addition, the Fund will not honor Redemption Checks
for a period of eight business days after receipt by the
Transfer Agent of the purchase check or Automatic Investment
Plan order against which such redemption is requested. These
procedures will not apply if the investor otherwise has a
sufficient collected balance in his account to cover the
redemption request. Prior to the time any redemption is
effective, dividends on such shares will accrue
and be payable, and the investor will be entitled to exercise
all other rights of beneficial ownership. Fund shares will not
be redeemed until the Transfer Agent has received the investor's
Account Application.

Each Fund reserves the right to redeem an investor's
account at the Fund's option upon not less than 45 days' written
notice if the account's net asset value is $1,000 or less ($500
or less in the case of the Municipal Bond Fund) and remains so
during the notice period.

CONTINGENT DEFERRED SALES CHARGE-

CLASS B

A CDSC payable to the Distributor may be imposed on redemptions
of Class B shares depending on the number of years such shares
were held by the investor. The following tables set forth the
rates of the CDSC applied for the indicated Funds:

ASSET ALLOCATION FUNDS, EQUITY FUNDS, BOND FUND,
INTERNATIONAL BOND FUND AND MUNICIPAL BOND FUND

Year Since CDSC as a % of Amount
Purchase Payment Invested or
Was Made Redemption Proceeds

First 5.00

Second 4.00

Third 3.00

Fourth 3.00

Fifth 2.00

Sixth 1.00

Seventh None

Eighth *

* Conversion to Class A shares.

INTERMEDIATE BOND FUND AND INTERMEDIATE MUNICIPAL BOND FUND

Year Since Purchase CDSC as a % of Amount
Payment Was Made Invested or Redemption
Proceeds

First 3.00

Second 3.00

Third 2.00

Fourth 2.00

Fifth 1.00

Sixth None

Seventh *

* Conversion to Class A shares.

In determining whether a CDSC is applicable to a
redemption, the calculation will be made in a manner that
results in the lowest possible rate. Class B shares redeemed
will not be subject to a CDSC to the extent that the value of
such shares represents capital appreciation or reinvestment of
dividends or distributions. It will be assumed that the
redemption is made first of Class B shares acquired pursuant to
the reinvestment of dividends and distributions or representing
any capital appreciation in the value of the Class B shares held
by the investor; then of Class B shares held for the longest
period of time.

WAIVER OF CDSC

The CDSC will be waived in connection with (a) redemptions made
within one year after the death of the shareholder, (b)
redemptions by shareholders after age 70-1/2 for purposes of the
minimum required distribution from an IRA, Keogh plan or
custodial account pursuant to Section 403(b) of the Code, (c)
distributions from a qualified plan upon retirement or
termination of employment, (d) redemptions of shares acquired
through a contribution in excess of permitted amounts, (e) in-
service withdrawals from tax qualified plans by participants and
(f) redemptions initiated by a Fund of accounts with net assets
of less than $1,000 ($500 in the case of the Municipal Bond
Fund).

CONVERSION OF CLASS B SHARES

Class B shares automatically convert to Class A shares (and thus
become subject to the lower expenses borne by Class A shares) in
the eighth year (seventh year in the case of the Intermediate
Bond Fund and Intermediate Municipal Bond Fund) after the date
of purchase, together with the pro rata portion of all Class B
shares representing dividends and other distributions paid in
additional Class B shares. The conversion will be effected at
the relative net asset values per share of the two Classes on
the first business day of the month following the seventh
anniversary (sixth anniversary in the case of the Intermediate
Bond Fund and Intermediate Municipal Bond Fund) of the original
purchase. If any exchanges of Class B shares during the
eight-year or seven-year, as the case may be, period occurred,
the holding period for the shares exchanged will be counted
toward the eight-year or seven-year, as the case may be, period.
At the time of the conversion the net asset value per share of
the Class A shares may be higher or lower than the net asset
value per share of the Class B shares; as a result, depending on
the relative net asset values per share, a shareholder may
receive fewer or more Class A
shares than the number of Class B shares converted.

Each Fund reserves the right to cease offering Class B
shares for sale at any time or reject any order for the purchase
of Class B shares and to cease offering any services provided by
a Service Agent.

PROCEDURES

An investor who has purchased shares through his account at
FCIMCO, FNBC or a Service Agent must redeem shares by following
instructions pertaining to such account. If an investor has
given his Service Agent authority to instruct the Transfer Agent
to redeem shares and to credit the proceeds of such redemption
to a designated account at the Service Agent, the investor may
redeem shares only in this manner and in accordance with a
written redemption request described below. It is the
responsibility of FCIMCO, FNBC or the Service Agent, as the case
may be, to transmit the redemption order and credit the
investor's account with the redemption proceeds on a timely
basis.

An investor may redeem or exchange shares by telephone if
the investor has checked the appropriate box on the Account
Application. By selecting a telephone redemption or exchange
privilege, an investor authorizes the Transfer Agent to act on
telephone instructions from any person representing himself or
herself to be the investor, or a representative of the
investor's
Service Agent, and reasonably believed by the Transfer Agent to
be genuine. The Funds will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if
it does not follow such procedures, the Fund or the Transfer
Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent
will be liable for following telephone instructions reasonably
believed to be genuine.

During times of drastic economic or market conditions, an
investor may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of Fund
shares. In such cases, investors should consider using the other
redemption procedures described herein. Use of these other
redemption procedures may result in the investor's redemption
request being processed at a later time than it would have been
if telephone redemption had been used. During the delay, the
Fund's net asset value may fluctuate.

WRITTEN REDEMPTION REQUESTS

Investors may redeem shares by written request mailed to The
Prairie Family of Funds, P.O. Box 9743, Providence, Rhode Island
02940-9743. Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees
in proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and
savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program.

CHECK REDEMPTION PRIVILEGE

Class A of Money Market Funds only

A Money Market Fund shareholder may request on the Account
Application or by later written request to the Fund that the
Money Market Fund provide Redemption Checks drawn on the Fund's
account. Redemption Checks may be made payable to the order of
any person in the amount of $500 or more. Redemption Checks
should not be used to close an account. Redemption Checks are
free, but the Transfer Agent will impose a fee for stopping
payment of a Redemption Check at the investor's request or if
the Transfer Agent cannot honor the Redemption Check due to
insufficient funds or other valid reason. An investor should
date his Redemption Checks with the current date when the
investor writes them. Please do not postdate Redemption Checks.
If an investor does, the Transfer Agent will honor, upon
presentment, even if presented before the date of the check, all
postdated Redemption Checks which are dated within six months of
presentment of payment, if they are otherwise in good order.
This Privilege may be modified or terminated at any time by the
Fund or the Transfer Agent upon notice to shareholders.

Management of the Funds

INVESTMENT ADVISER AND ADMINISTRATOR

First Chicago Investment Management Company, located at Three
First National Plaza, Chicago, Illinois 60670, is each Fund's
investment adviser and administrator. FCIMCO is a newly-formed,
registered investment adviser and a wholly-owned subsidiary of
The First National Bank of Chicago ("FNBC"), which in turn is a
wholly-owned subsidiary of First Chicago Corporation, a
registered bank holding company. FNBC is a commercial bank
offering a wide range of banking and investment services to
customers throughout the United States and around the world. As
of March 31, 1995, FNBC was one of the largest commercial banks
in the United States and the largest in the mid-western United
States in terms of assets ($72.3 billion) and in terms of
deposits ($32.2 billion). As of March 31, 1995, FCIMCO provided
investment management services to portfolios containing
approximately $26 billion in assets.

FCIMCO serves as investment adviser for each Fund pursuant
to an Investment Advisory Agreement. Under the relevant
Investment Advisory Agreement, FCIMCO provides the day-to-day
management of each Fund's investments, subject to the overall
authority of the Board and in conformity with applicable state
law and the stated policies of the Fund. FCIMCO is responsible
for making investment decisions for each Fund, placing purchase
and sale orders (which may be allocated to various dealers based
on their sales of Fund shares) and providing research,
statistical analysis and continuous supervision of each Fund's
investment portfolio. FCIMCO has advised the Funds that in
making
its investment decisions FCIMCO does not obtain or use material
inside information in its or any of its affiliate's possession.

FCIMCO has engaged ANB-IMC, located at 1 North LaSalle
Street, Chicago, Illinois 60690, to serve as the International
Equity Fund's sub-investment adviser. ANB-IMC, a registered
investment adviser formed in 1973, is a wholly-owned subsidiary
of American National Bank and Trust Company, which in turn is a
wholly-owned subsidiary of First Chicago Corporation. As of
March 31, 1994, ANB-IMC managed approximately $17 billion in
assets, including over $500 million in international equities,
primarily for pension funds. ANB-IMC, subject to the supervision
and approval of FCIMCO, provides investment advisory assistance
and the day-to-day management of the International Equity Fund's
investments, as well as investment research and statistical
information, under a Sub-Investment Advisory Agreement with
FCIMCO, subject to the overall authority of the Board in
accordance with Massachusetts law.

The Funds' primary portfolio managers will be: for Managed
Assets Income Fund, Claude B. Erb, who has been employed by FNBC
since 1993 and, prior thereto, was Deputy Chief Investment
Officer and Senior Vice President for Trust Services of America
and TSA Capital Management; for Managed Assets Fund, Claude B.
Erb; for Equity Income Fund, Growth Fund and Special
Opportunities Fund, James V. Moeller, who has been employed by
FNBC since 1976; for International Equity Fund, Peter M.
Jankovskis, who has been employed by ANB-IMC since 1992 and,
prior thereto, was a faculty member of the University of
California at Santa Barbara, and Neil R. Wright, who has been
employed by ANB-IMC since 1981; for Bond Fund, Annette Marie
Cole, who has been employed by FNBC since 1984, and Mark M.
Quinn, who has been employed by FNBC since 1984; for
Intermediate
Bond Fund, Annette Marie Cole; for International Bond Fund,
Claude B. Erb; and for Intermediate Municipal Bond Fund and
Municipal Bond Fund, John Erickson, who has been employed by
FNBC since 1979.

Under the terms of the relevant Investment Advisory
Agreement, FCIMCO receives a monthly fee at the annual rate of
.65% of the value of each Asset Allocation Fund's average daily
net assets; .50% of the value of the Equity Income Fund's
average
daily net assets; .65% of the value of the Growth Fund's average
daily net assets; .70% of the value of the Special Opportunities
Fund's average daily net assets; .80% of the value of the
International Equity Fund's average daily net assets; .55% of
the value of the Bond Fund's average daily net assets; .70% of
the value of the International Bond Fund's average daily net
assets; .40% of the value of each of the Intermediate Bond,
Intermediate Municipal Bond and Municipal Bond Fund's average
daily net assets; and .40% of the value of each Money Market
Fund's average daily net assets. Under the Sub-Investment
Advisory Agreement between FCIMCO and ANB-IMC, FCIMCO has agreed
to pay ANB-IMC a monthly fee at the annual rate of .40% of the
value of the International Equity Fund's average daily net
assets. The investment advisory fee payable by the International
Equity Fund is higher than that paid by most other funds.

FCIMCO serves as each Fund's administrator pursuant to an
Administration Agreement. Under the Administration Agreement,
FCIMCO generally assists in all aspects of the Funds'
operations,
other than providing investment advice, subject to the overall
authority of the Board in accordance with applicable state law.
Under the terms of the relevant Administration Agreement, FCIMCO
receives a monthly fee at the annual rate of .15% of the value
of each Fund's average daily net assets. FCIMCO has engaged
Concord Holding Corporation, a wholly-owned subsidiary of The
BISYS Group, Inc., located at 125 West 55th Street, New York,
New York 10019 (the "Sub-Administrator"), to assist it in
providing certain administrative services for the Funds pursuant
to a Master Sub-Administration Agreement between FCIMCO and the
Sub-Administrator. FCIMCO, from its own funds, will pay the Sub-
Administrator for the Sub-Administrator's services.

DISTRIBUTOR

Concord Financial Group, Inc., located at 125 West 55th Street,
New York, New York 10019, serves as principal underwriter and
distributor of each Fund's shares. The Distributor, a wholly-
owned subsidiary of the Sub-Administrator, was organized to
distribute shares of mutual funds to institutional and retail
investors. The Distributor distributes the shares of other
investment companies with over $21 billion in assets.

TRANSFER AND DIVIDEND DISBURSING
AGENT AND CUSTODIAN

Primary Funds Service Corp., 100 Financial Park, Franklin,
Massachusetts 02038, is the Funds' Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Transfer Agent is
jointly owned by a subsidiary of the Sub-Administrator and
Putnam Investments, Inc. The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Funds' Custodian.

EXPENSES

All expenses incurred in the operation of the Trust, Prairie
Intermediate Bond Fund and Prairie Municipal Bond Fund are borne
by such company, except to the extent specifically assumed by
FCIMCO. The expenses borne by the Trust, Prairie Intermediate
Bond Fund and Prairie Municipal Bond Fund, Inc. include:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance
premiums, industry association fees, outside auditing and legal
expenses, costs of maintaining each Fund's existence, costs of
independent pricing services, costs attributable to investor
services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses. In
addition, Class B shares are subject to an annual distribution
fee for advertising, marketing and distributing such shares and
Class A and Class B shares are subject to an annual service fee
for ongoing personal services relating to shareholder accounts
and services related to the maintenance of shareholder accounts.
See "Distribution Plans and Shareholder Services Plans."
Expenses
attributable to a particular Fund, in the case of the Trust's
series, or Class are charged against the assets of that Fund or
Class, respectively; other expenses of the Trust are allocated
among such Funds on the basis determined by the Board,
including, but not limited to, proportionately in relation to
the net assets of each such Fund.

The imposition of the advisory fee, as well as other
operating expenses, including the fees paid under any
Distribution Plan and Shareholder Services Plan, will have the
effect of reducing the yield to investors. From time to time,
FCIMCO may waive receipt of its fees and/or voluntarily assume
certain expenses of a Fund, which would have the effect of
lowering that Fund's overall expense ratio and increasing yield
to investors at the time such amounts are waived or assumed, as
the case may be. The Fund will not pay FCIMCO at a later time
for any amounts which may be waived, nor will the Fund reimburse
FCIMCO for any amounts which may be assumed.

Distribution Plans and
Shareholder Services Plans

Class B shares of each Fund are subject to an annual
distribution fee pursuant to a Distribution Plan. Class A and
Class B shares of each Fund are subject to an annual service fee
pursuant to a Shareholder Services Plan.

DISTRIBUTION PLANS

(Class B only) Under separate Distribution Plans, adopted
pursuant to Rule 12b-1 under the 1940 Act, each of the Trust,
Prairie Intermediate Bond Fund and Prairie Municipal Bond Fund
has agreed to pay the Distributor for advertising, marketing and
distributing shares of the relevant Fund at an aggregate annual
rate of .75% of the value of the average daily net assets of
Class B. The Distributor may pay one or more Service Agents in
respect of these services. FCIMCO, FNBC, ANB and their
affiliates
may act as Service Agents and receive fees under the relevant
Distribution Plan. The Distributor determines the amounts, if
any, to be paid to Service Agents under the Distribution Plan
and the basis on which such payments are made. The fees payable
under each Distribution Plan are payable without regard to
actual expenses incurred.

SHAREHOLDER SERVICES PLANS

(Class A and Class B) Under separate Shareholder Services Plans,
each of the Trust, Prairie Intermediate Bond Fund and Prairie
Municipal Bond Fund pays the Distributor for the provision of
certain services to the holders of these shares a fee at an
annual rate of .25% of the value of the average daily net assets
of Class A or Class B. The services provided may include
personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the
maintenance of shareholder accounts. Under each Shareholder
Services Plan, the Distributor may make payments to Service
Agents in respect of these services. FCIMCO, FNBC, ANB and their
affiliates may act as
Service Agents and receive fees under the Shareholder Services
Plan. The Distributor determines the amounts to be paid to
Service Agents. Each Service Agent is required to disclose to
its clients any compensation payable to it by the Funds pursuant
to the Shareholder Services Plan and any other compensation
payable by their clients in connection with the investment of
their assets in Fund shares.

Dividends, Distributions and Taxes

Managed Assets, Growth, Special Opportunities and International
Equity Funds-Declare and pay dividends from net investment
income quarterly.

Managed Assets Income and Equity Income Funds-Declare and pay
dividends from net investment income monthly, usually on the
last calendar day of the month.

Bond, Municipal Bond and Money Market Funds-Declare dividends
from net investment income on each day the New York Stock
Exchange is open for business, except on Martin Luther King, Jr.
Day, Columbus Day and Veterans Day. Dividends usually are paid
on the last calendar day of each month. Shares begin accruing
dividends on the next business day after the purchase order is
effective. The earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day.

Applicable to All Funds-Each Fund will make distributions from
net realized securities gains, if any, once a year, but may make
distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. Dividends are
automatically reinvested in additional Fund shares of the same
Class from which they were paid at net asset value, unless
payment in cash is requested.

Dividends paid by each Fund, other than a Municipal Fund,
derived from net investment income and dividends paid by a
Municipal Fund derived from taxable investments, together with
distributions from any net realized short-term securities gains,
will be taxable to U.S. investors as ordinary income whether or
not reinvested in additional Fund shares. Distributions from net
realized long-term securities gains, if any, will be taxable to
U.S. shareholders as long-term capital gains for Federal income
tax purposes, regardless of how long investors have held shares
and whether such distributions are received in cash or
reinvested
in additional shares.

Except for dividends from taxable investments, it is
anticipated that substantially all dividends paid by a Municipal
Fund will not be subject to Federal income tax. Dividends and
distributions paid by a Municipal Fund may be subject to the
alternative minimum tax and to certain state and local taxes.

Notice as to the tax status of an investor's dividends and
distributions will be mailed to such investor annually. Each
investor also will receive periodic summaries of such investor's
account which will include information as to dividends and
distributions from securities gains, if any, paid during the
year. Participants in a Retirement Plan should receive periodic
statements from the trustee, custodian or administrator of their
Plan.

Federal regulations generally require the Funds to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to
which gain or loss may be realized, paid to a shareholder if
such shareholder fails to certify either that the TIN furnished
in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a
Federal income tax return. A TIN is either the Social Security
number or employer identification number of the record owner of
the account.

Management of the Prairie Intermediate Bond Fund and
Prairie Municipal Bond Fund, Inc. believe that each such Fund
has qualified as a "regulated investment company" for the fiscal
year ended January 31, 1995 and February 28, 1995, respectively.
Each such Fund intends to continue to so qualify, if such
qualification is in the best interests of its shareholders. It
is expected that each other Fund will qualify as a "regulated
investment company" under the Code so long as such qualification
is in the best interests of its shareholders. Such qualification
relieves the Fund of any liability for Federal income tax to the
extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, each Fund is
subject to a non-deductible 4% excise tax, measured with respect
to certain undistributed amounts of taxable investment income
and capital gains.

Each investor should consult his or her tax adviser
regarding specific questions as to Federal, state or local
taxes.

Performance Information

Special Opportunities, Growth and International Equity Funds-For
purposes of advertising, performance of these Funds may be
calculated on the bases of average annual total return and/or
total return. Average annual total return is calculated pursuant
to a standardized formula which assumes that an investment in
such Fund was purchased with an initial payment of $1,000 and
that the investment was redeemed at the end of a stated period
of time, after giving effect to the reinvestment of dividends
and distributions during the period. The return is expressed as
a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of a Fund's performance
will include such Fund's average annual total return for one,
five and ten year periods, or for shorter time periods depending
upon the length of time during which the Fund has operated.
Computations of average annual total return for periods of less
than one year represent an annualization of the Fund's actual
total return for the applicable period.

Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the maximum offering price per share at
the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total
return also may be calculated by using the net asset value per
share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for
Class
A shares or without giving effect to any applicable CDSC at the
end of the period for Class B shares. Calculations based on the
net asset value per share do not reflect the deduction of the
applicable sales charge which, if reflected, would reduce the
performance quoted.

Asset Allocation, Equity Income, Bond and Municipal Bond Funds
- -For purposes of advertising, performance of these Funds may be
calculated on several bases, including current yield, average
annual total return and/or total return. Current yield refers to
the Fund's annualized net investment income per share over a 30-
day period, expressed as a percentage of the net asset value per
share at the end of the period. For purposes of calculating
current yield, the amount of net investment income per share
during that 30-day period, computed in accordance with
regulatory
requirements, is compounded by assuming that it is reinvested at
a constant rate over a six-month period. An identical result is
then assumed to have occurred during a second six-month period
which, when added to the result for the first six months,
provides an "annualized" yield for an entire one-year period.

The Municipal Bond Funds may advertise tax equivalent
yield, which is calculated by determining the pre-tax yield
which, after being taxed at a certain rate, would be equivalent
to a stated current yield calculated as described above.

Average annual total return and total return will be
calculated as described above.

Money Market Funds-From time to time, each Money Market Fund may
advertise its yield and effective yield. Both yield figures are
based on historical earnings and are not intended to indicate
future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the
income generated by an investment in the Fund over a seven-day
period (which period will be stated in the advertisement). This
income is then annualized. That is, the amount of income
generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated
similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The
effective
yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.

The Municipal Money Market Fund also may advertise tax
equivalent yield, which would be calculated as described above.

Applicable to All Funds-Performance will vary from time to time
and past results are not necessarily representative of future
results. Investors should remember that performance is a
function
of the type and quality of portfolio securities held by the Fund
and is affected by operating expenses. Yield and performance
information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Performance for each Class will be calculated separately.

Comparative performance information may be used from time
to time in advertising or marketing a Fund's shares, including
data from Lipper Analytical Services, Inc., Bank Rate Monitor,
N. Palm Beach, Fla. 33408, Bond 20-Bond Index, Moody's Bond
Survey Bond Index, Lehman Corporate Bond Index, IBC/Donoghue's
Money Fund Report, S&P 500 Index, Lehman Brothers
Government/Corporate Bond
Index, the Dow Jones Industrial Average, CDA/Wiesenberger
Investment Companies Service, Mutual Fund Values; Mutual Fund
Forecaster, Schabacker Investment Management, Inc., Morningstar,
Inc. and other industry publications.

General Information

The Trust and Prairie Intermediate Bond Fund are organized as
unincorporated business trusts under the laws of the
Commonwealth
of Massachusetts and Prairie Municipal Bond Fund, Inc. is
incorporated under Maryland law. The Trust, Prairie Intermediate
Bond Fund and Prairie Municipal Bond Fund commenced operations
on January 17, 1995, March 5, 1993 and March 1, 1988,
respectively. The Trust and Prairie Intermediate Bond Fund are
authorized to issue an unlimited number of shares of beneficial
interest and Prairie Municipal Bond Fund, Inc. is authorized to
issue 10 billion shares of common stock, each with a par value
of $.001 per share. Shares of each Fund are classified into
three classes. Each share has one vote and shareholders will
vote in the aggregate and not by class except as otherwise
required by law or with respect to any matter which affects only
one class.

Prior to January 17, 1995, Prairie Intermediate Bond Fund's
name was First Prairie U.S. Government Income Fund and it was
required to invest at least 65% of its assets in U.S. Government
securities and was a diversified investment company. Any
reference herein and in the Statement of Additional Information
to the Prairie Intermediate Bond Fund, including any financial
information and performance data, relating to such periods
reflect the Fund's portfolio as constituted prior to such
revisions.

Prior to January 17, 1995, Prairie Municipal Bond Fund,
Inc."s name was First Prairie Tax Exempt Bond Fund, Inc. and,
since September 12, 1989, its shares were offered as the Insured
Series and it invested at least 65% of the value of its total
assets in Municipal Obligations insured as to timely payment of
principal and interest by recognized insurers of Municipal
Obligations. Prior to September 12, 1989, the Fund was not
required to invest such portion of its assets in insured
Municipal Obligations and, under normal market conditions, the
dollar-weighted average maturity of its portfolio exceeded ten
years and it invested in Municipal Obligations rated A or better
by Moody's or S&P. Any reference herein and in the Statement of
Additional Information to the Prairie Municipal Bond Fund, Inc.,
including any financial information and performance data,
relating to such periods reflect the Fund's portfolio as
constituted prior to such revisions.

To date, the Trust's Board has authorized the creation of
12 separate portfolios of shares for the Trust. All
consideration
received by the Trust for shares of one of the portfolios and
all assets in which such consideration is invested will belong
to that portfolio (subject only to the rights of creditors of
the Trust) and will be subject to the liabilities related
thereto. The income attributable to, and the expenses of, one
portfolio (and as to classes within a portfolio) are treated
separately from those of the other portfolios (and classes). The
Trust has the ability to create, from time to time, new
portfolios without shareholder approval which may be sold
pursuant to other offering documents.

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
a Massachusetts business trust. However, the Trust Agreement for
each of Prairie Intermediate Bond Fund and the Trust disclaims
shareholder liability for acts or obligations of such entities
and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by
such entities or a Trustee. Each Trust Agreement provides for
indemnification from the Fund's property for all losses and
expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be
unable
to meet its obligations, a possibility which management believes
is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Trustees
intend to conduct the operations of the Trust and Prairie
Intermediate Bond Fund in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities
of the Trust or Prairie Intermediate Bond Fund, as the case may
be.

The Funds ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances have the right
to call a meeting of shareholders for the purpose of voting to
remove Board members.

Although each Fund is offering only its own shares, it is
possible that a Fund might become liable for any misstatement in
this Prospectus about another Fund. The Funds' Board has
considered this factor in approving the use of this single
combined Prospectus.

The Transfer Agent maintains a record of each investor's
ownership and sends confirmations and statements of account.

Investor inquiries may be made by writing to the address
shown on page one or by calling the appropriate telephone
number.

No person has been authorized to give any information or to
make any representations other than those contained in this
Prospectus and in the Trust's official sales literature in
connection with the offer of the Funds' shares, and, if given or
made, such other information or representations must not be
relied upon as having been authorized. This Prospectus does not
constitute an offer in any State in which, or to any person to
whom, such offering may not lawfully be made.
<PAGE>

Appendix

CERTAIN PORTFOLIO SECURITIES

Equity Securities

American, European and Continental Depositary Receipts-(Asset
Allocation, Equity Income, Growth, International and Special
Opportunities Funds only) Securities of foreign issuers may be
sold in the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may not
necessarily be denominated in the same currency as the
securities
into which they may be converted. ADRs are receipts typically
issued by a United States bank or trust company which evidence
ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as
Continental
Depositary Receipts ("CDRs"), are receipts issued in Europe
typically by non-United States banks and trust companies that
evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the
United States securities markets and EDRs and CDRs in bearer
form are designed for use in Europe.

Warrants-(Asset Allocation and Equity Funds only) A warrant is
an instrument issued by a corporation which gives the holder the
right to subscribe to a specified amount of the corporation's
capital stock at a set price for a specified period of time.
Each of these Funds may invest up to 5% of its net assets in
warrants, valued at the lesser of cost or market, except that
this limitation does not apply to warrants acquired in units or
attached to securities. Included in such amount, but not to
exceed 2% of the value of the Fund's net assets, may be warrants
which are not listed on the New York or American Stock Exchange.

Fixed-Income Securities

Convertible Securities-(Asset Allocation, Equity and Bond Funds
only) Convertible securities are fixed-income securities that
may be converted at either a stated price or stated rate into
underlying shares of common stock. Convertible securities have
general characteristics similar to both fixed-income and equity
securities. Although to a lesser extent than with fixed-income
securities generally, the market value of convertible securities
tends to decline as interest rates increase and, conversely,
tends to increase as interest rates decline. In addition,
because
of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value
of the underlying common stock, and, therefore, also will react
to variations in the general market for equity securities. A
unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible
securities tend to trade increasingly on a yield basis, and so
may not experience market value declines to the same extent as
the underlying common stock. When the market price of the
underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the
underlying common stock.
While no securities investments are without risk, investments in
convertible securities generally entail less risk than
investments in common stock of the same issuer.

As fixed-income securities, convertible securities are
investments that provide for a stable stream of income with
generally higher yields than common stocks. Of course, like all
fixed-income securities, there can be no assurance of current
income because the issuers of the convertible securities may
default on their obligations. Convertible securities, however,
generally offer lower interest or dividend yields than non-
convertible securities of similar quality because of the
potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for
capital appreciation through the conversion feature, which
enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices
fluctuate.

Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar
non-convertible securities.

U.S. Government Securities-These securities are described under
"Taxable Money Market Instruments-U.S. Government Securities"
below and may be purchased without regard to maturity.

Zero Coupon and Stripped Securities-(Asset Allocation, Equity,
Bond and Municipal Bond Funds only) Zero coupon U.S. Treasury
securities are Treasury Notes and Bonds that have been stripped
of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped
debt obligations and coupons. Zero coupon securities also are
issued by corporations and financial institutions which
constitute a proportionate ownership of the issuer's pool of
underlying U.S. Treasury securities. A zero coupon security pays
no interest to its holder during its life and is sold at a
discount to its face value at maturity. The amount of the
discount fluctuates with the market price of the security. The
market prices of zero coupon securities generally are more
volatile than the market prices of securities that pay interest
periodically and are likely to respond to a greater degree to
changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities.

Participation Interests-(Asset Allocation, Equity, Bond and
Money Market Funds only) A participation interest gives the
purchaser an undivided interest in a security in the proportion
that such purchaser's participation interest bears to the total
principal amount of the security. These instruments may have
fixed, floating or variable rates of interest, with, in the case
of the Money Market Fund, remaining maturities of 13 months or
less. If the participation interest is unrated, or has been
given a rating below that which is permissible for purchase by a
Fund, the participation interest will be backed by an
irrevocable letter of credit or guarantee of a bank, or the
payment obligation otherwise will be collateralized by U.S.
Government securities, or, in the case of unrated participation
interests, the Investment Adviser must have determined that the
instrument is of comparable quality to those instruments in
which such Fund may invest.

Mortgage-Related Securities-(Asset Allocation, Equity and Bond
Funds only) Mortgage-related securities are securities
collateralized by pools of mortgage loans assembled for sale to
investors by various governmental agencies, such as the
Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation, as well as by
private issuers such as commercial banks, savings and loan
institutions, mortgage banks and private mortgage insurance
companies, and similar foreign entities. Mortgage-related
securities are a form of derivative security. The mortgage-
related securities which may be purchased include those with
fixed, floating and variable interest rates, those with interest
rates that change based on multiples of changes in interest
rates and those with interest rates that change inversely to
changes in interest rates, as well as stripped mortgage-backed
securities. Stripped mortgage-backed securities usually are
structured with two classes that receive different proportions
of interest and
principal distributions on a pool of mortgage-backed securities
or whole loans. A common type of stripped mortgage-backed
security will have one class receiving some of the interest and
most of the principal from the mortgage collateral, while the
other class will receive most of the interest and the remainder
of the principal. In the most extreme case, one class will
receive all of the interest (the interest-only or "IO" class),
while the other class will receive all of the principal (the
principal-only or "PO" class). Although certain mortgage-related
securities are guaranteed by a third party or otherwise
similarly
secured, the market value of the security, which may fluctuate,
is not so secured. If a mortgage-related security is purchased
at a premium, all or part of the premium may be lost if there is
a decline in the market value of the security, whether resulting
from changes in interest rates or prepayments in the underlying
mortgage collateral. As with other interest-bearing securities,
the prices of certain of these securities are inversely affected
by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise,
the converse is not necessarily true, since in periods of
declining interest rates the mortgages underlying the security
are more likely to prepay. For this and other reasons, a
mortgage-related security's stated maturity may be shortened by
unscheduled prepayments on the underlying mortgages, and,
therefore, it is not possible to predict accurately the
security's return to a Fund. Moreover, with respect to stripped
mortgage-backed securities, if the underlying mortgage
securities
experience greater than anticipated prepayments of principal,
the Fund may fail to fully recoup its initial investment in
these securities even if the securities are rated in the highest
rating category by a nationally recognized statistical rating
organization. In addition, regular payments received in respect
of mortgage-related securities include both interest and
principal. No assurance can be given as to the return the Fund
will receive when these amounts are reinvested. For further
discussion concerning the investment considerations involved,
see "Description of the Funds-Risk Factors-Fixed-Income
Securities" and "Illiquid Securities" below and "Investment
Objectives and Management Policies-Portfolio
Securities-Mortgage-Related Securities" in the Statement of
Additional Information.

Asset-Backed Securities-(Asset Allocation, Equity and Bond Funds
only) The securitization techniques used for asset-backed
securities are similar to those used for mortgage-related
securities. Asset-backed securities are a form of derivative
security. These securities include debt securities and
securities
with debt-like characteristics. The collateral for these
securities has included home equity loans, automobile and credit
card receivables, boat loans, computer leases, airplane leases,
mobile home loans, recreational vehicle loans and hospital
account receivables. These Funds may invest in these and other
types of asset-backed securities that may be developed in the
future.

Asset-backed securities present certain risks that are not
presented by mortgage-backed securities. Primarily, these
securities do not have the benefit of the same security interest
in the related collateral. Credit card receivables generally are
unsecured and the debtors are entitled to the protection of a
number of state and Federal consumer credit laws, many of which
give such debtors the right to set off certain amounts owed on
the credit cards, thereby reducing the balance due. Most issuers
of asset-backed securities backed by automobile receivables
permit the servicers of such receivables to retain possession of
the underlying obligations. If the servicer were to sell these
obligations to another party, there is a risk that the purchaser
would acquire an interest superior to that of the holders of the
related asset-backed securities. In addition, because of the
large number of vehicles involved in a typical issuance and
technical requirements under state laws, the trustee for the
holders of asset-backed securities backed by automobile
receivables may not have a proper security interest in all of
the obligations backing such receivables. Therefore, there is
the possibility that recoveries on repossessed collateral may
not, in some cases, be available to support payments on these
securities.

Municipal Obligations-(Asset Allocation, Equity, Bond and
Municipal Funds only) Municipal Obligations generally include
debt obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. While in general,
Municipal Obligations are tax exempt securities having
relatively
low yields as compared to taxable, non-municipal obligations of
similar quality, certain issues of Municipal Obligations, both
taxable and non-taxable, offer yields comparable and in some
cases greater than the yields available on other permissible
investments. Dividends received by shareholders of a Fund, other
than a Municipal Fund, which are attributable to interest income
received by it from Municipal Obligations generally will be
subject to Federal income tax. Municipal Obligations bear fixed,
floating or variable rates of interest, which are determined in
some instances by formulas under which the Municipal
Obligation's
interest rate will change directly or inversely to changes in
interest rates or an index, or multiples thereof, in many cases
subject to a maximum and minimum.

Closed-End Investment Companies-(Asset Allocation, Growth,
International Equity, Special Opportunities and International
Bond Funds only). Each of these Funds may invest in securities
issued by closed-end investment companies which principally
invest in securities in which the Fund invests. Under the 1940
Act, the Fund's investment in such securities, subject to
certain
exceptions, currently is limited to (i) 3% of the total voting
stock of any one investment company, (ii) 5% of the Fund's net
assets with respect to any one investment company and (iii) 10%
of the Fund's net assets in the aggregate. Such purchases will
be made in the open market where no commission or profit to a
sponsor or dealer results from the purchase other than the
customary brokers' commissions. Investments in the securities of
other investment companies may involve duplication of advisory
fees and certain other expenses. Municipal Obligations the
interest rates for which are determined by such formulas are a
form of derivative security. Each of these Funds, other than the
Municipal Funds, currently intends to invest no more than 25% of
its respective assets in Municipal Obligations. However, this
percentage may be varied from time to time without shareholder
approval.

Unregistered Notes-(Asset Allocation, Equity, Bond and Money
Market Funds only) Each of these Funds may purchase unsecured
promissory notes ("Notes") which are not readily marketable and
have not been registered under the Securities Act of 1933, as
amended, provided such investments are consistent with such
Fund's goal.

Foreign Government Obligations; Securities of Supranational
Entities-(Asset Allocation, International Equity, Growth,
Special
Opportunities, Bond and Money Market Funds only) Each of these
Funds may invest in obligations issued or guaranteed by one or
more foreign governments or any of their political subdivisions,
agencies or instrumentalities that are determined by the
Investment Adviser to be of comparable quality to the other
obligations in which such Fund may invest. Such securities also
include debt obligations of supranational entities.
Supranational
entities include international organizations designated or
supported by governmental entities to promote economic
reconstruction or development and international banking
institutions and related government agencies. Examples include
the International Bank for Reconstruction and Development (the
World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank. The
percentage of a Fund's assets invested in securities issued by
foreign governments will vary depending on the relative yields
of such securities, the economic and financial markets of the
countries in which the investments are made and the interest
rate climate of such countries.

Ratings-The ratings of Moody's, S&P, Fitch and Duff represent
their opinions as to the quality of the obligations which they
undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and, although ratings may be
useful in evaluating the safety of interest and principal
payments, they
do not evaluate the market value risk of such obligations.
Therefore, although these ratings may be an initial criterion
for selection of portfolio investments, the Investment Adviser
also will evaluate such obligations and the ability of their
issuers to pay interest and principal. Each Fund will rely on
the Investment Adviser's judgment, analysis and experience in
evaluating the creditworthiness of an issuer. In this
evalaution, the Investment Adviser will take into consideration,
among other things, the issuer's financial resources, its
sensitivity to economic conditions and trends, the quality of
the issuer's management and regulatory matters. It also is
possible that a rating agency might not timely change the rating
on a particular issue to reflect subsequent events. Once the
rating of a security held by a Fund has been changed, the
Investment Adviser will consider all circumstances deemed
relevant in determining whether
such Fund should continue to hold the security.

Taxable Money Market Instruments

Each Fund may invest, in the circumstances described under
"Description of the Funds-Management Policies," in the following
types of Money Market Instruments, each of which at the time of
purchase must have or be deemed to have under the rules of the
Securities and Exchange Commission remaining maturities of 13
months or less.

U.S. Government Securities-Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities include
U.S. Treasury securities that differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally
have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of
the Federal Home Loan Banks, by the right of the issuer to
borrow from the U.S. Treasury; others, such as those issued by
the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear
fixed, floating or variable rates of interest. Principal and
interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government
provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it
will always do so, because it is not so obligated by law.

Bank Obligations-(each Fund, except U.S. Government Money Market
Fund) Bank obligations include certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations
of domestic banks, foreign subsidiaries of domestic banks,
foreign branches of domestic banks, and domestic and foreign
branches of foreign banks, domestic savings and loan
associations
and other banking institutions. With respect to such securities
issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign
branches
of foreign banks, a Fund may be subject to additional investment
risks that are different in some respects from those incurred by
a fund which invests only in debt obligations of U.S. domestic
issuers. Such risks include possible future political and
economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.

Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited
with it for a specified period of time.

Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time at a stated
interest rate. Time deposits which may be held by each Fund will
not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the FDIC.

Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of
the drawer to pay the face amount of the instrument upon
maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or
variable interest rates.

Repurchase Agreements-Repurchase agreements involve the
acquisition by a Fund of an underlying debt instrument, subject
to an obligation of the seller to repurchase, and such Fund to
resell, the instrument at a fixed price usually not more than
one week after its purchase. Certain costs may be incurred by a
Fund in connection with the sale of the securities if the seller
does not repurchase them in accordance with the repurchase
agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the
securities by a Fund may be delayed or limited. Pursuant to an
order obtained from the Securities and Exchange Commission, each
Fund also is permitted to enter into overnight repurchase
agreements with FNBC or an affiliate of FNBC subject to the
terms and conditions of such order.

Certain Corporate Obligations-(each Fund, except U.S. Government
Money Market Fund) Commercial paper consists of short-term,
unsecured promissory notes issued by domestic or foreign
entities
to finance short-term credit needs. Floating and variable rate
demand notes and bonds are obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to
demand payment of principal at any time or at specified
intervals. Variable rate demand notes include variable amount
master demand notes, which are obligations that permit a Fund to
invest fluctuating amounts at varying rates of interest pursuant
to direct arrangements between the Fund, as lender, and the
borrower. These notes permit daily changes in the amounts
borrowed. As mutually agreed between the parties, the Fund may
increase the amount under the notes at any time up to the full
amount provided by the note agreement, or decrease the amount,
and the borrower may repay up to the full amount of the note
without penalty. Because these obligations are direct lending
arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus
accrued interest, at any time. Accordingly, where these
obligations are not secured by letters of credit or other credit
support arrangements, a Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on
demand.

Tax Exempt Money Market Instruments

Tax Exempt Participation Interests-(Municipal Funds only) A
participation interest in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase
agreements) gives the purchaser an undivided interest in the
Municipal Obligation in the proportion that such purchaser's
participation interest bears to the total principal amount of
the Municipal Obligation. These instruments may have fixed,
floating or variable rates of interest, with remaining
maturities of 13 months or less. If the participation interest
is unrated, or has been given a rating below that which
otherwise is permissible for purchase by a Fund, the
participation interest will be backed by
an irrevocable letter of credit or guarantee of a bank that the
Board has determined meets the prescribed quality standards for
banks set forth above, or the payment obligation otherwise will
be collateralized by U.S. Government securities. For certain
participation interests, a Fund will have the right to demand
payment, on not more than seven days' notice, for all or any
part of such Fund's participation interest in the Municipal
Obligation, plus accrued interest. As to these instruments, each
Fund intends to exercise its right to demand payment only upon a
default under the terms of the Municipal Obligation, as needed
to provide liquidity to meet redemptions, or to maintain or
improve the quality of its investment portfolio. No Fund will
invest more than 15% (10% in the case of the Municipal Money
Market Fund) of the value of its net assets in participation
interests that do not have this demand feature, and in other
illiquid securities.

Tender Option Bonds-(Municipal Funds only) A tender option bond
is a Municipal Obligation (generally held pursuant to a
custodial
arrangement) having a relatively long maturity and bearing
interest at a fixed rate substantially higher than prevailing
short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or
other financial institution, pursuant to which such institution
grants the security holders the option, at periodic intervals,
to tender their securities to the institution and receive the
face value thereof. As consideration for providing the option,
the financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate
and the rate, as determined by a remarketing or similar agent at
or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on
the date of such determination. Thus, after payment of this fee,
the security holder effectively holds a demand obligation that
bears interest at the prevailing short-term tax exempt rate. The
Investment Adviser, on behalf of a Fund, will consider on an
ongoing basis the creditworthiness of the issuer of the
underlying Municipal Obligation, of any custodian and of the
third party provider of the tender option. In certain instances
and for certain tender option bonds, the option may be
terminable
in the event of a default in payment of principal or interest on
the underlying Municipal Obligations and for other reasons. No
Fund will invest more than 15% (10% in the case of the Money
Market Funds) of the value of its net assets in securities that
are illiquid, which would include tender option bonds as to
which it cannot exercise the tender feature on not more than
seven days' notice if there is no secondary market available for
these obligations.

Stand-By Commitments-(Municipal Funds only) Each Municipal Fund
may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at
the
Fund's option, specified securities at a specified price and, in
this respect, stand-by commitments are comparable to put
options. The exercise of a stand-by commitment therefore is
subject to the ability of the seller to make payment on demand.
Each Municipal Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise
its rights thereunder for trading purposes. Each Municipal Fund
may pay for stand-by commitments if such action is deemed
necessary, thus increasing to a degree the cost of the
underlying Municipal Obligation and similarly decreasing such
security's yield to investors.

Illiquid Securities

Each Fund may invest up to 15% (10% in the case of the Money
Market Funds) of the value of its net assets in securities as to
which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements
providing for settlement in more than seven days after notice,
and certain options traded in the over-the-counter market and
securities used to cover such options. As to these securities, a
Fund is subject to a risk that should such Fund desire to sell
them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of such Fund's
net assets could be adversely affected.

INVESTMENT TECHNIQUES

Leverage Through Borrowing-(Asset Allocation, Equity, Bond and,
to a limited extent, Money Market Funds only) Borrowing for
investment purposes is known as leveraging and generally will be
unsecured, except to the extent a Fund enters into reverse
repurchase agreements described below. The Money Market Fund may
borrow for investment purposes only through entering into
reverse
repurchase agreements. Leveraging will exaggerate the effect on
net asset value of any increase or decrease in the market value
of the Fund's portfolio. Money borrowed for leveraging will be
subject to interest costs that may or may not be recovered by
appreciation of the securities purchased; in certain cases,
interest costs may exceed the return received on the securities
purchased.

Among the forms of borrowing in which a Fund may engage is
the entry into reverse repurchase agreements with banks, brokers
or dealers. These transactions involve the transfer by the Fund
of an underlying debt instrument in return for cash proceeds
based on a percentage of the value of the security. The Fund
retains the right to receive interest and principal payments on
the security. At an agreed upon future date, the Fund
repurchases
the security at principal, plus accrued interest. In certain
types of agreements, there is no agreed upon repurchase date and
interest payments are calculated daily, often based on the
prevailing overnight repurchase rate.

Short-Selling-(Asset Allocation, Equity and Bond Funds only)
Each
of these Funds may make short sales, which are transactions in
which the Fund sells a security it does not own in anticipation
of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then is obligated to replace the
security borrowed by purchasing it at the market price at the
time of replacement. The price at such time may be more or less
than the price at which the security was sold by the Fund. The
Fund will incur a loss as a result of the short sale if the
price of the security increases between the date of the short
sale and
the date on which the Fund replaces the borrowed security. The
Fund will realize a gain if the security declines in price
between those dates.

Each Fund may purchase call options to provide a hedge
against an increase in the price of a security sold short by
such Fund. When a Fund purchases a call option it has to pay a
premium to the person writing the option and a commission to the
broker selling the option. If the option is exercised by the
Fund, the premium and the commission paid may be more than the
amount of the brokerage commission charged if the security were
to be purchased directly. See "Options Transactions" below.

It is expected that the frequency of short sales on behalf
of each Fund will vary substantially under different market
conditions, and it is not intended that any specified portion of
a Fund's assets, as a matter of practice, will be invested in
short sales. However, no securities will be sold short if, after
effect is given to any such short sale, the total market value
of all securities sold short would exceed 25% of the value of
the Fund's net assets. A Fund will not sell short the securities
of any single issuer listed on a national securities exchange to
the extent of more than 2% of the value of such Fund's net
assets and will not sell short the securities of any class of an
issuer to the extent, at the time of transaction, of more than
2% of the outstanding securities of that class.

In addition to the short sales discussed above, each Fund
may make short sales "against the box," a transaction in which a
Fund enters into a short sale of a security which such Fund
owns. The proceeds of the short sale will be held by a broker
until the settlement date at which time the Fund delivers the
security to close the short position. The Fund receives the net
proceeds from the short sale. At no time will a Fund have more
than 15% of the value of its net assets in deposits on short
sales against the box.

Options Transactions-(Asset Allocation, Equity and Bond Funds
only) Each of these Funds is permitted to invest up to 5% of its
assets, represented by the premium paid, in the purchase of call
and put options. Options transactions are a form of derivative
security.

Each of these Funds is permitted to purchase call and put
options in respect of specific securities (or groups or
"baskets"
of specific securities) in which the Fund may invest. Each Fund
may write and sell covered call option contracts on securities
owned by the Fund not exceeding 20% of the market value of its
net assets at the time such option contracts are written. Each
Fund also may purchase call options to enter into closing
purchase transactions. Each Fund also may write covered put
option contracts to the extent of 20% of the value of its net
assets at the time such option contracts are written. A call
option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security at the
exercise price at any time during the option period. Conversely,
a put option gives the purchaser of the option the right to
sell,
and obligates the writer to buy, the underlying security at the
exercise price at any time during the option period. A covered
put option sold by a Fund exposes the Fund during the term of
the
option to a decline in price of the underlying security or
securities. A put option sold by a Fund is covered when, among
other things, cash or liquid securities are placed in a
segregated account with the Trust's custodian to fulfill the
obligation undertaken.

Each of these Funds also may purchase and sell call and put
options on foreign currency for the purpose of hedging against
changes in future currency exchange rates. Call options convey
the right to buy the underlying currency at a price which is
expected to be lower than the spot price of the currency at the
time the option expires. Put options convey the right to sell
the underlying currency at a price which is anticipated to be
higher than the spot price of the currency at the time the
option expires.

Each of these Funds also may purchase cash-settled options
on interest rate swaps, interest rate swaps denominated in
foreign currency and equity index swaps. See "-Interest Rate and
Equity Index Swaps" below. A cash-settled option on a swap gives
the purchaser the right, but not the obligation, in return for
the premium paid, to receive an amount of cash equal to the
value of the underlying swap as of the exercise date. These
options typically are purchased in privately negotiated
transactions from financial institutions, including securities
brokerage firms.

Each of these Funds may purchase and sell call and put
options on stock indexes listed on U.S. securities exchanges or
traded in the over-the-counter market. A stock index fluctuates
with changes in the market values of the stocks included in the
index. Because the value of an index option depends upon
movements in the level of the index rather than the price of a
particular stock, whether a Fund will realize a gain or loss
from
the purchase or writing of options on an index depends upon
movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or
market segment, rather than movements in the price of a
particular stock.

Successful use by a Fund of options will be subject to the
Investment Adviser's ability to predict correctly movements in
the direction of individual stocks, the stock market generally,
foreign currencies or interest rates. To the extent the
Investment Adviser's predictions are incorrect, the Fund may
incur losses which could adversely affect the value of a
shareholder's investment.

Futures Contracts and Options on Futures Contracts- (Asset
Allocation, Equity, Bond and Municipal Bond Funds only) Each of
these Funds may enter into stock index futures contracts,
interest rate futures contracts and currency futures contracts,
and options with respect thereto. See "-Options Transactions"
above. These transactions will be entered into as a substitute
for comparable market positions in the underlying securities or
for hedging purposes. Although none of these Funds would be a
commodity pool, each would be subject to rules of the CFTC
limiting the extent to which it could engage in these
transactions. Futures and options transactions are a form of
derivative security.

Each of these Funds' commodities transactions must
constitute bona fide hedging or other permissible transactions
pursuant to regulations promulgated by the CFTC. In addition, a
Fund may not engage in such transactions if the sum of the
amount
of initial margin deposits and premiums paid for unexpired
commodity options, other than for bona fide hedging
transactions,
would exceed 5% of the liquidation value of the Fund's assets,
after taking into account unrealized profits and unrealized
losses on such contracts it has entered into; provided, however,
that in the case of an option that is in-the-money at the time
of purchase, the in-the-money amount may be excluded in
calculating the 5%. To the extent a Fund engages in the use of
futures and options on futures for other than bona fide hedging
purposes, the Fund may be subject to additional risk.

Engaging in these transactions involves risk of loss to a
Fund which could adversely affect the value of a shareholder's
investment. Although each of these Funds intends to purchase or
sell futures contracts only if there is an active market for
such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified
periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of
futures positions and potentially subjecting the Fund to
substantial losses. In addition, engaging in futures
transactions
in foreign markets may involve greater risks than trading in
domestic exchanges.

Successful use of futures by a Fund also is subject to the
Investment Adviser's ability to predict correctly movements in
the direction of the market, interest rates or foreign
currencies
and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures
contract. For example, if a Fund has hedged against the
possibility of a decline in the market adversely affecting the
value of securities held in its portfolio and prices increase
instead, the Fund will lose part or all of the benefit of the
increased value of securities which it has hedged because it
will have offsetting losses in its futures positions. In
addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin
requirements.
Such sales of securities may, but will not necessarily, be at
increased prices which reflect the rising market. A Fund may
have to sell securities at a time when it may be disadvantageous
to do so.

Pursuant to regulations and/or published positions of the
Securities and Exchange Commission, each of these Funds may be
required to segregate cash or high quality money market
instruments in connection with its commodities transactions in
an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect
of limiting the Fund's ability otherwise to invest those assets.

Interest Rate and Equity Index Swaps-(Asset Allocation, Equity
and Bond Funds only) Each of these Funds may enter into interest
rate swaps and equity index swaps, to the extent described under
"Description of the Funds-Management Policies," in pursuit of
their respective investment objectives. Interest rate swaps
involve the exchange by a Fund with another party of their
respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments).
Equity index swaps involve the exchange by a Fund with another
party of cash flows based upon the performance of an index or a
portion of an index which usually includes dividends. In each
case, the exchange commitments can involve payments to be made
in the same currency or in different currencies. Swaps are a
form of derivative security.

Each of these Funds usually will enter into swaps on a net
basis. In so doing, the two payment streams are netted out, with
the Fund receiving or paying, as the case may be, only the net
amount of the two payments. If a Fund enters into a swap, it
would maintain a segregated account in the full amount accrued
on a daily basis of the Fund's obligations with respect to the
swap. Each of these Funds will enter into swap transactions with
counterparties only if: (i) for transactions with maturities
under one year, such counterparty has outstanding short-term
paper rated at least A-1 by S&P, Prime-1 by Moody's, F-1 by
Fitch or Duff-1 by Duff, or (ii) for transactions with
maturities
greater than one year, the counterparty has outstanding debt
securities rated at least Aa by Moody's or AA by S&P, Fitch or
Duff. If there is a default by the other party to such a
transaction, the Fund will have contractual remedies pursuant to
the agreements related to the transaction.

The use of swaps is a highly specialized activity which
involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. There
is no limit on the amount of swap transactions that may be
entered into by a Fund. These transactions do not involve the
delivery of securities or other underlying assets or principal.
Accordingly, the risk of loss with respect to swaps is limited
to the net amount of payments that a Fund is contractually
obligated to make. If the other party to a swap defaults, the
relevant Fund's risk of loss consists of the net amount of
payments that such Fund contractually is entitled to receive.

Foreign Currency Transactions-(Asset Allocation, Growth,
International Equity, Special Opportunities and International
Bond Funds only) Each of these Funds may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the
rate prevailing in the currency exchange market, or through
entering into forward contracts to purchase or sell currencies.
A forward currency exchange contract involves an obligation to
purchase or sell a specific currency at a future date, which
must be more than two days from the date of the contract, at a
price set at the time of the contract. These contracts are
entered into in the interbank market conducted directly between
currency traders (typically commercial banks or other financial
institutions) and their customers.

Each of these Funds also may combine forward currency
exchange contracts with investments in securities denominated in
other currencies.

Each of these Funds also may maintain short positions in
forward currency exchange transactions, which would involve it
agreeing to exchange an amount of a currency it did not
currently
own for another currency at a future date in anticipation of a
decline in the value of the currency sold relative to the
currency such Fund contracted to receive in the exchange.

Future Developments-(Asset Allocation, Equity, Bond and
Municipal
Bond Funds only) Each of these Funds may take advantage of
opportunities in the area of options and futures contracts,
options on futures contracts and any other derivative
investments
which are not presently contemplated for use by a Fund or which
are not currently available but which may be developed, to the
extent such opportunities are both consistent with a Fund's
investment objective and legally permissible for such Fund.
Before entering into such transactions or making any such
investment, the Fund will provide appropriate disclosure in its
prospectus.

Lending Portfolio Securities-From time to time, each Fund may
lend securities from its portfolio to brokers, dealers and other
financial institutions needing to borrow securities to complete
certain transactions. Such loans may not exceed 33-1/3% of the
value of a Fund's total assets. In connection with such loans, a
Fund will receive collateral consisting of cash, U.S. Government
securities or, except in the case of the U.S. Government Money
Market Fund, irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of
the current market value of the loaned securities. Each Fund can
increase its income through the investment of such collateral. A
Fund continues to be entitled to payments in amounts equal to
the interest, dividends and other distributions payable on the
loaned security and receives interest on the amount of the loan.
Such loans will be terminable at any time upon specified notice.
A Fund might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches
its agreement with such Fund.

Forward Commitments-Each Fund may purchase securities on a when-
issued or forward commitment basis, which means that the price
is fixed at the time of commitment, but delivery and payment
ordinarily take place a number of days after the date of the
commitment to purchase. A Fund will make commitments to purchase
such securities only with the intention of actually acquiring
the securities, but the Fund may sell these securities before
the settlement date if it is deemed advisable. The Fund will not
accrue income in respect of a security purchased on a forward
commitment basis prior to its stated delivery date.

Securities purchased on a when-issued or forward commitment
basis and certain other securities held in a Fund's portfolio
are
subject to changes in value (both generally changing in the same
way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest rates. Securities
purchased on a when-issued or forward commitment basis may
expose
a Fund to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-
issued or forward commitment basis can involve the additional
risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the
transaction itself. A segregated account of each Fund consisting
of cash or U.S. Government securities or other high quality
liquid debt securities of the type in which the Fund invests at
least equal at all times to the amount of the when-issued or
forward commitments will be established and maintained at the
Fund's custodian bank. Purchasing securities on a forward
commitment basis when a Fund is fully or almost fully invested
may result in greater potential fluctuation in the value of such
Fund's net assets and its net asset value per share.

Borrowing Money-As a fundamental policy, each Fund is permitted
to borrow to the extent permitted under the 1940 Act. However,
each of the Municipal Bond Fund, Intermediate Municipal Bond
Fund, Municipal Money Market Fund and U.S. Government Money
Market Fund currently intends to borrow money only for temporary
or emergency (not leveraging) purposes, in an amount up to 15%
of the value of its total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of such Fund's total assets,
the Fund will not make any additional investments.
<PAGE>

THE PRAIRIE FUNDS
CLASS A, CLASS B AND CLASS I SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 1, 1995

This Statement of Additional Information, which is not
a prospectus, supplements and should be read in conjunction with
the current Prospectus for 14 separate funds (each, a "Fund"),
dated June 1, 1995, as it may be revised from time to time. To
obtain a copy of the Prospectus, please write to the Prairie
Funds at Three First National Plaza, Chicago, Illinois 60670, or
call toll free 1-800-370-9446.

First Chicago Investment Management Company (the
"Investment Adviser" or "FCIMCO") serves as each Fund's
investment adviser and administrator.

Concord Financial Group, Inc. (the "Distributor")
serves as the distributor of the Funds' shares.

TABLE OF CONTENTS

Page

Investment Objectives and Management Policies. . . . B-2
Management of the Funds. . . . . . . . . . . . . . B-23
Management Arrangements. . . . . . . . . . . . . . . B-26
Purchase of Shares . . . . . . . . . . . . . . . . . B-34
Distribution Plans and Shareholder Services Plans. . B-35
Redemption of Shares . . . . . . . . . . . . . . . . B-39
Determination of Net Asset Value . . . . . . . . . . B-40
Portfolio Transactions . . . . . . . . . . . . . . . B-43
Dividends, Distributions and Taxes . . . . . . . . . B-44
Yield and Performance Information. . . . . . . . . . B-47
Information About the Funds. . . . . . . . . . . . . B-52
Counsel and Independent Auditors . . . . . . . . . . B-54
Appendix . . . . . . . . . . . . . . . . . . . . . . B-55
Financial Statements . . . . . . . . . . . . . . . . B-65
Reports of Independent Auditors. . . . . . . . . B-70, B-84
B-97, B-139,
B-151, B-164

<PAGE>

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"Description of the Funds" and "Appendix."

General

The Prairie Funds are divided into five general fund
types: Asset Allocation (Managed Assets Income Fund and Managed
Assets Fund); Equity (Equity Income Fund, Growth Fund, Special
Opportunities Fund and International Equity Fund); Bond (Bond
Fund, Intermediate Bond Fund and International Bond Fund);
Municipal Bond (Municipal Bond Fund and Intermediate Municipal
Bond Fund); and Money Market (U.S. Government Money Market Fund,
Money Market Fund and Municipal Money Market Fund). Each of the
Intermediate Bond Fund and Municipal Bond Fund is a separate
open-end, management investment company organized under the name
Prairie Intermediate Bond Fund and Prairie Municipal Bond Fund,
Inc., respectively. The remaining Funds are series of Prairie
Funds (the "Trust"), an open-end, management investment company.

Portfolio Securities

Bank Obligations. (Each Fund, except the U.S.
Government Money Market Fund) Domestic commercial banks
organized under Federal law are supervised and examined by the
Comptroller of the Currency and are required to be members of
the Federal Reserve System and to have their deposits insured by
the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and
examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In addition,
state banks whose certificates of deposit ("CDs") may be
purchased by each Fund are insured by the FDIC (although such
insurance may not be of material benefit to a Fund, depending on
the principal amount of the CDs of each bank held by such Fund)
and are subject to Federal examination and to a substantial body
of Federal law and regulation. As a result of Federal or state
laws and regulations, domestic branches of domestic banks whose
CDs may be purchased by the Fund generally are required, among
other things, to maintain specified levels of reserves, are
limited in the amounts which they can loan to a single borrower
and are subject to other regulation designed to promote
financial soundness. However, not all of such laws and
regulations apply to the foreign branches of domestic banks.

Obligations of foreign branches of domestic banks,
foreign subsidiaries of domestic banks and domestic and foreign
branches of foreign banks, such as CDs and time deposits
("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms
of a specific obligation and governmental regulation. Such
obligations are subject to different risks than are those of
domestic banks. These risks include foreign economic and
political developments, foreign governmental restrictions that
may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding
and other taxes on interest income. These foreign branches and
subsidiaries are not necessarily subject to the same or similar
regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and
accounting, auditing and financial record keeping requirements.
In addition, less information may be publicly available about a
foreign branch of a domestic bank or about a foreign bank than
about a domestic bank.

Obligations of United States branches of foreign banks
may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific
obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may be subject to reserve
requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed
in that state.

In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within
the state, a certain percentage of their assets as fixed from
time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a
specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or
branches within the state. The deposits of Federal and State
Branches generally must be insured by the FDIC if such branches
take deposits of less than $100,000.

In view of the foregoing factors associated with the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Investment Adviser carefully evaluates such
investments on a case-by-case basis.

Repurchase Agreements. The Funds' custodian or sub-
custodian will have custody of, and will hold in a segregated
account, securities acquired by a Fund under a repurchase
agreement. Repurchase agreements are considered by the staff of
the Securities and Exchange Commission to be loans by the Fund.
In an attempt to reduce the risk of incurring a loss on a
repurchase agreement, each Fund will enter into repurchase
agreements only with domestic banks with total assets in excess
of one billion dollars, or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect
to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the
value of the securities purchased should decrease below the
resale price. The Investment Adviser will monitor on an ongoing
basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. The Fund will consider
on an ongoing basis the creditworthiness of the institutions
with which the Fund enters into repurchase agreements.

Commercial Paper and Other Short-Term Corporate
Obligations. (Each Fund, except the U.S. Government Money
Market Fund) Variable rate demand notes include variable amount
master demand notes, which are obligations that permit a Fund to
invest fluctuating amounts at varying rates of interest pursuant
to direct arrangements between the Fund, as lender, and the
borrower. These notes permit daily changes in the amounts
borrowed. As mutually agreed between the parties, the Fund may
increase the amount under the notes at any time up to the full
amount provided by the note agreement, or decrease the amount,
and the borrower may repay up to the full amount of the note
without penalty. Because these obligations are direct lending
arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus
accrued interest, at any time. Accordingly, where these
obligations are not secured by letters of credit or other credit
support arrangements, a Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on
demand. In connection with floating and variable rate demand
obligations, the Investment Adviser will consider, on an ongoing
basis, earning power, cash flow and other liquidity ratios of
the borrower, and the borrower's ability to pay principal and
interest on demand. Such obligations frequently are not rated
by credit rating agencies, and a Fund may invest in them only if
at the time of an investment the borrower meets the criteria set
forth in the Prospectus for other commercial paper issuers.

Mortgage-Related Securities (Asset Allocation, Equity and Bond
Funds only)

Government Agency Securities. Mortgage-related
securities issued by the Government National Mortgage
Association ("GNMA") include GNMA Mortgage Pass-Through
Certificates (also known as "Ginnie Maes") which are guaranteed
as to the timely payment of principal and interest by GNMA and
such guarantee is backed by the full faith and credit of the
United States. GNMA is a wholly-owned U.S. Government
corporation within the department of Housing and Urban
Development. GNMA certificates also are supported by the
authority of GNMA to borrow funds from the U.S. Treasury to make
payments under its guarantee.

Government Related Securities. Mortgage-related
securities issued by the Federal National Mortgage Association
("FNMA") include FNMA Guaranteed Mortgage Pass-Through
Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to the
full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private
stockholders. Fannie Maes are guaranteed as to timely payment
of principal and interest by FNMA.

Mortgage-related securities issued by the Federal Home
Loan Mortgage Corporation ("FHLMC") include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or
"PCs"). The FHLMC is a corporate instrumentality of the United
States created pursuant to an Act of Congress, which is owned
entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Bank
and do not constitute a debt or obligation of the United States
or of any Federal Home Loan Bank. Freddie Macs entitle the
holder to timely payment of interest, which is guaranteed by the
FHLMC. The FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying
mortgage loans. When the FHLMC does not guarantee timely
payment of principal, FHLMC may remit the amount due on account
of its guarantee of ultimate payment of principal at any time
after default on an underlying mortgage, but in no event later
than one year after it becomes payable.

Municipal Obligations. (Asset Allocation, Equity,
Bond and Municipal Funds only) Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of
its faith, credit and taxing power for the payment of principal
and interest. Revenue bonds are payable from the revenue
derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power.
Industrial development bonds, in most cases, are revenue bonds
and generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the
corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a
bond sale, collection of taxes or receipt of other revenues.
Municipal Obligations include municipal lease/purchase
agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities. Certain
Municipal Obligations are subject to redemption at a date
earlier than their stated maturity pursuant to call options,
which may be separated from the related Municipal Obligation and
purchased and sold separately. Each of these Funds will invest
in Municipal Obligations, the ratings of which correspond with
the ratings of other permissible Fund investments.

For the purpose of diversification under the
Investment Company Act of 1940 (the "1940 Act"), the
identification of the issuer of Municipal Obligations depends on
the terms and conditions of the security. When the assets and
revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the
assets and revenues of the subdivision, such subdivision would
be deemed to be the sole issuer. Similarly, in the case of an
industrial development bond, if that bond is backed only by the
assets and revenues of the non-governmental user, then such non-
governmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other
entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue
of such government or other entity.

The yields on Municipal Obligations are dependent on a
variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation, and rating of the issue. The imposition of the
Fund's advisory and administration fees, as well as other
operating expenses, will have the effect of reducing the yield
to investors.

Municipal lease obligations or installment purchase
contract obligations (collectively, "lease obligations") have
special risks not ordinarily associated with Municipal
Obligations. Although lease obligations do not constitute
general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget
for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a
yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property
in the event of foreclosure might prove difficult. The
Municipal Money Market Fund will seek to minimize these risks by
investing only in those lease obligations that (1) are rated in
one of the two highest categories for debt obligations by at
least two nationally recognized statistical rating organizations
(or one rating organization if the lease obligation was rated by
only one such organization); or (2) if unrated, are purchased
principally from the issuer or domestic banks or other
responsible third parties, in each case only if the seller shall
have entered into an agreement with the Municipal Money Market
Fund providing the seller or other responsible third party will
either remarket or repurchase the lease obligations within a
short period after demand by the Fund. With respect to the
Intermediate Municipal Bond Fund and Municipal Bond Fund, the
Board has established guidelines for the Investment Adviser to
determine the liquidity and appropriate valuation of lease
obligations based on factors which include: (1) the frequency
of trades and quotes for the lease obligation or similar
securities; (2) the number of dealers willing to purchase or
sell the lease obligation or similar securities and the number
of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security or similar
securities; and (4) the nature of the marketplace trades,
including the time needed to dispose of the security, the method
of soliciting offers, and the mechanics of transfer. Not more
than 15% (10% in the case of the Municipal Money Market Fund) of
the value of the Fund's net assets will be invested in lease
obligations that are illiquid and in other illiquid securities.
See "Investment Restrictions" below.

Each of the Intermediate Municipal Bond Fund and
Municipal Bond Fund will purchase tender option bonds only when
it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not
adversely affect the tax exempt status of the underlying
Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund.
Based on the tender option bond agreement, each such Fund
expects to be able to value the tender option bond at par;
however, the value of the instrument will be monitored to assure
that is valued at fair value.

The Municipal Money Market Fund will not purchase
tender option bonds unless (a) the demand feature applicable
thereto is exercisable by the Fund within 13 months of the date
of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than
annually upon no more than 30 days' notice and (b) at the time
of such purchase, the Investment Adviser reasonably expects (i)
based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender option to terminate
the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the
Fund will exercise the tender option with respect to any tender
option bonds unless the Investment Adviser reasonably expects,
(x) based upon its assessment of current and historical interest
rate trends, that prevailing short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and
(y) that the circumstances which might entitle the grantor of a
tender option to terminate the tender option would not occur
prior to the time of the next tender opportunity. The Municipal
Money Market Fund will exercise the tender feature with respect
to tender option bonds, or otherwise dispose of its tender
option bonds, prior to the time the tender option is scheduled
to expire pursuant to the terms of the agreement under which the
tender option is granted. The Municipal Money Market Fund
otherwise will comply with the provisions of Rule 2a-7 in
connection with the purchase of tender option bonds, including,
without limitation, the requisite determination by the Board
that the tender option bonds in question meet the quality
standards described in Rule 2a-7, which, in the case of a tender
option bond subject to a conditional demand feature, would
include a determination that the security has received both the
required short-term and long-term quality rating or is
determined to be of comparable quality. In the event of a
default of the Municipal Obligation underlying a tender option
bond, or the termination of the tender option agreement, the
Municipal Money Market Fund would look to the maturity date of
the underlying security for purposes of compliance with Rule
2a-7 and, if its remaining maturity was greater than 13 months,
the Fund would sell the security as soon as would be
practicable. The Municipal Money Market Fund will purchase
tender option bonds only when it is satisfied that the custodial
and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any
tender fees will not have the effect of creating taxable income
for the Fund. Based on the tender option bond agreement, the
Municipal Money Market Fund expects to be able to value the
tender option bond at par; however, the value of the instrument
will be monitored to assure that it is valued at fair value.

If, subsequent to its purchase by the Municipal Money
Market Fund, (a) an issue of rated Municipal Obligations ceases
to be rated in the highest rating category by at least two
ratings organizations (or one rating organization if the
instrument was rated by only one such organization), or the
Board determines that it is no longer of comparable quality; or
(b) the Investment Adviser becomes aware that any portfolio
security not so highly rated or any unrated security has been
given a rating by any rating organization below the rating
organization's second highest rating category, the Board will
reassess promptly whether such security presents minimal credit
risk and will cause the Fund to take such action as it
determines is in the best interest of the Fund and its
shareholders, provided that the reassessment required by clause
(b) is not required if the portfolio security is disposed of or
matures within five business days of the Investment Adviser
becoming aware of the new rating and the Board is subsequently
notified of the Investment Adviser's actions.

To the extent that the ratings given by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") or Fitch Investors Service Inc. ("Fitch")
for Municipal Obligations may change as a result of changes in
such organizations or their rating systems, the Municipal Funds
will attempt to use comparable ratings as standards for its
investments in accordance with the investment policies contained
in the Prospectus and this Statement of Additional Information.
The ratings of Moody's, S&P and Fitch represent their opinions
as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Investment
Adviser will also evaluate these securities and the
creditworthiness of the issuers of such securities.

For the Municipal Bond Fund, the average distribution
of investments (at value) in Municipal Obligations by ratings
for the fiscal year ended February 28, 1995, computed on a
monthly basis, was as follows:

Fitch or Moody's or S&P Percentage of Value

AAA Aaa AAA [84.7%
AA Aa AA 1.1
A A A .3
BBB Baa BBB 1.5
F1 MIG 1/VMIG 1 SP1 8.8
F1 P1 A1 3.6 ]
100.0%

Convertible Securities. (Asset Allocation, Equity and
Bond Funds only) In general, the market value of a convertible
security is the higher of its "investment value" (i.e., its
value as a fixed-income security) or its "conversion value"
(i.e., the value of the underlying shares of common stock if the
security is converted). As a fixed-income security, the market
value of a convertible security generally increases when
interest rates decline and generally decreases when interest
rates rise. However, the price of a convertible security also
is influenced by the market value of the security's underlying
common stock. Thus, the price of a convertible security
generally increases as the market value of the underlying stock
increases, and generally decreases as the market value of the
underlying stock declines. Investments in convertible
securities generally entail less risk than investments in the
common stock of the same issuer.

Illiquid Securities. When purchasing securities that
have not been registered under the Securities Act of 1933, as
amended, and are not readily marketable, the Fund will endeavor
to obtain the right to registration at the expense of the
issuer. Generally, there will be a lapse of time between a
Fund's decision to sell any such security and the registration
of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations.
However, if a substantial market of qualified institutional
buyers develops pursuant to Rule 144A under the Securities Act
of 1933, as amended, for certain unregistered securities held by
a Fund, such Fund intends to treat them as liquid securities in
accordance with procedures approved by the Board. Because it is
not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the
Board has directed the Investment Adviser to monitor carefully
each Fund's investments in such securities with particular
regard to trading activity, availability of reliable price
information and other relevant information. To the extent that,
for a period of time, qualified institutional buyers cease
purchasing restricted securities pursuant to Rule 144A, a Fund's
investing in such securities may have the effect of increasing
the level of illiquidity in such Fund during such period.

Management Policies

Leveraging. (Asset Allocation, Equity, Bond and, to a
limited extent, Money Market Funds only) Each of these Funds may
borrow for investment purposes. The Money Market Fund may
borrow for investment purposes only through entering into
reverse repurchase agreements. The 1940 Act requires the Fund
to maintain continuous asset coverage (that is, total assets
including borrowings, less liabilities exclusive of borrowings)
of 300% of the amount borrowed. If the 300% asset coverage
should decline as a result of market fluctuations or other
reasons, the Fund may be required to sell some of its portfolio
holdings within three days to reduce the debt and restore the
300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time. The
Fund also may be required to maintain minimum average balances
in connection with such borrowings or to pay a commitment or
other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the
stated interest rate.

With respect to repurchase agreements, the Fund will
maintain in a segregated custodial account cash or U.S.
Government securities or other high quality liquid debt
securities at least equal to the aggregate amount of its reverse
repurchase obligations, plus accrued interest, in certain cases,
in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission
views reverse repurchase transactions as collateralized
borrowings by the Fund. These agreements, which are treated as
if reestablished each day, are expected to provide the Fund with
a flexible borrowing tool.

Short-Selling. (Asset Allocation, Equity and Bond
Funds only) Each of these Funds may engage in short-selling.
Until the Fund replaces a borrowed security in connection with a
short sale, the Fund will: (a) maintain daily a segregated
account, containing cash, cash equivalents or U.S. Government
securities, at such a level that (i) the amount deposited in the
account plus the amount deposited with the broker as collateral
will equal the current value of the security sold short and (ii)
the amount deposited in the segregated account plus the amount
deposited with the broker as collateral will not be less than
the market value of the security at the time it was sold short;
or (b) otherwise cover its short position.

Options Transactions. (Asset Allocation, Equity and
Bond Funds only) Each of these Funds may engage in options
transactions, such as purchasing or writing covered call or put
options. The principal reason for writing covered call options
is to realize, through the receipt of premiums, a greater return
than would be realized on a Fund's securities alone. In return
for a premium, the writer of a covered call option forfeits the
right to any appreciation in the value of the underlying
security above the strike price for the life of the option (or
until a closing purchase transaction can be effected).
Nevertheless, the call writer retains the risk of a decline in
the price of the underlying security. Similarly, the principal
reason for writing covered put options is to realize income in
the form of premiums. The writer of a covered put option
accepts the risk of a decline in the price of the underlying
security. The size of the premiums that a Fund may receive may
be adversely affected as new or existing institutions, including
other investment companies, engage in or increase their option-
writing activities.

Options written ordinarily will have expiration dates
between one and nine months from the date written. The exercise
price of the options may be below, equal to or above the market
values of the underlying securities at the time the options are
written. In the case of call options, these exercise prices are
referred to as "in-the-money," "at-the-money" and "out-of-the-
money," respectively. Each Fund may write (a) in-the-money call
options when the Investment Adviser expects that the price of
the underlying security will remain stable or decline moderately
during the option period, (b) at-the-money call options when the
Investment Adviser expects that the price of the underlying
security will remain stable or advance moderately during the
option period and (c) out-of-the-money call options when the
Investment Adviser expects that the premiums received from
writing the call option plus the appreciation in market price of
the underlying security up to the exercise price will be greater
than the appreciation in the price of the underlying security
alone. In these circumstances, if the market price of the
underlying security declines and the security is sold at this
lower price, the amount of any realized loss will be offset
wholly or in part by the premium received. Out-of-the-money,
at-the-money and in-the-money put options (the reverse of call
options as to the relation of exercise price to market price)
may be utilized in the same market environments that such call
options are used in equivalent transactions.

So long as a Fund's obligation as the writer of an
option continues, such Fund may be assigned an exercise notice
by the broker-dealer through which the option was sold,
requiring the Fund to deliver, in the case of a call, or take
delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation
terminates when the option expires or a Fund effects a closing
purchase transaction. A Fund can no longer effect a closing
purchase transaction with respect to an option once it has been
assigned an exercise notice.

While it may choose to do otherwise, each Fund
generally will purchase or write only those options for which
the Investment Adviser believes there is an active secondary
market so as to facilitate closing transactions. There is no
assurance that sufficient trading interest to create a liquid
secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some
options no such secondary market may exist. A liquid secondary
market in an option may cease to exist for a variety of reasons.
In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times
have rendered certain clearing facilities inadequate and
resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or
trading halts or suspensions in one or more options. There can
be no assurance that similar events, or events that otherwise
may interfere with the timely execution of customers' orders,
will not recur. In such event, it might not be possible to
effect closing transactions in particular options. If as a
covered call option writer a Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able
to sell the underlying security until the option expires or it
delivers the underlying security upon exercise or it otherwise
covers its position.

Stock Index Options. (Asset Allocation and Equity
Funds only) Each of these Funds may purchase and write put and
call options on stock indexes listed on a securities exchange or
traded in the over-the-counter market. A stock index fluctuates
with changes in the market values of the stocks included in the
index.

Options on stock indexes are similar to options on
stock except that (a) the expiration cycles of stock index
options are generally monthly, while those of stock options are
currently quarterly, and (b) the delivery requirements are
different. Instead of giving the right to take or make delivery
of a stock at a specified price, an option on a stock index
gives the holder the right to receive a cash "exercise
settlement amount" equal to (i) the amount, if any, by which the
fixed exercise price of the option exceeds (in the case of a
put) or is less than (in the case of a call) the closing value
of the underlying index on the date of exercise, multiplied by
(ii) a fixed "index multiplier." Receipt of this cash amount
will depend upon the closing level of the stock index upon which
the option is based being greater than, in the case of a call,
or less than, in the case of a put, the exercise price of the
option. The amount of cash received will be equal to such
difference between the closing price of the index and the
exercise price of the option expressed in dollars times a
specified multiple. The writer of the option is obligated, in
return for the premium received, to make delivery of this
amount. The writer may offset its position in stock index
options prior to expiration by entering into a closing
transaction on an exchange or it may let the option expire
unexercised.

Futures Contracts and Options on Futures Contracts.
(Asset Allocation, Equity, Bond and Municipal Bond Funds Only)
Each of these Funds may trade futures contracts and options on
futures contracts in U.S. domestic markets, such as the Chicago
Board of Trade and the International Monetary Market of the
Chicago Mercantile Exchange, or, to the extent permitted under
applicable law, on exchanges located outside the United States,
such as the London International Financial Futures Exchange and
the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading in commodities that are not currently
traded in the United States or arbitrage possibilities not
available in the United States.

Initially, when purchasing or selling futures
contracts a Fund will be required to deposit with the Fund's
custodian in the broker's name an amount of cash or cash
equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of
trade on which the contract is traded and members of such
exchange or board of trade may impose their own higher
requirements. This amount is known as "initial margin" and is
in the nature of a performance bond or good faith deposit on the
contract which is returned to the Fund upon termination of the
futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to
and from the broker will be made daily as the price of the index
or securities underlying the futures contract fluctuates, making
the long and short positions in the futures contract more or
less valuable, a process known as "marking-to-market." At any
time prior to the expiration of a futures contract, the Fund may
elect to close the position by taking an opposite position, at
the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.

Although each of these Funds intends to purchase or
sell futures contracts only if there is an active market for
such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time.
Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified
periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of
futures positions and potentially subjecting a Fund to
substantial losses. If it is not possible, or the Fund
determines not, to close a futures position in anticipation of
adverse price movements, the Fund will be required to make daily
cash payments of variation margin. In such circumstances, an
increase in the value of the portion of the portfolio being
hedged, if any, may offset partially or completely losses on the
futures contract. However, no assurance can be given that the
price of the securities being hedged will correlate with the
price movements in a futures contract and thus provide an offset
to losses on the futures contract.

In addition, to the extent a Fund is engaging in a
futures transaction as a hedging device, due to the risk of an
imperfect correlation between securities owned by the Fund that
are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the
portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of
gains on the portfolio securities that were the subject of the
hedge. In futures contracts based on indexes, the risk of
imperfect correlation increases as the composition of a Fund's
investments varies from the composition of the index. In an
effort to compensate for the imperfect correlation of movements
in the price of the securities being hedged and movements in the
price of futures contracts, the Fund may buy or sell futures
contracts in a greater or lesser dollar amount than the dollar
amount of the securities being hedged if the historical
volatility of the futures contract has been less or greater than
that of the securities. Such "over hedging" or "under hedging"
may adversely affect a Fund's net investment results if market
movements are not as anticipated when the hedge is established.

Upon exercise of an option, the writer of the option
will deliver to the holder of the option the futures position
and the accumulated balance in the writer's futures margin
account, which represents the amount by which the market price
of the futures contract exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of the
option on the futures contract. The potential loss related to
the purchase of options on futures contracts is limited to the
premium paid for the option (plus transaction costs). Because
the value of the option is fixed at the time of sale, there are
no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does
change daily and that change would be reflected in the net asset
value of each Fund.

Foreign Currency Transactions. (Asset Allocation,
Growth, International Equity, Special Opportunities and
International Bond Funds only) If a Fund enters into a currency
transaction, it will deposit, if so required by applicable
regulations, with its custodian cash or readily marketable
securities in a segregated account of the Fund in an amount at
least equal to the value of the Fund's total assets committed to
the consummation of the forward contract. If the value of the
securities placed in the segregated account declines, additional
cash or securities will be placed in the account so that the
value of the account will equal the amount of the Fund's
commitment with respect to the contract.

At or before the maturity of a forward contract, the
Fund either may sell a security and make delivery of the
currency, or retain the security and offset its contractual
obligation to deliver the currency by purchasing a second
contract pursuant to which the Fund will obtain, on the same
maturity date, the same amount of the currency which it is
obligated to deliver. If the Fund retains the portfolio
security and engages in an offsetting transaction, such Fund, at
the time of execution of the offsetting transaction, will incur
a gain or loss to the extent movement has occurred in forward
contract prices. Should forward prices decline during the
period between the Fund's entering into a forward contract for
the sale of a currency and the date it enters into an offsetting
contract for the purchase of the currency, the Fund will realize
a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to
purchase. Should forward prices increase, the Fund will suffer
a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to
sell.

The cost to each of these Funds of engaging in
currency transactions varies with factors such as the currency
involved, the length of the contract period and the market
conditions then prevailing. Because transactions in currency
exchange usually are conducted on a principal basis, no fees or
commissions are involved. The use of forward currency exchange
contracts does not eliminate fluctuations in the underlying
prices of the securities, but it does establish a rate of
exchange that can be achieved in the future. If a devaluation
generally is anticipated, a Fund may not be able to contract to
sell the currency at a price above the devaluation level it
anticipates. The requirements for qualification as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), may cause the Fund to restrict the degree
to which each Fund engages in currency transactions. See
"Dividends, Distributions and Taxes."

Lending Portfolio Securities. To a limited extent,
each Fund may lend its portfolio securities to brokers, dealers
and other financial institutions, provided it receives cash
collateral which at all times is maintained in an amount equal
to at least 100% of the current market value of the securities
loaned. By lending its portfolio securities, a Fund can
increase its income through the investment of the cash
collateral. For purposes of this policy, each Fund considers
collateral consisting of U.S. Government securities or, except
in the case of the U.S. Government Money Market Fund,
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by such Fund to be the
equivalent of cash. From time to time, the Fund may return to
the borrower or a third party which is unaffiliated with the
Fund, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.

The Securities and Exchange Commission currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Fund must receive at
least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the
Fund must be able to terminate the loan at any time; (4) the
Fund must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions payable on the
loaned securities, and any increase in market value; (5) the
Fund may pay only reasonable custodian fees in connection with
the loan; and (6) while voting rights on the loaned securities
may pass to the borrower, the Board must terminate the loan and
regain the right to vote the securities if a material event
adversely affecting the investment occurs. These conditions may
be subject to future modification.

Investment Restrictions

Applicable to Trust only. Each Fund that is a series
of the Trust has adopted investment restrictions numbered 1
through 7 as fundamental policies. In addition, the Money
Market Fund has adopted investment restrictions numbered 14 and
15, the Municipal Funds have adopted investment restriction
number 16, the Diversified Funds, other than the Money Market
Fund and Intermediate Municipal Bond Fund, have adopted
investment restriction number 17, and the Diversified Funds,
other than the Money Market and Municipal Funds, have adopted
investment restrictions numbered 18 and 19 as additional
fundamental policies. These restrictions cannot be changed, as
to a Fund, without approval by the holders of a majority (as
defined in the 1940 Act) of such Fund's outstanding voting
shares. Investment restrictions numbered 8 through 13 and 20
through 22 are not fundamental policies and may be changed by
vote of a majority of the Trust's Trustees at any time. No Fund
may:

1. Invest in commodities, except that each Fund may
purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options
on futures contracts or indexes.

2. Purchase, hold or deal in real estate, including
real estate limited partnership interests, or oil, gas or
other mineral leases or exploration or development
programs, but each Fund may purchase and sell securities
that are secured by real estate or issued by companies that
invest or deal in real estate.

3. Borrow money, except to the extent permitted
under the 1940 Act. For purposes of this investment
restriction, a Fund's entry into options, forward
contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall
not constitute borrowing.

4. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase
agreements. However, each Fund may lend its securities in
an amount not to exceed 33-1/3% of the value of its total
assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and
Exchange Commission and the Trust's Board of Trustees.

5. Act as an underwriter of securities of other
issuers, except to the extent a Fund may be deemed an
underwriter under the Securities Act of 1933, as amended,
by virtue of disposing of portfolio securities, and except
that the Fund may bid separately or as part of a group for
the purchase of Municipal Obligations directly from an
issuer for its own portfolio to take advantage of the lower
purchase price available.

6. Issue any senior security (as such term is
defined in Section 18(f) of the 1940 Act), except to the
extent the activities permitted under Investment
Restriction Nos. 1, 3, 9 and 10 may be deemed to give rise
to senior securities.

7. Purchase securities on margin, but each Fund may
make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts
or indexes.

8. Invest in the securities of a company for the
purpose of exercising management or control, but each Fund
will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.

9. Pledge, mortgage or hypothecate its assets,
except to the extent necessary to secure permitted
borrowings and to the extent related to the deposit of
assets in escrow in connection with writing covered put and
call options and the purchase of securities on a when-
issued or forward commitment basis and collateral and
initial or variation margin arrangements with respect to
options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts
or indexes.

10. Purchase, sell or write puts, calls or
combinations thereof, except as described in the Prospectus
and this Statement of Additional Information.

11. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more
than 15% (10% in the case of a Money Market Fund) of the
value of the Fund's net assets would be so invested.

12. Invest in securities of other investment
companies, except to the extent permitted under the 1940
Act.

13. Purchase securities of any company having less
than three years' continuous operations (including
operations of any predecessors) if such purchase would
cause the value of the Fund's investments in all such
companies to exceed 10% of the value of its total assets.

The following investment restrictions numbered 14 and
15 apply only to the Money Market Fund. The Money Market Fund
may not:

14. Invest more than 5% of its assets in the
obligations of any one issuer, except that up to 25% of the
value of the Money Market Fund's total assets may be
invested (subject to Rule 2a-7 under the 1940 Act) without
regard to any such limitation.

15. Invest less than 25% of its total assets in
securities issued by banks or invest more than 25% of its
assets in the securities of issuers in any other industry,
provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities. Notwithstanding the
foregoing, for temporary defensive purposes, the Money
Market Fund may invest less than 25% of its total assets in
bank obligations.

The following investment restriction number 16 applies
only to the Municipal Funds. None of these Funds may:

16. Invest more than 25% of its total assets in the
securities of issuers in any single industry, provided that
there shall be no such limitation on the purchase of
Municipal Obligations and, for temporary defensive
purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

The following investment restriction number 17 applies
only to the Diversified Funds, other than the Money Market Fund
and Intermediate Municipal Bond Fund. None of these Funds may:

17. Invest more than 5% of its assets in the
obligations of any single issuer, except that up to 25% of
the value of the Fund's total assets may be invested, and
securities issued or guaranteed by the U.S. Government, or
its agencies or instrumentalities may be purchased, without
regard to any such limitation.

The following investment restriction numbers 18 and 19
apply only to the Diversified Funds, other than the Money Market
and Municipal Funds. None of these Funds may:

18. Hold more than 10% of the outstanding voting
securities of any single issuer. This Investment
Restriction applies only with respect to 75% of the Fund's
total assets.

19. Invest more than 25% of its assets in the
securities of issuers in any single industry, except that,
there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.

The following investment restriction number 20, which
is not a fundamental policy, applies only to the Money Market
Funds. Neither of these Funds may:

20. Sell securities short.

The following investment restriction number 21, which
is not a fundamental policy, applies only to the Municipal Money
Market Fund. The Municipal Money Market Fund may not:

21. Purchase securities other than municipal
obligations and taxable Money Market Instruments.

The following investment restriction number 22, which
is not a fundamental policy, applies only to the U.S. Government
Money Market Fund. The U.S. Government Money Market Fund may
not:

22. Purchase common stocks, preferred stocks,
warrants or other equity securities, or purchase corporate
bonds (except as set forth in the Prospectus) or
debentures, state bonds, municipal bonds or industrial
revenue bonds.

For purposes of Investment Restriction No. 16,
industrial development bonds, where the payment of principal and
interest is the ultimate responsibility of companies within the
same industry, are grouped together as an "industry."

Applicable to Prairie Intermediate Bond Fund only.
The Intermediate Bond Fund has adopted investment restrictions
numbered 1 through 7 as fundamental policies. These
restrictions cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of the Intermediate
Bond Fund's outstanding voting shares. Investment restrictions
numbered 8 through 11 are not fundamental policies and may be
changed by vote of a majority of the Fund's Trustees at any
time. The Intermediate Bond Fund may not:

1. Invest in commodities, except that the Fund may
purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options
on futures contracts or indexes.

2. Purchase, hold or deal in real estate, real
estate limited partnership interests, or oil, gas or other
mineral leases or exploration or development programs, but
the Fund may purchase and sell securities that are secured
by real estate and may purchase and sell securities issued
by companies that invest or deal in real estate.

3. Borrow money, except to the extent permitted
under the 1940 Act. For purposes of this investment
restriction, the entry into options, forward contracts,
futures contracts, including those relating to indexes, and
options on futures contracts shall not constitute
borrowing.

4. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase
agreements. However, the Fund may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of
Trustees.

5. Act as an underwriter of securities of other
issuers.

6. Invest more than 25% of its assets in the
securities of issuers in any single industry, provided that
there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.

7. Issue any senior security (as such term is
defined in Section 18(f) of the 1940 Act), except to the
extent the activities permitted in Investment Restriction
Nos. 1, 3, 8 and 9 may be deemed to give rise to a senior
security.

8. Pledge, mortgage or hypothecate its assets,
except to the extent necessary to secure permitted
borrowings and to the extent related to the deposit of
assets in escrow in connection with writing covered put and
call options and the purchase of securities on a when-
issued or delayed-delivery basis and collateral and initial
or variation margin arrangements with respect to options,
forward contracts, futures contracts, including those
related to indexes, and options on futures contracts or
indexes.

9. Purchase, sell or write puts, calls or
combinations thereof, except as described in the Prospectus
and this Statement of Additional Information.

10. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more
than 15% of the value of the Fund's net assets would be so
invested.

11. Purchase securities of other investment
companies, except to the extent permitted under the 1940
Act.

Applicable to Prairie Municipal Bond Fund, Inc. only.
The Municipal Bond Fund has adopted investment restrictions
numbered 1 through 8 as fundamental policies. These
restrictions cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of the Municipal Bond
Fund's outstanding voting shares. Investment restrictions
numbered 9 through 13 are not fundamental policies and may be
changed by vote of a majority of the Fund's Directors at any
time. The Municipal Bond Fund may not:

1. Invest more than 25% of its assets in the
securities of issuers in any single industry; provided that
there shall be no such limitation on the purchase of
Municipal Obligations and, for temporary defensive
purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

2. Borrow money, except to the extent permitted under
the 1940 Act. For purposes of this investment restriction,
the entry into options, forward contracts, futures
contracts, including those relating to indexes, and options
on futures contracts or indexes shall not constitute
borrowing.

3. Purchase or sell real estate, or oil and gas
interests, but the Fund may invest in Municipal Obligations
secured by real estate or interests therein.

4. Underwrite the securities of other issuers, except
that the Fund may bid separately or as part of a group for
the purchase of Municipal Obligations directly from an
issuer for its own portfolio to take advantage of the lower
purchase price available, and except to the extent the Fund
may be deemed an underwriter under the Securities Act of
1933, as amended, by virtue of disposing of portfolio
securities.

5. Make loans to others, except through the purchase
of debt obligations and the entry into repurchase
agreements; however, the Fund may lend its portfolio
securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the
Securities and Exchange Commission and the Fund's Board of
Directors.

6. Issue any senior security (as such term is defined
in Section 18(f) of the 1940 Act), except to the extent
that the activities permitted in Investment Restriction
Nos. 2, 7, 8 and 11 may be deemed to give rise to a senior
security.

7. Purchase securities on margin, but the Fund may
make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts
or indexes.

8. Invest in commodities, except that the Fund may
purchase and sell forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.

9. Purchase securities other than Municipal
Obligations and taxable Money Market Instruments and those
arising out of transactions in futures and options or as
otherwise provided in the Prospectus.

10. Invest in securities of other investment
companies, except to the extent permitted under the 1940
Act.

11. Pledge, hypothecate, mortgage or otherwise
encumber its assets, except to the extent necessary to
secure permitted borrowings and to the extent related to
the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery
basis and collateral and initial or variation margin
arrangements with respect to options, forward contracts,
futures contracts, including those related to indexes and
options on futures contracts, or indexes.

12. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid (which securities could
include participation interests (including municipal
lease/purchase agreements) that are not subject to the
demand feature described in the Prospectus and floating and
variable rate demand notes and bonds as to which the Fund
cannot exercise the demand feature described in the
Prospectus on less than seven day's notice and as to which
there is no secondary market), if, in the aggregate, more
than 15% of its net assets would be so invested.

13. Invest in companies for the purpose of exercising
control.

For purposes of Investment Restriction No. 1, industrial
development bonds, where the payment of principal and interest
is the ultimate responsibility of companies within the same
industry, are grouped together as an "industry."
_______________________________

If a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage
resulting from a change in values or assets will not constitute
a violation of such restriction.

A Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund
shares in certain states. Should a Fund determine that a
commitment is no longer in the best interests of the Fund and
its shareholders, each Fund reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.

MANAGEMENT OF THE FUNDS

Board members and officers of each Fund, together with
information as to their principal business occupations during at
least the last five years, are shown below.

Board Members of the Funds

JOHN P. GOULD, Board Member. Distinguished Service Professor of
Economics of the University of Chicago Graduate School of
Business. From 1983 to 1993, Dean of the University of
Chicago Graduate School of Business. Dean Gould also
serves as Director of Harpor Capital Advisors. Mr. Gould
is also a Board member of five other funds in the Prairie
Family of Funds. He is 55 years old and his address is
1101 East 58th Street, Chicago, Illinois 60637.

MARILYN McCOY, Board Member. Vice President of
Administration and Planning of Northwestern
University. From 1981 to 1985, she was the Director
of Planning and Policy Development for the University
of Colorado. She also serves on the Board of
Directors of Evanston Hospital, the Chicago
Metropolitan YMCA, the Chicago Network and United
Charities. Mrs. McCoy is a member of the Chicago
Economics Club. Mrs. McCoy is also a Board member of
five other funds in the Prairie Family of Funds. She
is 46 years old and her address is 1100 North Lake
Shore Drive, Chicago, Illinois 60611.

RAYMOND D. ODDI, Board Member. Private consultant. A Director
of Caremark International, Inc. and Medisense, Inc.,
companies in the health care industry, and Baxter Credit
Union. From 1978 to 1986, Senior Vice President of Baxter
Inter- national, Inc., a company engaged in the production
of medical care products. He also is a member of the
Illinois Society of Certified Public Accountants. Mr. Oddi
is also a Board member of five other funds in the Prairie
Family of Funds. He is 66 years old and his address is
1181 Loch Lane, Lake Forest, Illinois 60045.

For so long as a plan described in the section
captioned "Distribution Plans and Shareholder Services Plans"
remains in effect, the Board members who are not "interested
persons" of the Fund, as defined in the 1940 Act, will be
selected and nominated by the Board members who are not
"interested persons" of the Fund.

Officers of the Funds

JOSEPH F. KISSEL, President. Executive Vice President of
Concord Holding Corporation, the Trust's sub-administrator
(the "Sub-Administrator"), and an officer of other
investment companies administered by the Sub-Administrator.
He is 47 years old and his address is 125 West 55th Street,
New York, New York 10019.

ANN E. BERGIN, Vice President. Senior Vice President of the
Sub-Administrator and an officer of other investment
companies administered by the Sub-Administrator. She is 35
years old and her address is 125 West 55th Street, New
York, New York 10019.

STEPHEN A. SMITH, Vice President. Senior Vice President of the
Distributor and an officer of other investment companies
distributed by the Distributor. He is 41 years old and his
address is 125 West 55th Street, New York, New York 10019.

RICHARD A. FABIETTI, Treasurer. Senior Vice President and
Treasurer of the Sub-Administrator and the Distributor and
an officer of other investment companies administered by
the Sub-Administrator. He is 36 years old and his address
is 125 West 55th Street, New York, New York 10019.

MARTIN G. FLANIGAN, Assistant Treasurer. Mutual Funds
Accounting Manager of the Sub-Administrator and an officer
of other investment companies administered by the Sub-
Administrator. He is 31 years old and his address is 125
West 55th Street, New York, New York 10019.

GEORGE O. MARTINEZ, Secretary. Senior Vice President and
Director of Legal and Compliance Services with BISYS Fund
Services, since April 1995. Prior thereto, he was Vice
President and Associate General Counsel with Alliance
Capital Management L.P. He is 36 years old and his address
is 1900 E. Dublin-Granville Road, Columbus, Ohio 43229.

LINDA MAHON, Assistant Secretary. Vice President of the Sub-
Administrator and Distributor, since January 1994, and an
officer of other investment companies administered by the
Sub-Administrator. From 1991 to 1994, she was Corporate
Secretary of J.& W. Seligman & Co. Incorporated. From 1989
to 1991, she was Vice President of Paribas Asset
Management, Inc. She is 40 years old and her address is
125 West 55th Street, New York, New York 10019.

ROBERT L. TUCH, Assistant Secretary. Since June 1991, an
employee of The Winsbury Company, which is an affiliate of
the Sub-Administrator. From July 1990 to June 1991, he was
Vice President and Associate General Counsel with National
Securities Research Corp. Prior thereto, he was an
Attorney with the Securities and Exchange Commission. He
is 44 years old and his address is 1900 E. Dublin-Granville
Road, Columbus, Ohio 43229.

Each Fund pays the Board members its allocable share
of the aggregate of a fixed fee of $25,000 per annum and a per
meeting fee of $1,000 for all funds in the Prairie Family of
Funds. The estimated aggregate amount of compensation payable
to each Board member by the Trust, Prairie Intermediate Bond
Fund and Prairie Municipal Bond Fund, Inc. and all other funds
in the Prairie Family of Funds for which such person is a Board
member for the fiscal year ending December 31, 1995 are as
follows:

<TABLE>
<CAPTION>
(2) (3) (5)
Aggregate Pension or (4) Total Compensation
(1) Compensation Retirement Benefits Estimated Annual From Fund and
Name of Board from Accrued as Part of Benefits Upon Fund Complex Paid
Member Fund* Fund's Expenses Retirement to Board Member
<S> <C> <C> <C> <C>

John P. Gould $30,000
Trust $21,175 None None
Prairie Intermediate Bond Fund $ 1,765 None None
Prairie Municipal Bond Fund,
Inc. $ 1,765 None None
Marilyn McCoy $30,000
Trust $21,175 None None
Prairie Intermediate Bond Fund $ 1,765 None None
Prairie Municipal Bond Fund,
Inc. $ 1,765 None None
Raymond D. Oddi $30,000
Trust $21,175 None None
Prairie Intermediate Bond Fund $ 1,765 None None
Prairie Municipal Bond Fund,
Inc. $ 1,765 None None

</TABLE>

______________________________
*Amount does not include reimbursed expenses for attending Board
meetings, which are estimated to be approximately $1,300 for
all Trustees as a group.

Board members and officers of the Funds, as a group,
owned less than 1% of any Fund's shares outstanding on May 1,
1995.

MANAGEMENT ARRANGEMENTS

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"Management of the Funds."

Investment Advisory Agreements. FCIMCO provides
investment advisory services pursuant to separate Investment
Advisory Agreements (each, an "Agreement") with the Trust,
Prairie Intermediate Bond Fund and Prairie Municipal Bond Fund,
Inc. As to each Fund, the Agreement is subject to annual
approval by (i) the Board or (ii) vote of a majority (as defined
in the 1940 Act) of the outstanding voting securities of such
Fund, provided that in either event the continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or
FCIMCO, by vote cast in person at a meeting called for the
purpose of voting on such approval. As to each Fund, the
Agreement is terminable without penalty, on 60 days' notice, by
the Board or by vote of the holders of a majority of such Fund's
shares, or, on not less than 90 days' notice, by FCIMCO. The
Agreement will terminate automatically, as to the relevant Fund,
in the event of its assignment (as defined in the 1940 Act).

FCIMCO is responsible for investment decisions for
each Fund in accordance with the stated policies of such Fund,
subject to the approval of the Board. All purchases and sales
are reported for the Board member's review at the meeting
subsequent to such transactions.

The following persons are officers and/or directors of
FCIMCO: J. Stephen Baine, Chairman of the Board of Directors,
Chief Executive Officer and President; Alan F. Delp, William G.
Jurgensen, Joseph M. Thomas and David J. Vitale, Directors;
Terrall J. Janeway, Treasurer, Chief Financial and Accounting
Officer and Managing Director; Bradford M. Markham, Secretary
and Chief Legal Officer; and Richard A. Davies, Deborah L.
Edwards, Marco Hanig, David R. Kling and Stephen P. Manus,
Managing Directors.

Sub-Investment Advisory Agreement. ANB Investment
Management and Trust Company ("ANB-IMC") provides investment
advisory assistance and day-to-day management of the
International Equity Fund's investments pursuant to the Sub-
Investment Advisory Agreement between ANB-IMC and FCIMCO. The
Sub-Investment Advisory Agreement is subject to annual approval
by (i) the Board or (ii) vote of a majority (as defined in the
1940 Act) of the International Equity Fund's outstanding voting
securities, provided that in either event the continuance also
is approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Trust
or ANB-IMC, by vote cast in person at a meeting called for the
purpose of voting on such approval. The Sub-Investment Advisory
Agreement is terminable without penalty, (i) by FCIMCO on 60
days' notice, (ii) by the Board or by vote of the holders of a
majority of the Fund's outstanding voting securities on 60 days'
notice, or (iii) upon not less than 90 days' notice, by ANB-IMC.
The Sub-Investment Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the
1940 Act).

ANB-IMC provides day-to-day management of the
International Equity Fund's investments, subject to the
supervision of FCIMCO and the Board. The fees payable to ANB-
IMC for its services are paid by FCIMCO.

The following persons are officers and/or directors of
ANB-IMC: Peter J. Kartalia, Neil R. Wright, Stephen P. Manus,
Alan F. Delp, David P. Bolger, Thomas P. Michaels and J. Stephen
Baine.

Administration and Sub-Administration Agreements.
Pursuant to separate Administration Agreements with the Trust,
Prairie Intermediate Bond Fund and Prairie Municipal Bond Fund,
Inc., FCIMCO assists in all aspects of the Funds' operations,
other than providing investment advice, subject to the overall
authority of the Board in accordance with applicable state law.
FCIMCO has engaged the Sub-Administrator to assist it in
providing certain administrative services to the Funds.
Pursuant to its agreement with FCIMCO (the "Sub-Administration
Agreement"), the Sub-Administrator assists FCIMCO in furnishing
the Funds clerical help and accounting, data processing,
bookkeeping, internal auditing and legal services and certain
other services required by the Funds, preparing reports to the
Funds' shareholders, tax returns, reports to and filings with
the Securities and Exchange Commission and state Blue Sky
authorities, calculating the net asset value of each Fund's
shares and generally in providing for all aspects of operation,
other than providing investment advice. The fees payable to the
Sub-Administrator for its services are paid by FCIMCO.

Each Fund has agreed that FCIMCO, ANB-IMC and the
Sub-Administrator will not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in
connection with the matters to which respective agreements
relate, except for a loss resulting from wilful misfeasance, bad
faith or gross negligence on the part of FCIMCO in the
performance of its obligations or from reckless disregard by it
of its obligations and duties under its agreements or on the
part of ANB-IMC or the Sub-Administrator in the performance of
their respective obligations or from reckless disregard by
either of its obligations and duties under its agreement.

Expenses and Expense Information. All expenses
incurred in the operation of the Trust, Prairie Intermediate
Bond Fund and Prairie Municipal Bond Fund, Inc. are borne by
such company, except to the extent specifically assumed by
FCIMCO. The expenses borne by the Trust, Prairie Intermediate
Bond Fund and Prairie Municipal Bond Fund, Inc. include:
organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Board members, Securities and
Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs of independent pricing
services, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses. In addition,
Class A and Class B are subject to an annual distribution and/or
service fee. Expenses attributable to a particular Fund or
Class are charged against the assets of that Fund or Class,
respectively; other expenses of the Trust are allocated among
the Funds that are series of the Trust on the basis determined
by the Board, including, but not limited to, proportionately in
relation to the net assets of each such Fund.

The Agreement provides that if, in any fiscal year,
the aggregate expenses of a Fund, exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of
the necessary state securities commissions) extraordinary
expenses, but including the advisory fee, exceed the expense
limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the payment to be made to FCIMCO under the
Agreement, or FCIMCO will bear, such excess expense to the
extent required by state law. Such deduction or payment, if
any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.

The aggregate of the fees payable to FCIMCO is not
subject to reduction as the value of a Fund's net assets
increases.

Prairie Intermediate Bond Fund only. As compensation
for FCIMCO's investment advisory services to Prairie
Intermediate Bond Fund, the Fund has agreed to pay FCIMCO an
advisory fee, computed daily and paid monthly, at an annual rate
of .40 of 1% of the value of the Fund's average daily net
assets. For the period from January 17, 1995 (effective date of
the Investment Advisory Agreement) through January 31, 1995, no
advisory fee was paid by the Fund to FCIMCO pursuant to an
undertaking in effect. Prior to January 17, 1995, The First
National Bank of Chicago ("FNBC") provided management services
to the Fund pursuant to a management agreement (the "Prior
Management Agreement"). Under the terms of the Prior Management
Agreement, Prairie Intermediate Bond Fund agreed to pay FNBC a
monthly fee at the annual rate of .60 of 1% of the value of the
Fund's average daily net assets. For the fiscal years ended
January 31, 1993 and 1994 and the period from February 1, 1994
through January 17, 1995, no fees were paid by the Fund to FNBC
pursuant to various undertakings by FNBC.

As compensation for FCIMCO's administrative services
to Prairie Intermediate Bond Fund, the Fund has agreed to pay
FCIMCO an administrative fee, computed daily and paid monthly,
at an annual rate of .15 of 1% of the value of the Fund's
average daily net assets. For the period from January 17, 1995
(effective date of the Administration Agreement) through
January 31, 1995, no administration fee was paid by the Fund to
FCIMCO pursuant to an undertaking in effect. Prior to
January 17, 1995, The Dreyfus Corporation ("Dreyfus") provided
the Fund administrative services pursuant to an administration
agreement between FNBC and Dreyfus. FNBC paid Dreyfus for
Dreyfus' services.

Prairie Municipal Bond Fund, Inc. only. As
compensation for FCIMCO's investment advisory services to
Prairie Municipal Bond Fund, Inc., the Fund has agreed to pay
FCIMCO an advisory fee, computed daily and paid monthly, at an
annual rate of .40 of 1% of the value of the Fund's average
daily net assets. For the period from January 17, 1995
(effective date of the Investment Advisory Agreement) through
February 28, 1995, no advisory fees were paid by the Fund to
FCIMCO pursuant to an undertaking in effect. Prior to
January 17, 1995, FNBC provided advisory services to the Fund
pursuant to an investment advisory agreement (the "Prior
Advisory Agreement"). Under the terms of the Prior Advisory
Agreement, Prairie Municipal Bond Fund, Inc. agreed to pay FNBC
a monthly fee at the annual rate of .40 of 1% of the value of
the Fund's average daily net assets. For the fiscal years ended
February 28/29, 1993 and 1994 and for the period from March 1,
1994 through January 17, 1995, no fees were paid by the Fund to
FNBC pursuant to various undertakings by FNBC.

Under the terms of the Administration Agreement,
Prairie Municipal Bond Fund, Inc. has agreed to pay FCIMCO an
administrative fee, computed daily and paid monthly, at an
annual rate of .15 of 1% of the value of the Fund's average
daily net assets. For the period from January 17, 1995
(effective date of the Administration Agreement) through
February 28, 1995, no administration fee was paid by the Fund to
FCIMCO pursuant to an undertaking in effect. Prior to
January 17, 1995, Dreyfus provided the Fund administrative
services pursuant to an administration agreement (the "Prior
Administration Agreement"). As compensation for Dreyfus'
services to the Fund, the Fund agreed to pay Dreyfus pursuant to
the Prior Administration Agreement a fee, computed daily and
paid monthly, at an annual rate of .20 of 1% of the value of the
Fund's average daily net assets. For the fiscal years ended
February 28/29, 1993 and 1994, no administration fees were paid
by the Fund to Dreyfus pursuant to various undertakings by
Dreyfus. For the period March 1, 1994 through January 17, 1995,
the Fund paid Dreyfus $25,853 pursuant to the Prior Administra-
tion Agreement.

Intermediate Municipal Bond Fund only. As
compensation for FCIMCO's investment advisory services to the
Intermediate Municipal Bond Fund, the Fund has agreed to pay
FCIMCO an advisory fee, computed daily and paid monthly, at an
annual rate of .40 of 1% of the value of the Fund's average
daily net assets. For the period from January 17, 1995
(effective date of the Investment Advisory Agreement) through
February 28, 1995, no advisory fees were paid by the Fund to
FCIMCO pursuant to an undertaking in effect. Prior to
January 17, 1995, FNBC provided advisory services to the
Intermediate Series of First Prairie Municipal Bond Fund, Inc.
(the predecessor fund of the Intermediate Municipal Bond Fund)
pursuant to an investment advisory agreement (the "Prior
Advisory Agreement"). Under the terms of the Prior Advisory
Agreement, the Intermediate Series agreed to pay FNBC a monthly
fee at the annual rate of .40 of 1% of the value of the
Intermediate Series' average daily net assets. For the fiscal
years ended February 28/29, 1993 and 1994 and for the period
from March 1, 1994 through January 17, 1995, no fees were paid
by the Intermediate Series to FNBC pursuant to various
undertakings by FNBC.

Under the terms of the Administration Agreement, the
Intermediate Municipal Bond Fund has agreed to pay FCIMCO an
administrative fee, computed daily and paid monthly, at an
annual rate of .15 of 1% of the value of the Fund's average
daily net assets. For the period from January 17, 1995
(effective date of the Administration Agreement) through
February 28, 1995, no administration fee was paid by the Fund to
FCIMCO pursuant to an undertaking in effect. Prior to
January 17, 1995, Dreyfus provided the Intermediate Series of
First Prairie Municipal Bond Fund, Inc. administrative services
pursuant to an administration agreement (the "Prior
Administration Agreement"). As compensation for Dreyfus'
services to the Intermediate Series, the Intermediate Series
agreed to pay Dreyfus pursuant to the Prior Administration
Agreement a fee, computed daily and paid monthly, at an annual
rate of .20 of 1% of the value of the Intermediate Series'
average daily net assets. For the fiscal years ended February
28/29, 1993 and 1994, no administration fees were paid by the
Intermediate Series to Dreyfus pursuant to various undertakings
by Dreyfus. For the period March 1, 1994 through January 17,
1995, the Intermediate Series paid Dreyfus $46,815 pursuant to
the Prior Administration Agreement.

Managed Assets Income Fund only. As compensation for
FCIMCO's investment advisory services to the Managed Assets
Income Fund, the Fund has agreed to pay FCIMCO an advisory fee,
computed daily and paid monthly, at an annual rate of .65 of 1%
of the value of the Fund's average daily net assets. Prior to
January 17, 1995, FNBC provided advisory services to First
Prairie Diversified Asset Fund (the predecessor fund of the
Managed Assets Income Fund) pursuant to an investment advisory
agreement (the "Prior Advisory Agreement"). Under the terms of
the Prior Advisory Agreement, First Prairie Diversified Asset
Fund agreed to pay FNBC a monthly fee at the annual rate of .65
of 1% of the value of the fund's average daily net assets. For
the fiscal years ended December 31, 1992, 1993 and 1994, no fees
were paid by First Prairie Diversified Asset Fund to FNBC
pursuant to various undertakings by FNBC.

Under the terms of the Administration Agreement, the
Managed Assets Income Fund has agreed to pay FCIMCO an
administrative fee, computed daily and paid monthly, at an
annual rate of .15 of 1% of the value of the Fund's average
daily net assets. Prior to January 17, 1995, Dreyfus provided
First Prairie Diversified Asset Fund administrative services
pursuant to an administration agreement (the "Prior
Administration Agreement"). As compensation for Dreyfus'
services to First Prairie Diversified Asset Fund, the fund
agreed to pay Dreyfus pursuant to the Prior Administration
Agreement a fee, computed daily and paid monthly, at an annual
rate of .30 of 1% of the value of the fund's average daily net
assets. For the fiscal years ended December 31, 1992 and 1993,
no administration fees were paid by First Prairie Diversified
Asset Fund to Dreyfus pursuant to various undertakings by
Dreyfus. For the period January 1, 1994 through December 31,
1994, First Prairie Diversified Asset Fund paid Dreyfus $26,667
pursuant to the Prior Administration Agreement.

Municipal Money Market Fund only. As compensation for
FCIMCO's services to the Municipal Money Market Fund, the Fund
has agreed to pay FCIMCO an investment advisory and
administrative fee, computed daily and paid monthly, at an
annual rate of .40 and .15, respectively, of 1% of the value of
the Fund's average daily net assets. From May 1, 1993 to
January 17, 1995, FNBC provided management services to First
Prairie Municipal Money Market Fund (the predecessor fund of the
Municipal Money Market Fund) pursuant to a management agreement
(the "Prior Agreement") with the fund and engaged Dreyfus to
provide administrative services. Pursuant to the Prior
Agreement, First Prairie Municipal Money Market Fund agreed to
pay FNBC a management fee at the annual rate of .55 of 1% of the
value of the fund's average daily net assets. Prior to April
30, 1993, FNBC provided investment advisory services to First
Prairie Municipal Money Market Fund pursuant to an investment
advisory agreement (the "Prior Advisory Agreement") with the
fund and Dreyfus provided administrative services to the fund
pursuant to an administration agreement (the "Prior
Administration Agreement") with First Prairie Municipal Money
Market Fund. Pursuant to the Prior Advisory Agreement, First
Prairie Municipal Money Market Fund agreed to pay FNBC an
advisory fee at the annual rate of .40 of 1% of the value of the
fund's average daily net assets. Pursuant to the Prior
Administration Agreement, First Prairie Municipal Money Market
Fund agreed to pay Dreyfus an administration fee at the annual
rate of .20 of 1% of the value of the fund's average daily net
assets.

The fees paid to FNBC pursuant to the Prior Advisory
Agreement for the fiscal year ended December 31, 1992 was
$914,834. For the period January 1, 1993 through April 29,
1993, the fee payable to FNBC pursuant to the Prior Advisory
Agreement was $266,582. For the period from April 30, 1993
(effective date of the Prior Agreement) through December 31,
1993 and for the fiscal year ended December 31, 1994, the fees
payable to FNBC were $699,072 and $1,069,636, respectively. For
the fiscal years ended December 31, 1992, 1993 and 1994, the
fees payable to FNBC were reduced pursuant to undertakings in
effect resulting in net fees paid of $895,911 in fiscal 1992,
$647,661 in fiscal 1993 and $485,987 in fiscal 1994.

The fee paid to Dreyfus pursuant to the Prior
Administration Agreement for the fiscal year ended December 31,
1992 was $457,417. For the period January 1, 1993 through April
29, 1993, the fee payable to Dreyfus pursuant to the Prior
Administration Agreement was $133,291.

Money Market Fund only. As compensation for FCIMCO's
services to the Money Market Fund, the Fund has agreed to pay
FCIMCO an investment advisory and administration fee, computed
daily and paid monthly, at an annual rate of .40 and .15,
respectively, of 1% of the value of the Fund's average daily net
assets. From May 1, 1993 to January 17, 1995, FNBC provided
management services to the Money Market Series of First Prairie
Money Market Fund (the predecessor fund of the Money Market
Fund) pursuant to a management agreement (the "Prior Agreement")
with the fund and engaged Dreyfus to provide administrative
services. Pursuant to the Prior Agreement, the Money Market
Series agreed to pay FNBC a fee at the annual rate of .55 of 1%
of the value of the Money Market Series' average daily net
assets. Prior to April 30, 1993, FNBC provided investment
advisory services to the Money Market Series pursuant to an
investment advisory agreement (the "Prior Advisory Agreement")
with the fund and Dreyfus provided administrative services to
the Money Market Series pursuant to an administration agreement
(the "Prior Administration Agreement") with the fund. Pursuant
to the Prior Advisory Agreement, the Money Market Series agreed
to pay FNBC an advisory fee at the annual rate of .40 of 1% of
the value of the Money Market Series' average daily net assets.
Pursuant to the Prior Administration Agreement, the Money Market
Series agreed to pay Dreyfus an administration fee at the annual
rate of .20 of 1% of the value of the Money Market Series'
average daily net assets.

The fees paid to FNBC pursuant to the Prior Advisory
Agreement with respect to the Money Market Series for the fiscal
year ended December 31, 1992 was $1,565,674. For the period
January 1, 1993 through April 29, 1993, the fee payable to FNBC
pursuant to the Prior Advisory Agreement was $345,615. For the
period from April 30, 1993 (effective date of the Prior
Agreement) through December 31, 1993 and for the fiscal year
ended December 31, 1994, the fees payable to FNBC were $649,937
and $859,905, respectively. For the fiscal year ended December
31, 1993, the fee payable to FNBC was reduced by $70,345,
pursuant to an undertaking in effect resulting in net fees paid
of $925,207.

The fee paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Money Market Series
for the fiscal year ended December 31, 1992 was $782,837. For
the period January 1, 1993 through April 29, 1993, the fee
payable to Dreyfus pursuant to the Prior Administration
Agreement was $172,808; however, pursuant to an undertaking in
effect, Dreyfus reduced its fee by $32,272, resulting in a net
fee of $140,536.

Government Money Market Fund only. As compensation
for FCIMCO's services to the Government Money Market Fund, the
Fund has agreed to pay FCIMCO an investment advisory and
administration fee, computed daily and paid monthly, at an
annual rate of .40 and .15, respectively, of 1% of the value of
the Fund's average daily net assets. From May 1, 1993 to
January 17, 1995, FNBC provided management services to the
Government Money Market Series of First Prairie Money Market
Fund (the predecessor fund of the Government Money Market Fund)
pursuant to a management agreement (the "Prior Agreement") with
the fund and engaged Dreyfus to provide administrative services.
Pursuant to the Prior Agreement, the Government Money Market
Series agreed to pay FNBC a fee at the annual rate of .55 of 1%
of the value of the Government Money Market Series' average
daily net assets. Prior to April 30, 1993, FNBC provided
investment advisory services to the Government Money Market
Series pursuant to an investment advisory agreement (the "Prior
Advisory Agreement") with the fund and Dreyfus provided
administrative services to the Government Money Market Series
pursuant to an administration agreement (the "Prior
Administration Agreement") with the fund. Pursuant to the Prior
Advisory Agreement, the Government Money Market Series agreed to
pay FNBC an advisory fee at the annual rate of .40 of 1% of the
value of the Government Money Market Series' average daily net
assets. Pursuant to the Prior Administration Agreement, the
Government Money Market Series agreed to pay Dreyfus an
administration fee at the annual rate of .20 of 1% of the value
of the Government Money Market Series' average daily net assets.

The fees paid to FNBC pursuant to the Prior Advisory
Agreement with respect to the Government Money Market Series for
the fiscal year ended December 31, 1992 was $2,661,832. For the
period January 1, 1993 through April 29, 1993, the fee payable
to FNBC pursuant to the Prior Advisory Agreement was $730,686.
For the period from April 30, 1993 (effective date of the Prior
Agreement) through December 31, 1993 and for the fiscal year
ended December 31, 1994 the fees payable to FNBC were $1,635,057
and $692,452, respectively. For the fiscal years ended
December 31, 1993 and 1994, the fees payable to FNBC were
reduced by $567,879 and $29,785, respectively, pursuant to an
undertaking in effect resulting in net fees paid of $1,797,864
in fiscal 1993 and $662,667 in fiscal 1994.

The fee paid to Dreyfus pursuant to the Prior
Administration Agreement with respect to the Government Money
Market Series for the fiscal year ended December 31, 1992 was
$1,330,916. For the period January 1, 1993 through April 29,
1993, the fee payable to Dreyfus pursuant to the Prior
Administration Agreement was $365,343; however, pursuant to an
undertaking in effect, Dreyfus reduced its fee by $103,746,
resulting in a net fee of $261,597.

PURCHASE OF SHARES

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"How to Buy Shares."

The Distributor. The Distributor serves as each
Fund's distributor pursuant to an agreement which is renewable
annually.

Using Federal Funds. Primary Funds Service Corp., the
Funds' transfer and dividend disbursing agent (the "Transfer
Agent"), or the Fund may attempt to notify the investor upon
receipt of checks drawn on banks that are not members of the
Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means
of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his
order to purchase Fund shares is paid for other than in Federal
Funds, the securities dealer, bank or other financial
institution, acting on behalf of its customer, generally will
complete the conversion into, or itself advance, Federal Funds
on the business day following receipt of the customer order.
The order is effective only when so converted and received by
the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with a sufficient Federal Funds or cash
balance in his brokerage account with a securities dealer, bank
or other financial institution will become effective on the day
that the order, including Federal Funds, is received by the
Transfer Agent.

Sales Loads--Class A. The scale of sales loads
applies to purchases of Class A shares made by any "purchaser,"
which term includes an individual and/or spouse purchasing
securities for his, her or their own account or for the account
of any minor children, or a trustee or other fiduciary
purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other
employee benefit trust created pursuant to a plan qualified
under Section 401 of the Code) although more than one
beneficiary is involved; or a group of accounts established by
or on behalf of the employees of an employer or affiliated
employers pursuant to an employee benefit plan or other program
(including accounts established pursuant to Sections 403(b),
408(k), and 457 of the Code); or an organized group which has
been in existence for more than six months, provided that it is
not organized for the purpose of buying redeemable securities of
a registered investment company and provided that the purchases
are made through a central administration or a single dealer, or
by other means which result in economy of sales effort or
expense.

DISTRIBUTION PLANS AND SHAREHOLDER SERVICES PLANS

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"Distribution Plans and Shareholder Services Plans."

Distribution Plans. Rule 12b-1 (the "Rule") adopted
by the Securities and Exchange Commission under the 1940 Act
provides, among other things, that an investment company may
bear expenses of distributing its shares only pursuant to a plan
adopted in accordance with the Rule. The Board has adopted such
a plan for each of the Trust, Prairie Intermediate Bond Fund and
Prairie Municipal Bond Fund, Inc. with respect to Class B shares
of each Fund (the "Distribution Plan"), pursuant to which the
Fund pays the Distributor for advertising, marketing and
distributing Class B shares of the relevant Fund. The
Distributor may pay one or more banks, securities dealers and
other industry professionals such as investment advisers,
accountants and estate planning firms (collectively, "Service
Agents"), in respect of these services. In some states, banks
or other institutions effecting transactions in Fund shares may
be required to register as dealers pursuant to state law. The
Board believes that there is a reasonable likelihood that the
Distribution Plan will benefit each Fund and the holders of its
Class B shares.

A quarterly report of the amounts expended under each
Distribution Plan, and the purposes for which such expenditures
were incurred, must be made to the Board members for their
review. In addition, the Distribution Plan provides that it may
not be amended to increase materially the cost which holders of
Class B shares of the Fund may bear pursuant to the Distribution
Plan without the approval of the shareholders of such Class and
that other material amendments of the Distribution Plan must be
approved by the Board and by the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund
and have no direct or indirect financial interest in the
operation of the Distribution Plan or in any agreements entered
into in connection with the Distribution Plan, by vote cast in
person at a meeting called for the purpose of considering such
amendments. The Distribution Plan is subject to annual approval
by such vote of the Board members cast in person at a meeting
called for the purpose of voting on the Distribution Plan. The
Distribution Plan may be terminated at any time by vote of a
majority of the Board members who are not "interested persons"
and have no direct or indirect financial interest in the
operation of the Distribution Plan or in any agreements entered
into in connection with the Distribution Plan or by vote of the
holders of a majority of Class B shares of the Fund.

Shareholder Services Plans. The Trust, Prairie
Intermediate Bond Fund and Prairie Municipal Bond Fund, Inc.
have adopted separate Shareholder Services Plans, pursuant to
which each Fund pays the Distributor for the provision of
certain services to the holders of Class A and Class B shares of
such Fund. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of
shareholder accounts. Under each Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of
these services. FCIMCO, FNBC, ANB and their affiliates may act
as Service Agents and receive fees under the Shareholder
Services Plan.

A quarterly report of the amounts expended under the
Shareholder Services Plan, and the purposes for which such
expenditures were incurred, must be made to the Board members
for their review. In addition, the Shareholder Services Plan
provides that it may not be amended without approval of the
Board, and by the Board members who are neither "interested
persons" (as defined in the 1940 Act) of the Fund nor have any
direct or indirect financial interest in the operation of the
Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan, by vote cast in
person at a meeting called for the purpose of considering such
amendments. The Shareholder Services Plan is subject to annual
approval by such vote of the Board members cast in person at a
meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan was so approved on
November 18, 1994. The Shareholder Services Plan is terminable
at any time by vote of a majority of the Board members who are
not "interested persons" and who have no direct or indirect
financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the
Shareholder Services Plan.

Prairie Intermediate Bond Fund only. For the period
January 17, 1995 (effective date of Distribution Plan) through
January 31, 1995, no amounts were charged the Fund with respect
to Class B pursuant to the Distribution Plan since no Class B
shares of the Fund were then outstanding. Under a prior
distribution plan adopted pursuant to Rule 12b-1 (the "Prior
Distribution Plan"), for the period February 8, 1994 (effective
date of Prior Distribution Plan) through December 2, 1994
(termination date of Prior Distribution Plan), the Fund paid $8
with respect to Class B, all of which was retained by the Fund's
former distributors.

For the period January 17, 1995 (effective date of
Shareholder Services Plan) through January 31, 1995, the Fund
paid $21 with respect to Class A pursuant to the Shareholder
Services Plan, all of which was retained by the Distributor.

Prairie Municipal Bond Fund, Inc. only. For the
period January 17, 1995 (effective date of Distribution Plan)
through February 28, 1995, the Fund was not charged with respect
to Class B pursuant to the Distribution Plan. Under a prior
distribution plan adopted pursuant to Rule 12b-1 (the "Prior
Distribution Plan"), for the period March 1, 1994 through
December 2, 1994 (termination date of Prior Distribution Plan),
the Fund paid $183 with respect to Class B, all of which was
retained by the Fund's former distributors.

For the period January 17, 1995 (effective date of
Shareholder Services Plan) through February 28, 1995, the Fund
paid $2,051 with respect to Class A pursuant to the Shareholder
Services Plan, all of which was retained by the Distributor.
The Fund was not charged with respect to Class B pursuant to the
Shareholder Services Plan.

Intermediate Municipal Bond Fund only. For the period
January 17, 1995 (effective date of Distribution Plan) through
February 28, 1995, the Fund paid $3 with respect to Class B
pursuant to the Distribution Plan, all of which was retained by
the Distributor. Under a prior distribution plan adopted
pursuant to Rule 12b-1 (the "Prior Distribution Plan"), for the
period March 1, 1994 through December 2, 1994 (termination date
of Prior Distribution Plan), the Intermediate Series of First
Prairie Municipal Bond Fund, Inc. (the predecessor fund of the
Intermediate Municipal Bond Fund) paid $172 with respect to
Class B, all of which was retained by the fund's former
distributors.

For the period January 17, 1995 (effective date of
Shareholder Services Plan) through February 28, 1995, the Fund
paid $3,684 with respect to Class A and $1 with respect to Class
B pursuant to the Shareholder Services Plan, all of which was
retained by the Distributor.

Managed Assets Income Fund only. Under a prior
distribution plan adopted pursuant to Rule 12b-1 (the "Prior
Distribution Plan"), for the period February 8, 1994 (effective
date of Prior Distribution Plan) through December 2, 1994
(termination date of Prior Distribution Plan), First Prairie
Diversified Asset Fund (the predecessor fund of the Managed
Assets Income Fund) paid $4,752 with respect to Class B, all of
which was retained by the fund's former distributors.

Municipal Money Market Fund only. Under a prior
distribution plan adopted pursuant to Rule 12b-1 (the "Prior
Distribution Plan"), during the fiscal year ended December 31,
1994, an aggregate of $551,662 was charged to First Prairie
Municipal Money Market Fund (the predecessor fund of the
Municipal Money Market Fund) under the Prior Distribution Plan,
of which $504,645 was paid to FNBC and its affiliates, $3,997
was paid for preparing, printing and distributing prospectuses
and operating the Prior Distribution Plan, and $43,020 was
charged for advertising, marketing and servicing the fund's
shares.

Money Market Fund only. Under a prior distribution
plan adopted pursuant to Rule 12b-1 (the "Prior Distribution
Plan"), during the fiscal year ended December 31, 1994, $583,166
was charged to the Money Market Series of First Prairie Money
Market Fund (the predecessor fund of the Money Market Fund) with
respect to Class A under the Prior Distribution Plan, of which
$403,119 was paid to FNBC and its affiliates, $13,461 was paid
for preparing, printing and distributing prospectuses and
operating the Prior Distribution Plan, and $166,586 was charged
for advertising, marketing and servicing the Money Market
Series' Class A shares.

Government Money Market Fund only. Under a prior
distribution plan adopted pursuant to Rule 12b-1 (the "Prior
Distribution Plan"), during the fiscal year ended December 31,
1994, $334,170 was charged to the Government Money Market Series
of First Prairie Money Market Fund (the predecessor fund of the
Government Money Market Fund) under the Prior Distribution Plan,
of which $317,581 was paid to FNBC and its affiliates, $345 was
paid for preparing, printing and distributing prospectuses and
operating the Prior Distribution Plan, and $16,244 was paid for
advertising, marketing and servicing the Government Money Market
Series' shares.

REDEMPTION OF SHARES

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"How to Redeem Fund Shares."

Redemption Commitment. Each of the Trust, Prairie
Intermediate Bond Fund and Prairie Municipal Bond Fund, Inc. has
committed itself to pay in cash all redemption requests by any
shareholder of record of the Fund, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of
such Fund's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests for
redemption in excess of such amount, the Board reserves the
right to make payments in whole or in part in securities or
other assets in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's
securities are valued. If the recipient sold such securities,
brokerage charges would be incurred.

Suspension of Redemptions. The right of redemption
may be suspended or the date of payment postponed (a) during any
period when the New York Stock Exchange is closed (other than
customary weekend and holiday closing), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an
emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and
Exchange Commission by order may permit to protect the Fund's
shareholders.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"How to Buy Shares."

Applicable to each Fund, other than the Money Market
Funds--Equity Securities and covered call options written by a
Fund are valued at the last sale price on the securities
exchange or national securities market on which such securities
primarily are traded. Equity Securities not listed on an
exchange or national securities market, or securities in which
there were no transactions, are valued at the most recent bid
prices. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as
determined in good faith by the Board.

Fixed-Income Securities are valued each business day
using available market quotations or at fair value as determined
by one or more independent pricing services (collectively, the
"Service") approved by the Board. The Service may use available
market quotations, employ electronic data processing techniques
and/or a matrix system to determine valuations. The Service's
procedures are reviewed by the Fund's officers under the general
supervision of the Board.

Municipal Obligations are carried at fair value as
determined by the Service, based on methods which include
consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications as to
values from dealers; and general market conditions. The Service
also may employ electronic data processing techniques and/or a
matrix system to determine valuations. When, in the judgment of
the Service, quoted bid prices for investments are readily
available and are representative of the bid side of the market,
these investments are valued at the mean between the quoted bid
prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service based
upon its evaluation of the market for such securities).

Short-term investments are carried at amortized cost,
which approximates value.

Restricted securities, as well as securities or other
assets for which market quotations are not readily available, or
are not valued by a pricing service approved by the Board, are
valued at fair value as determined in good faith by the Board.
The Board will review the method of valuation on a current
basis. In making its good faith valuation of restricted
securities, the Board generally will take the following factors
into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for
which a public market exists usually will be valued at market
value less the same percentage discount at which purchased.
This discount will be revised periodically by the Board if its
members believe that the discount no longer reflects the value
of the restricted securities. Restricted securities not of the
same class as securities for which a public market exists
usually will be valued initially at cost. Any subsequent
adjustment from cost will be based upon considerations deemed
relevant by the Board.

Any assets or liabilities initially expressed in terms
of foreign currency will be translated into dollars at the
midpoint of the New York interbank market spot exchange rate as
quoted on the day of such translation by the Federal Reserve
Bank of New York or if no such rate is quoted on such date, at
the exchange rate previously quoted by the Federal Reserve Bank
of New York or at such other quoted market exchange rate as may
be determined to be appropriate by the Investment Adviser.
Forward currency contracts will be valued at the current cost of
offsetting the contract. Because of the need to obtain prices
as of the close of trading on various exchanges throughout the
world, the calculation of net asset value for the International
Equity and International Bond Funds does not take place
contemporaneously with the determination of prices of such
securities. In addition, portfolio securities held by such
Funds may be traded actively in securities markets which are
open for trading on days when the Fund will not be determining
its net asset value. Accordingly, there may be occasions when
these Funds will not calculate it net asset value but when the
value of the Fund's portfolio securities will be affected by
such trading activity.

Expenses and fees of a Fund, including the advisory
fee, are accrued daily and taken into account for the purpose of
determining the net asset value of that Fund's shares.

Money Market Funds. The valuation of each Money
Market Fund's investment securities is based upon their
amortized cost which does not take into account unrealized
capital gains or losses. This involves valuing an instrument at
its cost and thereafter assuming 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. While this method provides certainty in valuation,
it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument.

The Board has established procedures, as a particular
responsibility within the overall duty of care owed to the Money
Market Fund's investors, reasonably designed to stabilize the
Money Market Fund's price per share as computed for purposes of
purchases and redemptions at $1.00. Such procedures include
review of each Money Market Fund's portfolio holdings by the
Board, at such intervals as it deems appropriate, to determine
whether the Money Market Fund's net asset value calculated by
using available market quotations or market equivalents deviates
from $1.00 per share based on amortized cost. In such review of
the portfolio of the Money Market Fund and U.S. Government Money
Market Fund, investments for which market quotations are readily
available will be valued at the most recent bid price or yield
equivalent for such securities or for securities of comparable
maturity, quality and type, as obtained from one or more of the
major market makers for the securities to be valued. Other
investments and assets of these Money Market Funds will be
valued at fair value as determined in good faith by the Board.
Market quotations and market equivalents used in such review of
the Municipal Money Market Fund are obtained from an independent
pricing service (the "Service") approved by the Board. The
Service will value the Municipal Money Market Fund's investments
based on methods which include consideration of: yields or
prices of municipal obligations of comparable quality, coupon,
maturity and type; indications of values from dealers; and
general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to
determine valuations.

The extent of any deviation between a Money Market
Fund's net asset value based upon available market quotations or
market equivalents and $1.00 per share based on amortized cost
will be examined by the Board. If such deviation exceeds 1/2 of
1%, the Board will consider what actions, if any, will be
initiated. In the event the Board determines that a deviation
exists which may result in material dilution or other unfair re-
sults to investors or existing shareholders, it has agreed to
take such corrective action as it regards as necessary and ap-
propriate, including: selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding dividends or paying dis-
tributions from capital or capital gains; redeeming shares in
kind; or establishing a net asset value per share by using
available market quotations or market equivalents.

New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

PORTFOLIO TRANSACTIONS

Transactions for a Fund are allocated to various
dealers by the Fund's investment personnel in their best
judgment. The primary consideration is prompt and effective
execution of orders at the most favorable price. Subject to
that primary consideration, dealers may be selected to act on an
agency basis for research, statistical or other services to
enable the Investment Adviser to supplement its own research and
analysis with the views and information of other securities
firms.

Research services furnished by brokers through which
the Funds effect securities transactions may be used by the
Investment Adviser in advising other funds or accounts it
advises and, conversely, research services furnished to the
Investment Adviser by brokers in connection with other funds or
accounts the Investment Adviser advises may be used by the
Investment Adviser in advising the Funds. Although it is not
possible to place a dollar value on these services, it is the
opinion of the Investment Adviser that the receipt and study of
such services should not reduce the overall expenses of its
research department.

Brokers also are selected because of their ability to
handle special executions such as are involved in large block
trades or broad distributions, provided the primary
consideration is met. Large block trades may, in certain cases,
result from two or more clients the Investment Adviser might
advise being engaged simultaneously in the purchase or sale of
the same security.

When transactions are executed in the over-the-counter
market, the Investment Adviser will deal with the primary market
makers unless a more favorable price or execution otherwise is
obtainable.

Portfolio turnover may vary from year to year, as well
as within a year. Higher turnover rates are likely to result in
comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by the
Investment Adviser based upon its knowledge of available
information as to the general level of commissions paid by other
institutional investors for comparable services.

Under normal market conditions, the portfolio turnover
rate of each Fund, other than the Money Market Funds, generally
will not exceed 100%.

Purchases and sales of Fixed-Income Securities and
Money Market Instruments usually are principal transactions.
These portfolio securities ordinarily are purchased directly
from the issuer or from an underwriter or market maker. Usually
no brokerage commissions are paid by the Fund for such purchases
and sales. The prices paid to the underwriters of newly-issued
securities usually include a concession paid by the issuer to
the underwriter, and purchases of securities from market makers
may include the spread between the bid and asked price.

Managed Assets Income Fund only. For its portfolio
securities transactions during the fiscal years ended
December 31, 1992, 1993 and 1994, First Prairie Diversified
Asset Fund (the predecessor fund of the Managed Assets Income
Fund) paid total brokerage commissions of $29,818, $29,826 and
$47,110, respectively, none of which was paid to the fund's
former distributors. There were no spreads or concessions on
principal transactions in fiscal 1992, 1993 and 1994.

DIVIDENDS, DISTRIBUTION AND TAXES

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"Dividends, Distributions and Taxes."

Each Fund intends to qualify as a "regulated
investment company" under the Code, so long as such
qualification is in the best interests of its shareholders. To
qualify as a regulated investment company, a Fund must pay out
to its shareholders at least 90% of its net income (consisting
of net investment income from tax exempt obligations and net
short-term capital gain), must derive less than 30% of its
annual gross income from gain on the sale of securities held for
less than three months, and must meet certain asset
diversification and other requirements. Accordingly, the Fund
may be restricted in the selling of securities held for less
than three months, and in the utilization of certain of the
investment techniques described in the Prospectus. The Code,
however, allows the Fund to net certain offsetting positions
making it easier for the Fund to satisfy the 30% test.
Qualification as a regulated investment company relieves the
Fund from any liability for Federal income taxes to the extent
its earnings are distributed in accordance with the applicable
provisions of the Code. The term "regulated investment company"
does not imply the supervision of management or investment
practices or policies by any government agency.

Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the
aggregate net asset value of his shares below the cost of his
investment. Such a distribution would be a return on investment
in an economic sense although taxable as stated in "Dividends,
Distributions and Taxes" in the Prospectus. In addition, the
Code provides that if a shareholder holds shares for six months
or less and has received a capital gain dividend with respect to
such shares, any loss incurred on the sale of such shares will
be treated as a long-term capital loss to the extent of the
capital gain dividend received.

Except for dividends from taxable investments, the
Fund anticipates that substantially all dividends paid by a
Municipal Fund will not be subject to Federal income tax.
Dividends and distributions paid by a Municipal Fund may be
subject to certain state and local taxes. Although all or a
substantial portion of the dividends paid by a Municipal Fund
may be excluded by shareholders of the Fund from their gross
income for Federal income tax purposes, each Municipal Fund may
purchase specified private activity bonds, the interest from
which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted
current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the
extent to which a shareholder's Social Security benefits are
taxable. If a Municipal Fund purchases such securities, the
portion of its dividends related thereto will not necessarily be
tax exempt to shareholders subject to the alternative minimum
tax and/or tax on Social Security benefits and may cause such
shareholders to be subject to such taxes.

Dividends paid by a Fund to qualified Retirement Plans
or certain non-qualified deferred compensation plans ordinarily
will not be subject to taxation until the proceeds are
distributed from the Retirement Plan. The Funds will not report
dividends paid by a Fund to such Plans to the IRS. Generally,
distributions from such Retirement Plans, except those
representing returns of non-deductible contributions thereto,
will be taxable as ordinary income and, if made prior to the
time the participant reaches age 59-1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion
of the distribution. If the distribution from such a Retirement
Plan (other than certain governmental or church plans) for any
taxable year following the year in which the participant reaches
age 70-1/2 is less than the "minimum required distribution" for
that taxable year, an excise tax equal to 50% of the deficiency
may be imposed by the IRS. The administrator, trustee or
custodian of such a Retirement Plan will be responsible for
reporting distributions from such Plans to the IRS.
Participants in qualified Retirement Plans will receive a
disclosure statement describing the consequences of a
distribution from such a Plan from the administrator, trustee or
custodian of the Plan prior to receiving the distribution.
Moreover, certain contributions to a qualified Retirement Plan
in excess of the amounts permitted by law may be subject to an
excise tax.

Taxable dividends derived from net investment income
and distributions from net realized short-term securities gains
paid by a Fund to a foreign investor generally are subject to
U.S. nonresident withholding taxes at the rate of 30%, unless
the foreign investor claims the benefits of a lower rate
specified in a tax treaty. Distributions from net realized
long-term securities gains paid by a Fund to a foreign investor,
as well as the proceeds of any redemptions from a foreign
investor's account, regardless of the extent to which gain or
loss may be realized, will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to
backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.

Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gains and losses.
However, a portion of the gain or loss realized from the
disposition of non-U.S. dollar denominated securities (including
debt instruments, certain financial futures and options, and
certain preferred stock) may be treated as ordinary income or
loss under Section 988 of the Code.

Under Section 1256 of the Code, gain or loss realized
by a Fund from certain financial futures and options
transactions (other than those taxed under Section 988 of the
Code) will be treated as 60% long-term capital gain or loss and
40% short-term capital gain or loss. Gain or loss will arise
upon the exercise or lapse of such futures and options as well
as from closing transactions. In addition, any such futures or
options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value,
resulting in additional gain or loss to the Fund characterized
in the manner described above.

Offsetting positions held by a Fund involving certain
contracts or options may constitute "straddles." "Straddles" are
defined to include "offsetting positions" in actively traded
personal property. The tax treatment of "straddles" is governed
by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Sections
1256 and 988 of the Code. As such, all or a portion of any
short-term or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income. If the
Fund were treated as entering into "straddles" by reason of its
engaging in certain forward contracts or options transactions,
such "straddles" would be characterized as "mixed straddles" if
the forward contracts or options transactions comprising a part
of such "straddles" were governed by Section 1256 of the Code.
A Fund may make one or more elections with respect to "mixed
straddles." Depending on which election is made, if any, the
results to the Fund may differ. If no election is made to the
extent the "straddle" and conversion transactions rules apply to
positions established by the Fund, losses realized by the Fund
will be deferred to the extent of unrealized gain in the
offsetting position. Moreover, as a result of the "straddle"
rules, short-term capital loss on "straddle" positions may be
recharacterized as long-term capital loss, and long-term capital
gains may be treated as short-term capital gains or ordinary
income.

Investment by a Fund in securities issued or acquired
at a discount, or providing for deferred interest or for payment
of interest in the form of additional obligations could under
special tax rules affect the amount, timing and character of
distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the
Fund could be required to accrue a portion of the discount (or
deemed discount) at which the securities were issued and to
distribute such income in order to maintain its qualification as
a regulated investment company. In such case, the Fund may have
to dispose of securities which it might otherwise have continued
to hold in order to generate cash to satisfy these distribution
requirements.

If a Fund invests in an entity that is classified as a
"passive foreign investment company" ("PFIC") for federal income
tax purposes, the operation of certain provisions of the Code
applying to PFICs could result in the imposition of certain
federal income taxes on the Fund. In addition, gain realized
from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.

YIELD AND PERFORMANCE INFORMATION

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"Performance Information."

Special Opportunities, Growth and International Equity
Funds. Average annual total return is calculated by determining
the ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period
(assuming the reinvestment of dividends and distributions),
dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in
the period) and subtracting 1 from the result. A Class's
average annual total return figures calculated in accordance
with such formula assume that in the case of Class A the maximum
sales load has been deducted from the hypothetical initial
investment at the time of purchase or in the case of Class B the
maximum applicable contingent deferred sales charge ("CDSC") has
been paid upon redemption at the end of the period.

Total return is calculated by subtracting the amount
of the Fund's maximum offering price per share in the case of
Class A or the net asset value per share in the case of Class B
or Class I at the beginning of a stated period from the net
asset value per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during
the period and, in the case of Class B, any applicable CDSC, and
dividing the result by the maximum offering price per share in
the case of Class A or the net asset value per share in the case
of Class B or Class I at the beginning of the period. Total
return also may be calculated based on the net asset value per
share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for
Class A shares or without giving effect to any applicable CDSC
at the end of the period for Class B shares. In such cases, the
calculation would not reflect the deduction of the sales load
with respect to Class A shares or any applicable CDSC with
respect to Class B shares which, if reflected, would reduce the
performance quoted.

The total return for each of these Funds for the
period from inception of the Fund through April 30, 1995 for
each Class was as follows:

Class A Class B Class I
Based on Maximum Based on Net Based on Net Based on
Name of Fund Offering Price Asset Value Asset Value Maximum CDSC
<S> <C> <C> <C> <C>
Special
Opportunities(1) 0.24% 4.75% 4.50% -0.72% 4.70%

Growth(2) 2.90% 7.53% 7.38% 2.01% 7.55%

International
Equity(3) 2.29% 6.89% 6.73% 1.39% 6.91%

</TABLE>
_____________________

(1) For the period January 27, 1995 (commencement of operations)
through April 30, 1995.

(2) For the period January 27, 1995 (commencement of operations)
through April 30, 1995.

(3) For the period March 3, 1995 (commencement of operations)
through April 30, 1995.

Asset Allocation, Equity Income, Bond and Municipal
Bond Funds. Current yield is computed pursuant to a formula
which operates as follows: The amount of the Fund's expenses
accrued for the 30-day period (net of reimbursements) is
subtracted from the amount of the dividends and interest earned
by the Fund during the period. That result is then divided by
the product of: (a) the average daily number of shares
outstanding during the period that were entitled to receive
dividends, and (b) the net asset value per share on the last day
of the period less any undistributed earned income per share
reasonably expected to be declared as a dividend shortly
thereafter. The quotient is then added to 1, and that sum is
raised to the 6th power, after which 1 is subtracted. The
current yield is then arrived at by multiplying the result by 2.

With respect to the Municipal Funds, tax equivalent
yield is computed by dividing that portion of the current yield
(calculated as described above) which is tax-exempt by 1 minus a
stated tax rate and adding the quotient to that portion, if any,
of the yield of the Fund that is not tax-exempt. The tax
equivalent yields noted below represent the application of the
highest Federal marginal personal income tax rate presently in
effect. The tax equivalent yield figures, however, do not
reflect the potential effect of any state or local (including,
but not limited to, county, district or city) taxes, including
applicable surcharges. In addition, there may be pending
legislation which could affect such stated tax rate or yields.
Each investor should consult its tax adviser, and consider its
own factual circumstances and applicable tax laws, in order to
ascertain the relevant tax equivalent yield.

The current yield for each of these Funds (except the
Managed Assets Fund which commenced operations on April 3, 1995)
for the 30-day period ended April 30, 1995, except where noted,
for each Class outstanding was as follows:

Class A Class B Class I

Net of Net of Net of
Current Absorbed Current Absorbed Current Absorbed
Name of Fund Yield Expenses Yield Expenses Yield Expenses
<S> <C> <C> <C> <C> <C> <C>
Managed Assets
Income(1) 5.22% 4.78% ____% ___% N/A N/A

Equity Income 3.58% 3.46% 2.98% 2.86% 4.00% 3.88%

Intermediate
Bond(2) ____% ____% ____% ____% ____% ____%

Bond 5.65% 5.42% 5.13% 4.93% 6.16% 5.94%

International Bond ____% ____% ____% ____% ____% ____%

Intermediate
Municipal Bond(3) 4.46% 4.01% 3.70% 3.25% 4.39% 3.94%

Municipal Bond(3) 4.88% 3.73% ____% ____% 5.04% 3.89%

</TABLE>
___________________________

(1) For the 30-day period ended December 31, 1994.

(2) For the 30-day period ended January 30, 1995.

(3) For the 30-day period ended February 28, 1995.

Based upon a 1995 Federal income tax rate of 39.6%,
the tax equivalent yield for the Municipal Funds for the 30-day
period ended February 28, 1995 for each Class was as follows:

Class A Class B Class I
Tax Net of Tax Net of Tax Net of
Equivalent Absorbed Equivalent Absorbed Equivalent Absorbed
Name of Fund Yield Expenses Yield Expenses Yield Expenses
<S> <C> <C> <C> <C> <C> <C>
Intermediate
Municipal Bond 7.38% 6.64% 6.13% 5.38% 7.27% 6.52%

Municipal Bond 8.08% 6.18% ____% ____% 8.34% 6.44%

</TABLE>

Average annual total return and total return is
calculated as described above.

The average annual total return for the Funds and
periods indicated for each Class outstanding was as follows:

Class A Class B Class I
Name of Fund 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Managed Assets
Income(1) -6.39% 7.40% 4.51%(2) ____%(3) N/A N/A N/A N/A N/A

Intermediate
Bond(4) -3.43% 0.73%(5) N/A ____%(6) N/A N/A -0.48% 2.18%(5) N/A

Intermediate
Municipal Bond(7) -1.41% 6.81% 7.13%(8) 2.30% ____%(9) N/A 2.37%(10) N/A N/A

Municipal Bond(8) -0.09% 7.59% 7.74%(8) ____% ____%(9) N/A 2.69%(11) N/A N/A

</TABLE>
___________________________

(1) For the period ended December 31, 1994.

(2) For the period January 23, 1986 through December 31,
1994.

(3) For the period February 8, 1994 through December 31,
1994.

(4) For the period ended January 31, 1995.

(5) For the period March 5, 1993 through January 31, 1995.

(6) For the period February 8, 1994 through January 31,
1995.

(7) For the period ended February 28, 1995.

(8) For the period March 1, 1988 through February 28, 1995.

(9) For the period February 8, 1994 through February 28,
1995.

(10) For the period January 30, 1995 through February 28,
1995.

(11) For the period ended February 1, 1995 through February
28, 1995.

The total return for each of these Funds for the
period from inception of the Fund through April 30, 1995, except
where noted, for each Class was as follows:

Class A Class B Class I
Based on Maximum Based on Net Based on Net Based on
Name of Fund Offering Price Asset Value Asset Value Maximum CDSC
<S> <C> <C> <C> <C> <C>
Managed Assets(1) -3.82% 0.70% 0.70% -4.34% 0.70%

Managed Assets
Income(2) 143.59% 155.04% 4.18% -1.03% 4.46%

Equity Income(3) 2.44% 7.05% 6.81% 1.47% 7.09%

Intermediate
Bond(4) 5.53% 8.81% ____% ____% 8.83%

Bond(5) -0.33% 4.15% 3.99% -1.21% 4.20%

International
Bond(3) 9.26% 14.18% 13.97% 8.27% 14.25%

Intermediate
Municipal Bond(6) 64.31% 68.32% 3.55% 0.45% 3.88%

Municipal Bond(6) 70.91% 78.93% -0.10% -5.09% 4.11%

</TABLE>

_____________________
(1) For the period April 3, 1995 (commencement of operations)
through April 30, 1995.

(2) For the period January 23, 1986 (commencement of operations)
through December 31, 1994.

(3) For the period January 30, 1995 (commencement of operations)
through April 30, 1995.

(4) For the period March 5, 1993 (commencement of operations)
through January 31, 1995.

(5) For the period February 16, 1995 (commencement of
operations) through April 30, 1995.

(6) For the period March 1, 1988 (commencement of operations)
through February 28, 1995.

For purposes of advertising, calculations of average
annual total return and total return for each of the Managed
Assets Income Fund and Intermediate Municipal bond Fund will
take into account the performance of its corresponding
predecessor fund--namely First Prairie Diversified Asset Fund
and the Intermediate Series of First Prairie Municipal bond
Fund, Inc.--the assets and liabilities of which were transferred
to the relevant Fund in exchange for Class A shares of such Fund
on March 3, 1995 and January 31, 1995, respectively. In
addition, performance figures for the Intermediate Municipal
Bond Fund for periods prior to July 1, 1992 reflect the
Intermediate Series' management policy at the time to invest in
municipal obligations rated A or better by Moody's or S&P.

Performance figures for Prairie Municipal Bond Fund,
Inc. (the Municipal Bond Fund) reflect the fact that for the
period September 12, 1989 through January 17, 1995 the Fund's
then existing management policies required it to invest at least
65% of the value of its total assets in municipal obligations
insured as to timely payment of principal and interest by
recognized insurers of municipal obligations. In addition,
prior to September 12, 1989, the Municipal Bond Fund's
management policies required the Fund to invest in municipal
obligations rated A or better by Moody's or S&P.

Performance figures for Prairie Intermediate Bond Fund
(the Intermediate Bond Fund) for periods prior to January 17,
1995 reflect the Intermediate Bond Fund's fundamental policy at
the time to invest at least 65% of the value of its total assets
in U.S. Government securities, which included U.S. Treasury
securities, agency securities and mortgage-related securities
issued or guaranteed by U.S. Government agencies or
instrumentalities.

Money Market Funds. Yield will be computed in
accordance with a standardized method which involves determining
the net change in the value of a hypothetical pre-existing Fund
account having a balance of one share at the beginning of a
seven calendar day period for which yield is to be quoted,
dividing the net change by the value of the account at the
beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period
return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends
declared on the original share and any such additional shares
and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Fund's
average account size, but does not include realized gains and
losses or unrealized appreciation and depreciation. Effective
annualized yield is computed by adding 1 to the base period
return (calculated as described above), raising that sum to a
power equal to 365 divided by 7, and subtracting 1 from the
result.

For the seven-day period ended December 31, 1994, each
Money Market Fund's yield, effective yield and, for the
Municipal Money Market Fund only, tax equivalent yield were as
follows:

Tax
Effective Equivalent
Name of Fund Yield Yield Yield

U.S. Government Money Market 4.61% 4.72% N/A

Money Market 4.53% 4.63% N/A

Municipal Money Market 3.70% 3.77% 6.13%

The yield figures noted above for each of the
Government Money Market Fund, Money Market Fund and Municipal
Money Market Fund are for such Fund's corresponding predecessor
fund--namely, the Government Money Market Series of First
Prairie Money Market Fund, the Money Market Series of First
Prairie Municipal Money Market Fund, respectively--the assets
and liabilities of which were transferred to the relevant Fund
in exchange for shares of such Fund on May 20, 1995.

Yields will fluctuate and are not necessarily
representative of future results. Investors should remember
that yield is a function of the type and quality of the
instruments held, their maturity and operating expenses. An
investor's principal in a Money Market Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the
manner in which the Money Market Fund's price per share is
determined.

INFORMATION ABOUT THE FUNDS

The following information supplements and should be
read in conjunction with the section in the Prospectus entitled
"General Information."

Each Fund share has one vote and, when issued and paid
for in accordance with the terms of the offering, is fully paid
and non-assessable. Shares have no preemptive or subscription
rights and are freely transferable.

For certain trust and investment agency account
clients of FNBC whose assets are invested in common trust funds,
the Trust will be used as a pooled investment alternative for
such investments. Beginning in January 1995, FNBC commenced
using the Funds as an investment vehicle in place of common
trust funds for FNBC's Private Banking and Trust clients.
FNBC's decision to replace the common trust funds is based on
its belief that mutual funds provide, among other benefits,
greater flexibility and more investment opportunities for its
clients.

Certain of the Funds have been designed with similar
investment objectives and management policies and will invest in
many of the securities as the common trust funds which they are
intended to replace. The name of each common trust fund to be
replaced initially and its corresponding Fund are as follows:

Common Trust Fund Corresponding Fund

Personal Trust Equity Fund Equity Income Fund

Personal Trust Growth Equity Fund
and
Personal Trust Endowment Equity Fund Growth Fund

Personal Trust Special Equity Fund Special Opportunities
Fund

Personal Trust International Equity International Equity
Fund Fund

Personal Trust Taxable Bond Fund
and
Personal Trust Endowment Bond Fund Bond Fund

Personal Trust Intermediate Taxable
Bond Fund
and
Personal Trust Fixed Income
Fund (Lake Shore Funds) Intermediate Bond Fund

Personal Trust Tax Exempt Bond Fund Municipal Bond Fund

Personal Trust Intermediate Tax
Exempt Bond Fund
and
Personal Trust Municipal Bond Fund Intermediate Municipal
(Lake Shore Fund) Bond Fund

Personal Trust International Bond
Fund International Bond Fund

________________________

* Organized as Prairie Intermediate Bond Fund. This Fund is
not a series of the Trust.

** Organized as Praririe Muncipal Bond Fund, Inc. This Fund
is not a series of the Trust.

Each Fund will send annual and semi-annual financial
statements to all its shareholders.

COUNSEL AND INDEPENDENT AUDITORS

Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2594, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Fund's Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.

<PAGE>

APPENDIX

Description of certain ratings assigned by Standard &
Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff &
Phelps Credit Rating Co. ("Duff"), IBCA Inc. and IBCA Limited
("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):

S&P

Bond Ratings

AAA

Bonds rated AAA have the highest rating assigned by
S&P. Capacity to pay interest and repay principal is extremely
strong.

Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from the highest rated
issues only in small degree.

Bonds rated A have a strong capacity to pay interest
and repay principal although they are somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.

BBB

Bonds rated BBB are regarded as having an adequate
capacity to pay interest and repay principal. Whereas they
normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated
categories.

BB, B, CCC, CC, C

Debt rated BB, B, CCC, CC and C is regarded as having
predominantly speculative characteristics with respect to
capacity to pay interest and repay principal. BB indicates the
least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

Debt rated BB has less near-term vulnerability to
default than other speculative grade debt. However, it faces
major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payment.

Debt rated B has a greater vulnerability to default but
presently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions would likely impair capacity or willingness to pay
interest and repay principal.

CCC

Debt rated CCC has a current identifiable vulnerability
to default, and is dependent upon favorable business, financial
and economic conditions to meet timely payments of principal.
In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay
interest and repay principal.

The rating CC is typically applied to debt subordinated
to senior debt which is assigned an actual or implied CCC
rating.

The rating C is typically applied to debt subordinated
to senior debt which is assigned an actual or implied CCC- debt
rating.

Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.

Plus (+) or minus (-): The ratings from AA to CCC may
be modified by the addition of a plus or minus sign to show
relative standing within the major ratings categories.

Commercial Paper Rating

The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high
as for issues designated A-1.

Moody's

Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.

Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what generally are known as high grade bonds. They are
rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.

Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the
future.

Baa

Bonds which are rated Baa are considered as medium
grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.

Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate, and therefore not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

Caa

Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Caa

Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Bonds which are rated Ca present obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

Bonds which are rated C are the lowest rated class of
bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2 and 3 to
show relative standing within the major rating categories,
except in the Aaa category and in categories below B. The
modifier 1 indicates a ranking for the security in the higher
end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.

Commercial Paper Rating

The rating Prime-1 (P-1) is the highest commercial
paper rating assigned by Moody's. Issuers of P-1 paper must
have a superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.

Issuers (or relating supporting institutions) rated
Prime-2 (P-2) have a strong capacity for repayment of short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.

Fitch

Bond Ratings

The ratings represent Fitch's assessment of the
issuer's ability to meet the obligations of a specific debt
issue or class of debt. The ratings take into consideration
special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and
operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect
the issuer's future financial strength and credit quality.

AAA

Bonds rated AAA are considered to be investment grade
and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.

Bonds rated AA are considered to be investment grade
and of very high credit quality. The obligor's ability to pay
interest and repay principal is very strong, although not quite
as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.

Bonds rated A are considered to be investment grade and
of high credit quality. The obligor's ability to pay interest
and repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB

Bonds rated BBB are considered to be investment grade
and of satisfactory credit quality. The obligor's ability to
pay interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.

Bonds rated BB are considered speculative. The
obligor's ability to pay interest and repay principal may be
affected over time by adverse economic changes. However,
business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service
requirements.

Bonds rated B are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC

Bonds rated CCC have certain identifiable
characteristics, which, if not remedied, may lead to default.
The ability to meet obligations requires an advantageous
business and economic environment.

Bonds rated CC are minimally protected. Default
payment of interest and/or principal seems probable over time.

Bonds rated C are in imminent default in payment of
interest or principal.

DDD, DD and D

Bonds rated DDD, DD and D are in actual or imminent
default of interest and/or principal payments. Such bonds are
extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the
obligor. DDD represents the highest potential for recovery on
these bonds and D represents the lowest potential for recovery.

Plus (+) and minus (-) signs are used with a rating
symbol to indicate the relative position of a credit within the
rating category. Plus and minus signs, however, are not used in
the AAA category covering 12-36 months or the DDD, DD or D
categories.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations
that are payable on demand or have original maturities of up to
three years, including commercial paper, certificates of
deposit, medium-term notes, and municipal and investment notes.

Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.

F-1+

Exceptionally Strong Credit Quality. Issues assigned
this rating are regarded as having the strongest degree of
assurance for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this
rating reflect an assurance of timely payment only slightly less
in degree than issues rated F-1+.

F-2

Good Credit Quality. Issues carrying this rating have
a satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1 categories.

Duff

Bond Ratings

AAA

Bonds rated AAA are considered highest credit quality.
The risk factors are negligible, being only slightly more than
for risk-free U.S. Treasury debt.

Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions.

Bonds rated A have protection factors which are average
but adequate. However, risk factors are more variable and
greater in periods of economic stress.

BBB

Bonds rated BBB are considered to have below average
protection factors but still considered sufficient for prudent
investment. Considerable variability in risk during economic
cycles.

Bonds rated BB are below investment grade but are
deemed by Duff as likely to meet obligations when due. Present
or prospective financial protection factors fluctuate according
to industry conditions or company fortunes. Overall quality may
move up or down frequently within the category.

Bonds rated B are below investment grade and possess
the risk that obligations will not be met when due. Financial
protection factors will fluctuate widely according to economic
cycles, industry conditions and/or company fortunes. Potential
exists for frequent changes in quality rating within this
category or into a higher or lower quality rating grade.

CCC

Bonds rated CCC are well below investment grade
securities. Such bonds may be in default or have considerable
uncertainty as to timely payment of interest, preferred
dividends and/or principal. Protection factors are narrow and
risk can be substantial with unfavorable economic or industry
conditions and/or with unfavorable company developments.

Defaulted debt obligations. Issuer has failed to meet
scheduled principal and/or interest payments.

Plus (+) and minus (-) signs are used with a rating
symbol (except AAA) to indicate the relative position of a
credit within the rating category.

Commercial Paper Rating

The rating Duff-1 is the highest commercial paper
rating assigned by Duff. Paper rated Duff-1 is regarded as
having very high certainty of timely payment with excellent
liquidity factors which are supported by ample asset protection.

Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals.
Risk factors are small.

IBCA

Bond and Long-Term Ratings

Obligations rated AAA by IBCA have the lowest
expectation of investment risk. Capacity for timely repayment
of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are
unlikely to increase investment risk significantly. Obligations
for which there is a very low expectation of investment risk are
rated AA by IBCA. Capacity for timely repayment of principal
and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk
albeit not very significantly.

Commercial Paper and Short-Term Ratings

The designation A1 by IBCA indicates that the
obligation is supported by a very strong capacity for timely
repayment. Those obligations rated A1+ are supported by the
highest capacity for timely repayment. Obligations rated A2 are
supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business,
economic or financial conditions.

International and U.S. Bank Ratings

An IBCA bank rating represents IBCA's current
assessment of the strength of the bank and whether such bank
would receive support should it experience difficulties. In its
assessment of a bank, IBCA uses a dual rating system comprised
of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long- and Short-Term Ratings as used in the
corporate ratings discussed above. Legal Ratings, which range
in gradation from 1 through 5, address the question of whether
the bank would receive support provided by central banks or
shareholders if it experienced difficulties, and such ratings
are considered by IBCA to be a prime factor in its assessment of
credit risk. Individual Ratings, which range in gradations from
A through E, represent IBCA's assessment of a bank's economic
merits and address the question of how the bank would be viewed
if it were entirely independent and could not rely on support
from state authorities or its owners.

BankWatch

Commercial Paper and Short-Term Ratings

The rating TBW-1 is the highest short-term rating
assigned by BankWatch; the rating indicates that the degree of
safety regarding timely repayment of principal and interest is
very strong.

In addition to ratings of short-term obligations,
BankWatch assigns a rating to each issuer it rates, in
gradations of A through E. BankWatch examines all segments of
the organization including, where applicable, the holding
company, member banks or associations, and other subsidiaries.
In those instances where financial disclosure is incomplete or
untimely, a qualified rating (QR) is assigned to the
institution. BankWatch also assigns, in the case of foreign
banks, a country rating which represents an assessment of the
overall political and economic stability of the country in which
the bank is domiciled.

Prairie Funds
__________________________________________________________________
Statement of Assets and Liabilities
December 9, 1994
__________________________________________________________________
<CAPTION>
Managed
Assets Managed Equity Special International
Income Assets Income Growth Opportunities Equity
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Assets
Cash $ 11,110 $ 11,110 $ 11,111 $ 11,111 $ 11,111 $ 11,111
Deferred organization costs 102,917 102,917 102,917 102,917 102,917 102,917
Total Assets 114,027 114,027 114,028 114,028 114,028 114,028

Liabilities
Organization costs payable 102,917 102,917 102,917 102,917 102,917 102,917

Net Assets $ 11,110 $ 11,110 $ 11,111 $ 11,111 $ 11,111 $ 11,111

Net Asset Value, Offering Price and
Redemption Price per Share:
Class A Shares:
Net assets $ 10 $ 3,703 $ 3,703 $ 3,703 $ 3,703 $ 3,703
Shares outstanding
($0.001 par value). 1 370 370 370 370 370
Net asset value 10.00 10.00 10.00 10.00 10.00 10.00
Sales charge - 4.50% of public
offering price. . . 0.47 0.47 0.47 0.47 0.47 0.47
Maximum Offering Price $ 10.47 $ 10.47 $ 10.47 $ 10.47 $ 10.47 $ 10.47

Class B Shares:
Net assets $ 5,550 $ 3,703 $ 3,704 $ 3,704 $ 3,704 $ 3,704
Shares outstanding
($0.001 par value). 555 370 370 370 370 370
Net asset value $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00

Class I Shares:
Net assets: $ 5,550 $ 3,704 $ 3,704 $ 3,704 $ 3,704 $ 3,704
Shares outstanding
($0.001 par value). 555 370 370 370 370 370
Net asset value $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00

Composition of Net Assets:
Shares of beneficial interest, at
par . . . . . . . . $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
Additional paid-in capital 11,108 11,109 11,110 11,110 11,110 11,110
Net Assets, December 9, 1994 $ 11,110 $ 11,110 $ 11,111 $ 11,111 $ 11,111 $ 11,111
</TABLE>

See Notes to Financial Statements.
<PAGE>
<TABLE>

Assets
<S> <C> <C> <C> <C> <C> <C>

Cash $ 11,111 $ 11,111 $ 11,110 $ 1 $ 2 $ 1
Deferred organization costs 102,917 102,917 102,917 62,917 87,917 52,917
Total Assets 114,028 114,028 114,027 52,818 87,919 52,918

Liabilities
Organization costs payable 102,917 102,917 102,917 52,917 87,917 62,917

Net Assets $ 11,111 $ 11,111 $ 11,110 $ 1 $ 2 $ 1

Net Asset Value, Offering Price and
Redemption Price per Share:
Class A Shares:
Net assets $ 3,703 $ 3,703 $ 10 $ 1 $ 1 $ 1
Shares outstanding
($0.001 par value): 370 370 1 1 1 1
Net asset value 10.00 10.00 10.00 1.00 1.00 1.00
Sales charge - 4.50% for The Bond
Fund and The International Bond
Fund, 3.00% for the Intermediate
Municipal Bond Fund and 0.00% for
the Money Market Funds) 0.47 0.47 0.31 - - -
Maximum Offering Price $ 10.47 $ 10.47 $ 10.31 $ 1.00 $ 1.00 $ 1.00

Class B Shares:
Net assets $ 3,704 $ 3,704 $ 5,550 $ - $ 1 $ -
Shares outstanding
($0.001 par value). 370 370 555 - 1 -
Net asset value $ 10.00 $ 10.00 $ 10.00 $ - $ 1.00 $ -

Class I Shares:
Net assets: $ 3,704 $ 3,704 $ 5,550 $ - $ - $ -
Shares outstanding
($0.001 par value). 370 370 555 - - -
Net asset value $ 10.00 $ 10.00 $ 10.00 $ - $ - $ -

Composition of Net Assets:
Shares of beneficial interest,
at par. . . . . . . $ 1 $ 1 $ 0 $ 0 $ 0 $ 0
Additional paid-in capital 11,110 11,110 11,109 1 2 1
Net Assets, December 9, 1994 $ 11,111 $ 11,111 $ 11,110 $ 1 $ 2 $ 1
</TABLE>

See Notes to Financial Statements.
<PAGE>
Prairie Funds
Notes to Financial Statements
December 9, 1994

Note 1-General

Prairie Funds (the "Trust") was organized as a Massachusetts
Business Trust on October 19, 1994. The Trust is registered
under the Investment Company Act of 1940 (the "Act") as an
open-end management investment company
consisting of twelve portfolios (collectively, the "Funds").

First Chicago Investment Advisers, Inc.("First Chicago") serves
as investment adviser and administrator to the Trust. ANB
Investment Management and Trust Company ("ANB") serves as
investment sub-advisor to the International Equity Fund.
Concord Financial Group, Inc. (the
"Distributor"), as wholly-owned subsidiary of Concord Holding
Corp. ("Concord"), serves as each Fund's distributor.

The Funds each offer three classes of shares - Class A Shares,
Class B Shares and Class I Shares. Class A Shares, Class B
Shares and Class I Shares are essentially the same except that
Class A Shares and Class B Shares bear the fees that are payable
under a Shareholder Services Plan
(the "Service Plan"), at an annual rate of 0.25% of the average
daily net assets of the outstanding Class A Shares and Class B
Shares, respectively. In addition, Class B Shares bear the fees
that are payable under a Distribution Plan, adopted pursuant to
Rule 12b-1 under the Act, at an annual rate of 0.75% (0.50% in
the case of The Intermediate Tax-Exempt Fund) of the average
daily act assets of the outstanding Class B Shares.

The Funds have had no operations other than the sale to Concord
of the following shares:
<TABLE>
<CAPTION>
Shares Net Asset Value of
Fund Purchased Shares Purchased
<S> <C> <C>
The Managed Assets Income Fund 1,111 $11,110

The Managed Assets Fund 1,110 11,110

The Equity Income Fund 1,110 11,111

The Growth Fund 1,110 11,111

The Special Opportunities Fund 1,110 11,111

The International Equity Fund 1,110 11,111

The Bond Fund 1,110 11,111

The International Bond Fund 1,110 11,111

The Intermediate Municipal Bond Fund 1,111 11,110

The U.S. Government Money Market Fund 1 1

The Money Market Fund 2 2

The Municipal Money Market Fund 1 1
</TABLE>

Organization costs incurred in connection with the organization
and initial registration of the Funds will be paid initially by
Concord and reimbursed by the Funds. Such organizational costs
have been deferred and will be amortized ratably over a period
of sixty months from the commencement of operations.

Note 2-Agreements

The Trust has a Management Agreement with First Chicago.
Pursuant to the terms of the management agreement, First Chicago
manages the investments of each Fund and is responsible for the
purchases and sales of each Fund's portfolio securities. For
its services, First Chicago is entitled to the following fees
(annualized), accrued daily and paid monthly:

The Managed Assets Income Fund 0.65%
The Managed Assets Fund 0.65%
The Equity Income Fund 0.50%
The Growth Fund 0.65%
The Special Opportunities Fund 0.70%
The International Equity Fund 0.80%
The Bond Fund 0.55%
The International Bond Fund 0.70%
The Intermediate Municipal Bond Fund 0.40%
The U.S. Government Money Market Fund 0.40%
The Money Market Fund 0.40%
The Municipal Money Market Fund 0.40%

First Chicago has entered into a Sub-Investment Advisory
Agreement with ANB. Pursuant to the terms of the sub-investment
advisory agreement, ANB provides investment assistance and the
day-to-day management of the investments of The International
Equity Fund. For its services, First Chicago has agreed to pay
ANB a fee, accrued daily and paid monthly, at an annual rate of
0.40%.

The Trust has an Administration Agreement with First Chicago.
Pursuant to the terms of the agreement, First Chicago has agreed
to assist in all aspects of the Trust's operations. For its
services, First Chicago is entitled to a fee, accrued daily and
paid monthly at an annual rate of 0.15% of each Fund's average
daily net assets.

First Chicago has entered into a Master Sub-Administration
Agreement with Concord. Pursuant to the terms of this
agreement, Concord has agreed to assist in providing certain
administrative services for the Trust. For its services,
Concord will receive a fee from First Chicago.

The Distributor has entered into a Distribution Agreement with
the Trust. The Distributor does not receive a fee under the
Distribution Agreement.

Under the Service Plan with respect to the Funds' Class A Shares
and Class B Shares, each Fund pays the Distributor for certain
personal services relating to shareholder accounts and certain
services related to the maintenance of shareholder accounts at
an annual rate of 0.25% of the average net assets of the
outstanding Class A Shares and Class B Shares. Under the
Service Plan, the Distributor may make payments to other service
organizations in respect of the provision of these services to
their clients who are the beneficial owners of Class A Shares
and Class B Shares.

Under the Distribution Plan with respect to the Funds' Class B
Shares, each Fund pays the Distributor for advertising,
marketing and distributing Class B Shares at an annual rate of
0.75% of the average net assets of the outstanding Class B
Shares. Under the Service Plan, the Distributor may make
payments to other service organizations in respect of the
provision of these services to their clients who are the
beneficial owners of Class A Shares and Class B Shares. The
fees payable under the Distribution Plan are payable without
regard to actual expenses incurred.
<PAGE>
Report of Independent Auditors

Shareholder and Board of Trustees
Prairie Funds

We have audited the accompanying statements of assets and
liabilities of Prairie Funds (comprising, The Managed Assets
Income Fund, The Managed Assets Fund, The Equity Income Fund,
The Growth Fund, The Special Opportunities Fund, The
International Equity Fund, The Bond Fund, The International Bond
Fund, The Intermediate Municipal Bond Fund, The U.S. Government
Money Market Fund, The Money Market Fund, The Municipal Money
Market Fund) (the "Trust") as of December 9, 1994. These
statements of assets and liabilities are the responsibility of
the Trust's management. Our responsibility is to express an
opinion on these statements of assets and liabilities 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 statements of assets and liabilities are free of material
misstatement. An audit includes examining, on a text basis,
evidence supporting the amounts and disclosures in the
statements of assets and liabilities. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
statements of assets and liabilities presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the statements of assets and liabilities
referred to above present fairly, in all material respects, the
financial position of each of the Funds comprising the Prairie
Funds at December 9, 1994, in conformity with generally accepted
accounting principles.

ERNST & YOUNG LLP

New York, New York
December 9, 1994
<PAGE>
<TABLE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS
<CAPTION>
DECEMBER 31, 1994

PRINCIPAL
BONDS AND NOTES--33.1% AMOUNT VALUE
----------- ----------
<S> <C> <C>
AUTO-RELATED-1.0% Hertz, Sub. Notes,
6.625%, 2000........................ $ 500,000 $ 455,683
----------
BANKING--1.9% Citicorp, Sub. Notes:
9.75%, 1999.......................... 250,000 262,642
8.625%, 2002......................... 350,000 348,300
Westpac Banking, Sub. Deb.,
9.125%, 2001......................... 250,000 255,456
----------
866,398
----------
CONSUMER Time Warner, Notes,
GROWTH STAPLES--1.1% 7.95%, 2000 500,000 477,608
----------
ENERGY--3.4% Burlington Resources, Notes,
8.50%, 2001.......................... 250,000 248,120

Coastal, Sr. Deb.,
10.25%, 2004......................... 500,000 537,500
Occidental Petroleum, Sr. Notes,
11.125%, 2010........................ 400,000 460,961
Shell Canada, Deb.,
7.375%, 1999......................... 250,000 243,302

----------
1,489,883
----------
FINANCIAL--11.2% Barclays American, Notes,
9.125%, 1997......................... 750,000 763,027

Chemical Banking, Sub. Notes,
7.625%, 2003......................... 500,000 468,570

Discover Credit Card, Med.-Term Notes,
8.37%, 1999.......................... 250,000 248,364

General Motors Acceptance:
Med.-Term Notes,
8.65%, 1996...................... 400,000 402,968
Notes:
7.75%, 1997...................... 250,000 245,606
7%, 2000......................... 500,000 465,042
International Lease Finance, Notes,
8.35%, 1998.......................... 500,000 498,878
KFW International Finance,
Guaranteed Notes,
8.85%, 1999.......................... 250,000 255,821
NationsBank, Sub. Notes,
8.125%, 2002......................... 350,000 338,455
Progressive, Notes,
6.60%, 2004.......................... 500,000 435,698
Salomon, Notes,
7.50%, 2003.......................... 500,000 448,483
Wells Fargo & Co., Sub. Notes,
8.375%, 2002......................... 400,000 390,780
---------
4,961,692
---------
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994

PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
---------- ---------
FOODS & BEVERAGES--5.3% Grand Metro Investment, Guaranteed Deb.,
9%, 2011............................. $ 250,000 $ 260,188
Philip Morris Cos., Notes:
8.625%, 1999......................... 500,000 502,281
7.125%, 2004......................... 250,000 223,475
RJR Nabisco Holdings:
Guaranteed Notes,
8.30%,1999....................... 750,000 720,817
Notes,
8.625%, 2002..................... 700,000 651,362
---------

2,358,123
---------
RETAIL--.6% May Department Stores, Med.-Term Notes,
9.45%, 1999.......................... 250,000 257,518
---------
STEEL--1.0% USX-Marathon Group, Notes,
6.375%, 1998......................... 500,000 464,393
---------
TECHNOLOGY--1.0% Digital Equipment, Notes,
8.625%, 2012......................... 500,000 424,010
---------
UTILITIES--2.1% Commonwealth Edison,
First Mortgage, Ser. 81,
8.625%, 2022......................... 250,000 229,039
Long Island Lighting, Deb.,
9%, 2022............................. 300,000 247,194
Pacific Bell, Notes,
7%, 2004............................. 500,000 459,549
--------
935,782
--------
U.S. GOVERNMENT Federal National Mortgage Association:
& AGENCIES--4.5% 7.60%, 1997 400,000 397,704
8.35%, 1999.......................... 500,000 506,469
U.S. Treasury Notes:
8.50%, 1997.......................... 100,000 101,500
8.125%, 1998......................... 500,000 503,985
8%, 2001............................. 500,000 504,062
---------
2,013,720
---------
TOTAL BOND AND NOTES
(cost $15,633,508)................... $14,704,810

</TABLE>
<TABLE>
<CAPTION>
===========
EQUITY-RELATED SECURITIES--56.5%
(COMMON STOCKS AND CONVERTIBLE SECURITIES)
COMMON STOCKS--37.3% SHARES VALUE
------------ ----------
<S> <C> <C>
AUTO RELATED--1.4% General Motors 14,886 $ 628,933

----------
BANKING--4.6% Bank of Boston 21,000 543,375
First Union............................ 21,000 868,875
NationsBank............................ 13,912 627,779
----------

2,040,029
<PAGE>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
EQUITY-RELATED SECURITIES (CONTINUED)
(COMMON STOCKS AND CONVERTIBLE SECURITIES)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ----------
DRUGS--3.8% Bristol-Myers Squibb 8,000 $ 463,000
Johnson & Johnson...................... 8,000 438,000
Pfizer................................. 10,000 772,500
---------
1,673,500
---------
ENERGY--3.8% Atlantic Richfield 5,000 508,750
British Petroleum PLC, A.D.S........... 9,000 718,875
Texaco................................. 7,500 449,063
---------
1,676,688
---------
FOODS & BEVERAGES--2.6% Philip Morris Cos 20,000 1,150,000
---------
HOSPITAL-RELATED--3.6% National Health Investors 61,000 1,593,625
---------
INSURANCE--2.0% Aon 28,500 912,000
---------
REAL ESTATE--2.1% Amli Residential Properties 50,000 937,500
---------
UTILITIES--13.4% British Telecommunications, A.D.R 10,000 601,250
Detroit Edison......................... 20,000 522,500
Entergy................................ 20,000 437,500
GTE.................................... 26,000 789,750
Long Island Lighting................... 33,000 507,375
PECO Energy............................ 25,000 612,500
Sprint................................. 20,000 552,500
Texas Utilities........................ 30,000 960,000
United Illuminating.................... 14,000 413,000
U.S. West.............................. 15,000 534,375
---------
5,930,750
---------
TOTAL COMMON STOCKS.................... 16,543,025
----------
CONVERTIBLE PREFERRED STOCKS--11.9%
AUTOMOTIVE--3.4% Ford Motor, Ser. A, Cum., $4.20 9,000 828,000
General Motors, Ser. C, Cum., $3.25.... 12,000 688,500
---------
1,516,500
---------
BANKING--4.3% BankAmerica, Ser. G, Cum., $3.25 7,000 344,750
Citicorp, Cum., $1.22.................. 25,000 478,125
Citicorp, Cum., $5.375................. 6,000 (a) 695,625
National City, Cum., $4.00............. 6,000 375,000
---------
1,893,500
---------
ENERGY--.9% Snyder Oil, Ser. A, Cum., $1.50 20,000 402,500
---------

FINANCE--1.1% First USA, Cum., 6.25% 15,000 489,375
---------
INDUSTRIAL--.9% WHX, Ser. B, Cum., $3.75 10,000 427,500
---------

INSURANCE--1.3%. Conseco, Ser. D, Cum., $3.25 14,000 570,500
---------
TOTAL CONVERTIBLE PREFERRED STOCKS..... 5,299,875

</TABLE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PRINCIPAL
CONVERTIBLE SUBORDINATED DEBENTURES--7.3% AMOUNT VALUE
----------- ----------
<S> <C> <C>
CONSUMER Time Warner,
GROWTH STAPLES--1.1% 8.75%, 2015 $ 498,000 470,610
---------
DRUGS--1.0% IVAX,
6.50%, 2001.......................... 500,000 (a) 432,500
---------
ENERGY--.7% Swift Energy,
6.50%, 2003.......................... 300,000 300,375
---------
HOSPITAL MANAGEMENT--1.2% Genesis Health Ventures,
6%, 2003............................. 400,000 552,500
---------
INDUSTRIAL--3.3% Seagate Technology,
5%, 2003............................. 500,000 515,000
Starbucks,
4.50%, 2003.......................... 500,000 510,625
Toll Bros.,
4.75%, 2004.......................... 650,000 443,625
---------
1,469,250
---------
TOTAL CONVERTIBLE SUBORDINATED DEBENTURES 3,225,235
---------
TOTAL EQUITY-RELATED SECURITIES
(cost $25,262,929)................... $25,068,135
===========
SHORT-TERM INVESTMENTS--7.0%
COMMERCIAL PAPER: Prudential Funding:
5%, 1/3/1995......................... 830,000 830,000
5%, 1/6/1995......................... 2,270,000 2,270,000
---------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,100,000).................... $3,100,000
==========
TOTAL INVESTMENTS (cost $43,996,437) ................................ 96.6% $42,872,945
====== ===========
CASH AND RECEIVABLES (NET) ......................................... 3.4% 1,494,229
====== ===========
NET ASSETS.................................................................. 100.0% $44,367,174

====== ===========

</TABLE>

NOTE TO STATEMENT OF INVESTMENTS;

(a) Securities exempt from registration under Rule
144A of the Securities Act of 1933. These
securities may be resold in transactions
exempt from registration, normally to qualified
institutional buyers. At
December 31, 1994, these securities amounted to
$1,128,125 or 2.5% of net assets.

See notes to financial statements.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $43,996,437)-see statement...................................... $42,872,945
Cash.................................................................... 434,586
Receivable for investment securities sold............................... 1,032,601
Dividends and interest receivable....................................... 556,532
Receivable for shares of Beneficial Interest subscribed................. 26,018
Prepaid expenses........................................................ 20,378
----------
44,943,060
LIABILITIES:
Due to Adviser.......................................................... $ 18,901
Due to Administrator.................................................... 8,724
Payable for investment securities purchased............................. 338,831
Payable for shares of Beneficial Interest redeemed...................... 159,463
Accrued expenses........................................................ 49,967 575,886
--------- ---------
NET ASSETS ................................................................ $44,367,174
===========
REPRESENTED BY:
Paid-in capital......................................................... $45,097,680
Accumulated undistributed investment income-net......................... 133,309
Accumulated undistributed net realized gain on investments.............. 259,677
Accumulated net unrealized (depreciation) on investments-Note 3......... (1,123,492)
-----------
NET ASSETS at value applicable to 3,658,679 Class A outstanding shares of
Beneficial Interest, equivalent to $12.13 per share
(unlimited number of $.01 par value shares authorized).................. $44,367,174
============
See notes to financial statements.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $ 1,627,737
Cash dividends (net of $6,207 foreign taxes withheld at source)....... 1,494,420
------------
TOTAL INCOME...................................................... $3,122,157
EXPENSES:
Investment advisory fee-Note 2(a)..................................... 317,027
Administration fee-Note 2(a).......................................... 146,321
Shareholder servicing costs-Note 2(b,c)............................... 176,945
Legal fees............................................................ 54,768
Registration fees..................................................... 35,635
Auditing fees......................................................... 27,442
Prospectus and shareholders' reports-Note 2(b)........................ 24,862
Custodian fees........................................................ 16,960
Trustees' fees and expenses-Note 2(d)................................. 7,349
Distribution fee (Class B shares)-Note 2(b)........................... 4,752
Miscellaneous......................................................... 9,464
--------
821,525
Less-expense reimbursement from Adviser and Administrator due
to undertakings-Note 2(a,b,c)..................................... 508,365
--------
TOTAL EXPENSES.................................................. 313,160
---------
INVESTMENT INCOME--NET.......................................... 2,808,997
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 210,291
Net unrealized (depreciation) on investments............................ (4,108,668)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (3,898,377)
----------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(1,089,380)
===========
See notes to financial statements.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31,
-----------------------------

1993 1994
------------- -------------
OPERATIONS:
Investment income-net................................................... $ 2,500,971 $ 2,808,997
Net realized gain on investments........................................ 625,561 210,291
Net unrealized appreciation (depreciation) on investments for the year... 1,377,749 (4,108,668)

------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 4,504,281 (1,089,380)
------------ -----------
NET EQUALIZATION CREDITS--Note 1(e)......................................... 59,053 2,562
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (2,506,116) (2,753,670)
Class B shares........................................................ ___ (34,937)
Net realized gain on investments:
Class A shares........................................................ (674,754) (19,340)
Class B shares........................................................ ___ (323)

------------ -----------
TOTAL DIVIDENDS................................................... (3,180,870) (2,808,270)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 17,738,182 5,577,372
Class B shares........................................................ ___ 1,147,965
Dividends reinvested:
Class A shares........................................................ 2,955,407 2,307,933
Class B shares........................................................ ___ 28,168
Cost of shares redeemed:
Class A shares........................................................ (4,752,158) (11,257,088)
Class B shares........................................................ ___ (1,127,831)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 15,941,431 (3,323,481)
============= =============
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 17,323,895 (7,218,569)
NET ASSETS:
Beginning of year....................................................... 34,261,848 51,585,743
------------ -------------
End of year (including undistributed investment income-net:
$110,357 in 1993 and $133,309 in 1994)................................ $51,585,743 $44,367,174
============= =============

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

SHARES
--------------------------------------------------

CLASS A CLASS B

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

YEAR ENDED DECEMBER 31, PERIOD ENDED
------------------------
1993 1994 DECEMBER 2, 1994(1)
------- -------- -------------------
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................. 1,371,296 441,901 90,904
Shares issued for dividends reinvested.................. 226,486 185,739 2,281
Shares redeemed......................................... (365,489) (903,518) (93,185)(2)
--------- -------- -----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING.... 1,232,293 (275,878) ___
========= ======== ===========

</TABLE>
- ----------------------------

(1) From February 8, 1994 (commencement of initial offering)
to December 2, 1994.

(2) Includes 91,228 shares converted to Class A shares on
December 2, 1994.

See notes to financial statements.

<TABLE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND
FINANCIAL HIGHLIGHTS

CLASS A SHARES--NOTE 1 CLASS B SHARES
--------------------------------------------------- ------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED
---------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 DECEMBER 2, 1994(1)
------ ------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $11.54 $10.79 $12.56 $12.68 $13.11 $13.05
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net........... .86 .83 .79 .72 .73 .51
Net realized and unrealized
gain (loss) on investments.... (.54) 1.77 .26 .61 (.98) (.91)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... .32 2.60 1.05 1.33 (.25) (.40)
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.. (.88) (.83) (.77) (.72) (.72) (.54)
Dividends from net realized gain on
investments......................... (.19) -- (.16) (.18) (.01) (.01)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS....................... (1.07) (.83) (.93) (.90) (.73) (.55)
------ ------ ------ ------ ------ ------
Conversion to Class A shares.......... -- -- -- -- -- (12.10)(2)
------ ------ ------ ------ ------ ------
Net asset value, end of year.......... $10.79 $12.56 $12.68 $13.11 $12.13 --
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (3)............... 2.94% 24.87% 8.68% 10.70% (1.92%) (3.13%)(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- -- .02% .39% .63% 1.21%(4)
Ratio of net investment income to average
net assets.......................... 7.71% 7.04% 6.24% 5.54% 5.77% 4.10%(4)

Decrease reflected in above expense ratios
due to undertakings by the Adviser and
Administrator (limited to the expense
limitation provision of the Investment
Advisory and Administration Agreements)... 2.58% 2.16% 1.86% 1.26% 1.04% .96%(4)
Portfolio Turnover Rate..................... 29.97% 26.02% 22.14% 16.40% 28.69% 28.69%
Net Assets, end of year (000's Omitted)..... $8,950 $14,038 $34,262 $51,586 $44,367 --

</TABLE>

- ----------------------------
(1) From February 8, 1994 (commencement of initial offering)
to December 2, 1994.

(2) On December 2, 1994 the Fund terminated its offering of
Class B shares and converted such shares to Class A.

(3) Exclusive of sales load.

(4) Not annualized.

See notes to financial statements.

<PAGE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

The Fund is registered under the Investment Company
Act of 1940 ("Act") as a diversified open-end management
investment company. The First National Bank of Chicago
("Adviser") serves as the Fund's investment adviser. The
Dreyfus Corporation ("Administrator") provides certain
administrative services to the Fund-see Notes 2(a) and 4.
Dreyfus Service Corporation, a wholly-owned subsidiary of the
Administrator, acted as the exclusive distributor of the Fund's
shares, until August 24, 1994. Effective August 24, 1994, the
Administrator became a direct subsidiary of Mellon Bank, N.A.

On August 24, 1994, Premier Mutual Fund Services,
Inc. (the "Distributor") was engaged as the Fund's distributor.
The Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of
which is Boston Institutional Group, Inc. (see Note 4).

On October 1, 1993 the Fund's Board of Trustees
classified the Fund's existing shares into Class A shares and
authorized an unlimited number of $.01 par value Class B
shares. The Fund began offering Class B shares on February 8,
1994. Class A shares are subject to a sales charge imposed at
the time of purchase and Class B shares are subject to a
contingent deferred sales charge imposed at the time of
redemption on redemptions made within six years of purchase.
Other differences between the two Classes included the services
offered to and the expenses borne by each Class and certain
voting rights. On December 2, 1994 the Fund terminated its
offering of Class B shares and converted such shares to Class
A.

(A) PORTFOLIO VALUATION: Most debt securities
(excluding short-term investments) are valued each business day
by an independent pricing service ("Service") approved by the
Board of Trustees. Debt securities for which quoted bid prices
are readily available and are representative of the bid side of
the market in the judgement of the Service are valued at the
mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as
calculated by the Service based upon its evaluation of the
market for such securities). Other debt securities are carried
at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities
of comparable quality, coupon, maturity and type; indications
as to values from dealers; and general market conditions.
Short-term investments are carried at amortized cost, which
approximates value. Other securities are valued at the average
of the most recent bid and asked prices in the market in which
such securities are primarily traded, or at the last sales
price for securities traded primarily on an exchange or the
national securities market. In the absence of reported sales
of securities traded primarily on an exchange or the national
securities market, the average of the most recent bid and asked
prices is used. Bid price is used when no asked price is
available.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are
recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income,
including, where applicable, amortization of discounts on
investments, is recognized on the accrual basis.

(C) DIVIDENDS TO SHAREHOLDERS: Dividends are
recorded on the ex-dividend date. Dividends from investment
income-net are declared and paid monthly. Dividends from net
realized capital gain are normally declared and paid annually,
but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can
be offset by capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.

(D) FEDERAL INCOME TAXES: It is the policy of the
Fund to continue to qualify as a regulated investment company,
if such qualification is in the best interests of its
shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal
income and excise taxes.

(E) EQUALIZATION: Prior to February 8, 1994, the
Fund followed the accounting practice known as "equalization"
by which a portion of the amounts received on issuance and paid
on redemptions of Fund shares was allocated to undistributed
investment income-net so that undistributed investment
income-net per share is unaffected by Fund shares issued or
redeemed. Effective February 8, 1994, with the commencement of
the initial offering of Class B shares, the Fund ceased
following the accounting practice of equalization.

NOTE 2--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:

(A) Fees payable by the Fund pursuant to the
provisions of an Investment Advisory Agreement with the Adviser
and an Administration Agreement with the Administrator are
payable monthly based on annual rates of .65 of 1% and .30 of
1%, respectively, of the average daily value of the Fund's net
assets. The agreements further provide that if in any full
year the aggregate expenses of the Fund, excluding taxes,
brokerage, interest on borrowings and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction
over the Fund, the Fund may deduct from the payments to be made
to the Adviser and the Administrator, or the Adviser and the
Administrator will each bear, such excess expense in proportion
to their respective fees. The most stringent state expense
limitation applicable to the Fund presently requires
reimbursement of expenses in any full year that such expenses
(exclusive of distribution expenses and certain expenses as
described above) exceed 2-1/2% of the first $30 million, 2% of
the next $70 million and 1-1/2% of the excess over $100 million
of the average value of the Fund's net assets in accordance
with California "blue sky" regulations.

The Adviser and the Administrator had undertaken from
January 1, 1994 through September 12, 1994 to reduce the
Advisory fee and the Administration fee paid by, and reimburse
such excess expenses of the Fund to the extent that the Fund's
aggregate expenses (excluding certain expenses as described
above) exceeded an annual rate of .50 of 1% average daily net
assets and thereafter had undertaken through September 29, 1994
to reduce the Advisory fee and Administration fee paid by, and
reimburse such excess expenses of the Fund, to the extent that
the Fund's aggregate expenses (excluding certain expenses as
described above) exceeded specified annual percentages of the
Fund's average daily net assets. The Adviser and Administrator
has currently undertaken from September 30, 1994 to waive
receipt of Advisory fee and Administration fee to the extent
that the Fund's aggregate annual expenses exceed 1% of the
Funds average daily net assets. Pursuant to such undertakings,
the Adviser and the Administrator reimbursed the Fund $259,250
and $119,654, respectively.

First Chicago Investment Services, Inc. ("FCIS"), an
affiliate of the Adviser, retained $80,008 during the year
ended December 31, 1994 from commissions earned on sales of the
Fund's Class A shares.

No amounts were retained by the Distributor during
the year ended December 31, 1994 from contingent deferred sales
charges imposed upon redemptions of the Fund's Class B shares.

(B) Under the Distribution Plan ("Class B
Distribution Plan") adopted pursuant to Rule 12b-1 under the
Act, effective February 8, 1994, the Fund pays for advertising,
marketing and distributing Class B shares, at an annual rate of
.75 of 1% of the value of the Fund's Class B shares average
daily net assets. Under the Distribution Plan, the Fund may
make payments to Service Agents, including FCIS and the
Distributor, in respect of these services. The Fund determines
the amounts to be paid to Service Agents. Service Agents
receive such fees in respect of the average daily value of
Class B shares owned by their clients.

FIRST PRAIRIE DIVERSIFIED ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Prior to February 8, 1994, the Fund's Service Plan
("prior Service Plan") provided that the Fund pay for costs and
expenses in connection with advertising, and marketing shares
of the Fund and payments made to one or more Service Agents
(which may include the Advisor, Administrator and the
Distributor) based on the value of the Fund's shares owned by
clients of the Service Agent. These advertising and marketing
expenses and fees of the Service Agents may not exceed an
annual rate of .30 of 1% of the Funds average daily net assets.
The prior Service Plan also provided for the Fund to bear the
costs of preparing, printing and distributing certain of the
Fund's prospectuses and statements of additional information
and costs associated with implementing and operating the Plan,
not to exceed the greater of $100,000 or .005 of 1% of the
Fund's average daily net assets for any full fiscal year.

During the year ended December 31, 1994, $16,654 was
charged to the Fund pursuant to the prior Service Plan. From
February 8, 1994 through December 2, 1994 $4,752 was charged
pursuant to the Class B Distribution Plan, of which $4,752 was
waived pursuant to an undertaking.

(C) Under the Shareholder Services Plan, effective
February 8, 1994, the Fund pays Service Agents (which may
include the Adviser, the Administrator and the Distributor), at
an annual rate of up to .25 of 1% of the value of the Fund's
average daily net assets of Class A and Class B share for
servicing shareholder accounts. The services provided may
include personal services relating to shareholder accounts,
such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related
to the maintenance of shareholder accounts. For the year ended
December 31, 1994, $123,125 and $1,584 were charged to the
Class A and Class B shares, respectively, pursuant to the
Shareholder Services Plan, of which all was waived pursuant to
an undertaking.

(D) Prior to August 24, 1994, certain officers and
trustees of the Fund were "affiliated persons," as defined in
the Act, of the Adviser or the Dreyfus Service Corporation.
Each trustee who is not an "affiliated person" receives an
annual fee of $1,500 and an attendance fee of $250 per meeting.

NOTE 3--SECURITIES TRANSACTIONS:

The aggregate amount of purchases and sales of
investment securities, other than short-term securities, during
the year ended December 31, 1994 amounted to $13,385,118 and
$12,913,372, respectively.

At December 31, 1994, accumulated net unrealized
depreciation on investments was $1,123,492, consisting of
$1,861,358 gross unrealized appreciation and $2,984,850 gross
unrealized depreciation.

At December 31, 1994, the cost of investments for
Federal income tax purposes was substantially the same as the
cost for financial reporting purposes (see the Statement of
Investments).

NOTE 4--SUBSEQUENT EVENTS:

As of January 1, 1995, the Fund's investment adviser
is First Chicago Investment Management Company ("FCIMCO"), a
newly formed registered investment adviser and a wholly-owned
subsidiary of the Adviser. Effective January 31, 1995, the
Fund entered into a new administration agreement with FCIMCO.
In addition, effective January 31, 1995, FCIMCO entered into a
master sub-administration agreement with Concord Holding
Corporation ("Concord") pursuant to which FCIMCO will pay
Concord a portion of its administration fee in consideration of
Concord's providing administrative services to the Fund. From
January 17, 1995 through January 31, 1995, Concord also served
as the Fund's administrator. The Fund has agreed to pay FCIMCO
a monthly advisory and administration fee at the annual rate of
.65 and .15 of 1% of the value of the Fund's average daily net
assets, respectively.

The Fund entered into a new distribution agreement
with Concord Financial Group, Inc., a wholly-owned subsidiary
of Concord which became effective January 17, 1995.

<PAGE>

FIRST PRAIRIE DIVERSIFIED ASSET FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
FIRST PRAIRIE DIVERSIFIED ASSET FUND

We have audited the accompanying statement of assets
and liabilities of First Prairie Diversified Asset Fund,
including the statement of investments, as of December 31,
1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights
for each of the years indicated therein. 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, 1994 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 First Prairie
Diversified Asset Fund, at December 31, 1994, 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 indicated years, in
conformity with generally accepted accounting principles.

Ernst & Young LLP
New York, New York
February 10, 1995

PRAIRIE INTERMEDIATE BOND FUND
- ---------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
January 31, 1995
- ---------------------------------------------------------------

<CAPTION>
Value
Principal (Note
Description Amount 2(a))
- ------------------------------------------------------------------- --------- ----------
<S> <C> <C>
BOND AND NOTES--51.8%
U.S. TREASURY NOTES--45.4%
7.875%, 11/15/1999............................................... $ 415,000 $ 420,576
7.50%, 11/15/2001................................................ 200,000 199,187
7.50%, 5/15/2002................................................. 150,000 149,484
7.375%, 5/15/1996................................................ 750,000 752,812
6.875%, 10/31/1996............................................... 75,000 74,578
6.50%, 9/30/1996................................................. 250,000 247,344
6.25%, 2/15/2003................................................. 200,000 183,812
5.375%, 5/31/1998................................................ 375,000 352,148
5.125%, 6/30/1998................................................ 400,000 372,250
5.00%, 1/31/1999................................................. 550,000 502,906
----------
Total U.S. Treasury Notes (cost $3,341,830)........................ 3,255,097
----------
U.S. GOVERNMENT AGENCY NOTES--2.2%
Federal National Mortgage Association, 7.65%, 4/29/2004.......... 100,000 96,153
Government National Mortgage Association, Pool #304382, 8.50%,
3/15/2023...................................................... 66,050 65,968
----------
Total U.S. Government Agency Notes (cost $170,958)................. 162,121
----------

SHORT-TERM U.S. GOVERNMENT AGENCY DISCOUNT NOTES--4.2%
Federal Home Loan Bank Discount Note, 5.59%*, 2/08/1995 (cost
$299,675)...................................................... 300,000 299,675
----------

TOTAL INVESTMENTS (COST $3,812,463)--51.8%......................... 3,716,893
OTHER ASSETS IN EXCESS OF LIABILITIES--48.2%....................... 3,453,006
----------
NET ASSETS--100.0%................................................. $7,169,899
----------
----------
- ------------------
* Effective yield

</TABLE>

See Notes to Financial Statements.

PRAIRIE INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value (cost $3,812,463)....................... $3,716,893
Receivable for Fund shares sold............................................. 3,361,813
Receivable from adviser..................................................... 195,457
Interest receivable......................................................... 45,161
Prepaid expenses--Note 1(e)................................................. 39,673
----------
Total Assets......................................................... 7,358,997
----------
LIABILITIES:
Administration fees payable................................................. 129
Shareholder servicing fees payable.......................................... 235
Bank overdraft.............................................................. 143,433
Accrued legal fees.......................................................... 4,722
Accrued Trustees' fees...................................................... 575
Dividends payable........................................................... 613
Other accrued expenses...................................................... 39,391
----------
Total Liabilities.................................................... 189,098
----------
NET ASSETS.................................................................... $7,169,899
----------
----------
Net Asset Value, Offering Price and Redemption Price per Share:
Class A Shares:
($68,571 divided by 8,923 shares of beneficial interest issued and
outstanding, $0.001 par value, unlimited number of shares
authorized).......................................................... $ 7.68
Sales charge--3.00% of maximum offering price.......................... 0.24
----------
Maximum Offering Price................................................. $ 7.92
----------
----------
Class I Shares:
($7,101,328 divided by 924,506 shares of beneficial interest issued and
outstanding, $0.001 par value, unlimited number of shares
authorized).......................................................... $ 7.68
----------
----------
COMPOSITION OF NET ASSETS:
Shares of common stock, at par.............................................. $ 933
Additional paid-in capital.................................................. 7,328,148
Accumulated net realized losses............................................. (63,612)
Net unrealized depreciation of investments.................................. (95,570)
----------
NET ASSETS.................................................................... $7,169,899
----------
----------

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended January 31, 1995
- --------------------------------------------------------------------------------

<S> <C>INVESTMENT INCOME:
INTEREST............................................................ $348,758
EXPENSES
Advisory fees--Note 3(a).......................................... $ 30,810
Administration fees--Note 3(a).................................... 252
Shareholder servicing fees (Class A Shares and Class B Shares)--
Note 3(b)....................................................... 170
12b-1 fees (Class B Shares)--Note 3(c)............................ 8
Legal fees........................................................ 36,631
Reports to shareholders........................................... 17,714
Audit fees........................................................ 17,179
Transfer agent fees and expenses.................................. 8,893
Amortization of organization costs................................ 8,592
Trustees' fees--Note 3(d)......................................... 5,602
Registration fees................................................. 3,428
Custodian fees and expenses....................................... 3,383
Miscellaneous expenses............................................ 7,099
--------
139,761
Less: Fee waivers and expense reimbursements...................... 137,928 1,833
-------- --------
NET INVESTMENT INCOME...................................... 346,925
--------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments.................................. (63,605)
Net unrealized depreciation of investments........................ (304,664)
--------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS............ (368,269)
--------

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $(21,344)
--------
--------

</TABLE>

See Notes to Financial Statements.

<TABLE>

INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<CAPTION>

For the For the
Year Ended Period Ended
January 31, January 31,
1995 1994<F1>
------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.......................................... $ 346,925 $ 269,055
Net realized (loss) gain on investments........................ (63,605) 13,430
Net unrealized depreciation of investments..................... (304,664) (60,015)
------------ ------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.............................................. (21,344) 222,470
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A shares............................................... (4,217) (1,326)
Class B shares(2)............................................ (99) --
Class I shares............................................... (342,609) (267,729)
------------ ------------
TOTAL DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME.................................................. (346,925) (269,055)
------------ ------------
Net realized gain on investments:
Class A shares............................................... (16) (152)
Class B shares<F2>........................................... (1) --
Class I shares............................................... (1,196) (12,072)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN
ON INVESTMENTS.......................................... (1,213) (12,224)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................... 19,449 51,267
Class B shares<F2>........................................... 2,000 --
Class I shares............................................... 7,661,463 5,247,186
Dividends and distributions reinvested:
Class A shares............................................... 4,153 1,484
Class B shares<F2>........................................... 99 --
Class I shares............................................... 5,537 5,299
Cost of shares redeemed:
Class A shares............................................... (15,285) --
Class B shares<F2>........................................... (2,099) --
Class I shares............................................... (5,328,334) (154,029)
------------ ------------
NET INCREASE IN ASSETS FROM CAPITAL STOCK TRANSACTIONS.... 2,346,983 5,151,207
------------ ------------
TOTAL INCREASE IN NET ASSETS............................ 1,977,501 5,092,398
NET ASSETS:
Beginning of period............................................ 5,192,398 100,000
------------ ------------
End of period.................................................. $ 7,169,899 $ 5,192,398
------------ ------------
------------ ------------

</TABLE>
<TABLE>

PRAIRIE INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS-- (CONTINUED)
- --------------------------------------------------------------------------------
<CAPTION>

For the For the
Year Ended Period Ended
January 31, January 31,
1995 1994<F1>
------------ ------------
CAPITAL SHARE TRANSACTIONS:

<S> <C> <C>
CLASS A:
Shares sold.................................................. 2,527 6,185
Shares issued in reinvestment of dividends and
distributions............................................. 533 180
Shares redeemed.............................................. (1,997) --
------------ ------------
NET INCREASE IN CLASS A SHARES OUTSTANDING................ 1,063 6,365
------------ ------------
------------ ------------
CLASS B<F2>:
Shares sold.................................................. 245 --
Shares issued in reinvestment of dividends................... 13 --
Shares redeemed.............................................. (258) --
------------ ------------
NET INCREASE IN CLASS B SHARES OUTSTANDING................ -- --
------------ ------------
------------ ------------
CLASS I:
Shares sold.................................................. 1,001,211 628,922
Shares issued in reinvestment of dividends and
distributions............................................. 710 639
Shares redeemed.............................................. (698,958) (18,488)
------------ ------------
NET INCREASE IN CLASS I SHARES OUTSTANDING................ 302,963 611,073
------------ ------------
------------ ------------

- ----------------
<FN> For the period March 5, 1993 (commencement of operations) through January 31, 1994.
<FN> For the period February 8, 1994 (initial offering date of Class B Shares)
through December 2, 1994. On December 2, 1994 the Fund terminated its
offering of Class B Shares and converted such Shares to Class A Shares.

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment return, ratios to average net
assets and other supplemental data for the period March 5, 1993 (commencement of
operations) through January 31, 1994 and for the year ended January 31, 1995.
This information has been derived from information provided in the Fund's
financial statements.

For the For the
Year Ended Period Ended
January 31, January 31,
1995 1994<F1>
------------ ------------

<S> <C> <C>
PER SHARE DATA:
CLASS A:
Net asset value, beginning of period........................... $ 8.25 $ 8.36
------ ------
INVESTMENT OPERATIONS:
Net investment income.......................................... 0.52 0.47
Net realized and unrealized loss on investments................ (0.57) (0.09)
------ ------
TOTAL (LOSS) GAIN FROM INVESTMENT OPERATIONS............ (0.05) 0.38
------ ------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income........................... (0.52) (0.47)
Distributions from net realized gain on investments............ -- (0.02)
------ ------
TOTAL DIVIDENDS AND DISTRIBUTIONS....................... (0.52) (0.49)
------ ------
Net asset value, end of period................................. $ 7.68 $ 8.25
------ ------
------ ------
TOTAL INVESTMENT RETURN<F2>...................................... -0.45% 5.16%<F3>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................ 0.04% --
Ratio of net investment income to average net assets........... 6.70% 5.96%<F3>
Decrease reflected in above expense ratios due to fee waivers
and expense reimbursements................................... 2.66% 3.67%<F3>
Portfolio Turnover Rate........................................ 71.65% 26.54%<F4>
Net Assets, end of period (000's Omitted)...................... $ 69 $ 65

- ----------------
<FN> For the period March 5, 1993 (commencement of operations) through January 31, 1994.
<FN> Exclusive of sales charge.
<FN> Annualized.
<FN> Not Annualized.

</TABLE>

See Notes to Financial Statements.

<TABLE>

<CAPTION>
PRAIRIE INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment return, ratios to average net
assets and other supplemental data for the period February 8, 1994 (initial
offering date) through December 2, 1994. This information has been derived from
information provided in the Fund's financial statements.

For the
Period Ended
December 2,
1994<F1>
------------

<S> <C>
PER SHARE DATA:
CLASS B:
Net asset value, beginning of period........................................ $ 8.16
------
INVESTMENT OPERATIONS:
Net investment income....................................................... 0.40
Net realized and unrealized loss on investments............................. (0.55)
------
TOTAL LOSS FROM INVESTMENT OPERATIONS................................ (0.15)
------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income........................................ (0.40)
Distributions from net realized gain on investments......................... --
------
TOTAL DIVIDENDS AND DISTRIBUTIONS.................................... (0.40)
------
Conversion to Class A Shares(1)............................................. $ 7.61
------
Net asset value, end of period.............................................. $ --
------
------
TOTAL INVESTMENT RETURN....................................................... -1.82%<F3>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..................................... --
Ratio on net investment income to average net assets........................ 6.48%<F2>
Decrease reflected in above expense ratios due to fee waivers and expense
reimbursements............................................................ 2.58%<F2>
Portfolio Turnover Rate..................................................... 71.65%<F3>
Net Assets, end of period (000's Omitted)................................... $ --

- ----------------
<FN> For the period February 8, 1994 (initial offering date) through December 2,
1994. On December 2, 1994 the Fund terminated its offering of Class B Shares
and converted such shares to Class A Shares.
<FN> Annualized.
<FN> Not Annualized.

</TABLE>

See Notes to Financial Statements.

<TABLE>

For the For the
Year Ended Period Ended
January 31, January 31,
1995 1994<F1>
------------ ------------

<S> <C> <C>
PER SHARE DATA:
CLASS I:
Net asset value, beginning of period........................... $ 8.25 $ 8.36
------ ------
INVESTMENT OPERATIONS:
Net investment income.......................................... 0.52 0.47
Net realized and unrealized (loss) on investments.............. (0.57) (0.09)
------ ------
TOTAL (LOSS) GAIN FROM INVESTMENT OPERATIONS............ (0.05) 0.38
------ ------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income........................... (0.52) (0.47)
Distributions from net realized gain on investments............ -- (0.02)
------ ------
TOTAL DIVIDENDS AND DISTRIBUTIONS....................... (0.52) (0.49)
------ ------
Net asset value, end of period................................. $ 7.68 $ 8.25
------ ------
------ ------
TOTAL INVESTMENT RETURN.......................................... -0.48% 5.16%<F2>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................ 0.04% --
Ratio of net investment income to average net assets........... 6.70% 6.21%<F2>
Decrease reflected in above expense ratios due to fee waivers
and expense reimbursements................................... 2.66% 2.64%<F2>
Portfolio Turnover Rate........................................ 71.65% 26.54%<F3>
Net Assets, end of period (000's Omitted)...................... $7,101 $5,128

- ----------------
<FN> For the period March 5, 1993 (commencement of operations) through January 31, 1994.
<FN> Annualized.
<FN> Not Annualized.

</TABLE>

See Notes to Financial Statements.

PRAIRIE INTERMEDIATE BOND FUND
- ----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------

NOTE 1--GENERAL

Prairie Intermediate Bond Fund (the 'Fund') was organized as a
Massachusetts business trust on March 12, 1992. The Fund had no
operations prior to March 5, 1993 other than matters relating to
its organization and registration as a diversified open-end
management investment company under the Investment Company
Act of 1940 ('Act') and the Securities Act of 1933 and the sale
and issuance of 1,495 Class A Shares and 10,470 Class I Shares
(formerly Class F Shares) of Beneficial Interest ('Initial
Shares') to The Dreyfus Corporation ('Dreyfus'), as the Fund's
sponsor at that time.

Effective January 17, 1995, the Fund changed its name from
'First Prairie U.S. Government Income Fund, Intermediate
Series.'

On March 3, 1993, First Chicago (the Fund's former investment
adviser) acting as Trustee for Personal Trust Government Bond
Fund ('Bond Fund') agreed to transfer the assets of Bond Fund,
subject to Bond Fund's liabilities, to the Fund in exchange for
Class I Shares (formerly Class F Shares) of Beneficial Interest
of the Fund at net asset value (the 'Exchange'). The Exchange
became effective after the close of business on March 4, 1993,
at which time the Fund issued 475,345 Class I Shares (formerly
Class F Shares) valued at $8.36 per share to participants in the
Bond Fund
in exchange for the Bond Fund's net assets valued at $3,972,686.
The Bond Fund's net assets included $269,109 of unrealized
appreciation which was transferred to the Fund in the Exchange.
The Fund commenced operations on March 5, 1993.

At a meeting of the Board of Trustees of the Fund held on
October 28, 1994, the Board unanimously approved a proposal to
change the Fund's management policies and its classification to
a non-diversified investment company, appoint a new
administrator and distributor for the Fund and lower the
management fees then in effect. This proposal was unanimously
approved by Fund shareholders on January 17, 1995. On this date,
First Chicago Investment Management Company ('FCIMCO'), a
wholly-owned subsidiary of First National Bank of Chicago, was
named investment adviser and administrator of the Fund. FCIMCO
has entered into an agreement with Concord Holding Corporation
('Concord') to assist in providing certain administrative
services to the Fund.
In addition, on January 17, 1995, Concord Financial Group, Inc.
(the 'Distributor'), a wholly-owned subsidiary of Concord, was
named principal underwriter and distributor of the Fund's
shares.

For the period from February 1, 1994 through January 16,
1995,
Dreyfus served as the Fund's administrator. For the period from
February 1, 1994 through August 24, 1994 Dreyfus Service
Corporation (the 'former Distributor'), a wholly-owned
subsidiary of Dreyfus, acted as the principal underwriter and
distributor of the Fund's shares. Effective August 24, 1994,
Dreyfus became a direct subsidiary of Mellon Bank, N.A. As such,
effective August 24, 1994, Premier Mutual Fund Services, Inc.
('Premier'), a wholly-owned subsidiary of Institutional
Administration Services, Inc. whose parent company is Boston
Institutional Group, Inc., became and served as the principal
underwriter and distributor of the Fund's shares through January
16, 1995.

The Fund offers Class A Shares, Class B Shares and Class I
Shares (formerly Class F Shares). Class A Shares are subject to
a sales charge imposed at the time of purchase, Class B Shares
are subject to a contingent deferred sales charge imposed at the
time of redemption and Class I Shares are offered without a
sales charge. Other differences between the three Classes
include the services offered to and the expenses borne by each
Class. On December 2, 1994 the Fund terminated its offering of
Class B Shares and converted such shares to Class A Shares.

PRAIRIE INTERMEDIATE BOND FUND
- ---------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS-- (CONTINUED)
- ---------------------------------------------------------------

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES

(A) Portfolio valuation: The Fund's investments (excluding
short-term investments) are valued each business day by an
independent pricing service (the 'Service') approved by the
Board of Trustees. Investments for which quoted bid prices in
the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the
mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such
securities). Other investments (which constitute a majority of
the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include
consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. Short-term
investments are carried at amortized cost, which approximates
market value.

(C) Dividends to shareholders: It is the policy of the Fund to
declare dividends daily from net investment income. Such
dividends are paid monthly. Dividends from net realized capital
gain are normally declared and paid annually, but the Fund may
make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund
not to distribute such gains.

(D) Federal income taxes: It is the policy of the Fund to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from all, or substantially all, Federal
income taxes.

The Fund has an unused capital loss carryover of
approximately $28,000 available for Federal income tax purposes
to be applied against future net securities profit, if any
realized subsequent to January 31, 1995. The carryover does not
include net realized securities losses from November 1, 1994
through January 31, 1995 which are treated, for Federal income
tax purposes, as arising in fiscal 1996. If not applied, the
carryover expires in fiscal 2003.

(E) Other: Organization expenses paid by the Fund are
included in prepaid expenses and are being amortized to
operations from March 5, 1993, the date operations commenced,
over the period during which it is expected that a benefit will
be realized, not to exceed five years. At January 31, 1995, the
unamortized balance of such expenses amounted to $38,079. In the
event that any of the Initial Shares are redeemed during the
amortization period, the redemption proceeds will be reduced by
any unamortized organization expenses in the same proportion as
the number of such
shares being redeemed bears to the number of such shares
outstanding at the time of such redemption.

NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

(A) The Fund has an Investment Advisory Agreement with FCIMCO
pursuant to which FCIMCO has agreed to provide day-to-day
management of the Fund's investments at an annual rate of 0.40%
of the Fund's average daily net assets. For the period February
1, 1994 through January 16, 1995, the Fund had a management
agreement with First Chicago pursuant to which First Chicago
agreed to provide day-to-day management of the Fund's
investments at an
annual rate of 0.60% of the Fund's average daily net assets.

The Fund has an Administration Agreement with FCIMCO pursuant
to which FCIMCO has agreed to assist in all aspects of the
Fund's operations at an annual rate of 0.15% of the Fund's
average daily net assets. FCIMCO has engaged Concord to provide
certain administrative services to the Fund pursuant to a Master
Sub-Administration Agreement between FCIMCO and Concord. FCIMCO
has agreed to pay Concord a fee from its own funds for the
services stipulated in the Master Sub-Administration Agreement.
For the period from February 1, 1994 through January 16, 1995,
First Chicago engaged Dreyfus to assist it in providing
certain administrative services to the Fund pursuant to a
separate agreement between First Chicago and Dreyfus. Pursuant
to this agreement, First Chicago agreed to pay Dreyfus an annual
fee of 0.08% of the Fund's average daily net assets.

For the period from February 1, 1994 through January 16,
1995, First Chicago voluntarily agreed to waive its entire
investment advisory fee and reimburse all of the operating
expenses of the Fund. As such, First Chicago waived fees of
$30,173 and reimbursed operating expenses of $100,643.

For the period from January 17, 1995 through January 31,
1995,
FCIMCO voluntarily agreed to waive its investment advisory fee,
a portion of its Administration fee and reimburse a portion of
the operating expenses of the Fund to the extent that the Fund's
expenses, excluding 12b-1 and shareholder servicing fees, exceed
0.55% of the value of the Fund's average daily net assets
(annualized). As such, FCIMCO waived advisory fees of $637,
Administration fees of $123 and reimbursed operating expenses of
$6,352 in order for the Fund to meet this limitation.

The Distributor, the former Distributor and Premier were not
entitled to any fees pursuant to their respective distribution
agreements.

(B) For the period from February 1, 1994 through January 16,
1995, the Fund had a Service Plan (the 'former Plan') pursuant
to which it agreed to pay costs and expenses in connection with
advertising and marketing Class A Shares and Class B Shares of
the Fund and payments made to one or more Service Agents
(which may have included First Chicago, Dreyfus, the former
Distributor and Premier) based on the value of the Fund's Class
A Shares and Class B Shares owned by clients of the Service
Agent. These advertising and marketing expenses and fees of the
Service Agents may not exceed an annual rate of .25% of 1% of
the Fund's Class A and Class B Shares average daily net assets.
For the period ended January 16, 1995, no amounts were paid by
the Fund
pursuant to the undertaking in effect (see Note 3(a)).

For the period January 17, 1995 through January 31, 1995,
the Fund's Class A Shares had a Shareholder Service's Plan (the
'Plan') pursuant to which the Fund pays the Distributor a fee,
at an annual rate of 0.25% of the average daily net assets of
the outstanding Class A Shares. Pursuant to the terms of the
Plan, the Distributor has agreed to provide certain shareholder
services to
the holders of these shares. Additionally, under the terms of
the Plan, the Distributor may make payments to other Shareholder
Service Agents who provide such shareholder services to their
clients who are beneficial owners of Class A Shares. FCIMCO,
First National Bank of Chicago and their affiliates may act as
Shareholder Service Agents and receive fees under the Plan. For
the period January 17, 1995 through January 31, 1995, the Fund
paid $21 in fees under the Plan. Of this amount, $21 was
retained by the Distributor.

(C) For the period from February 8, 1994 through December 2,
1995, the Fund had a Distribution Plan ('Class B Distribution
Plan') adopted pursuant to Rule 12b-1 under the Act. The Fund
pays for advertising, marketing and distributing Class B Shares,
at an annual rate of up to 0.50% of 1% of the value of the
Fund's Class
B Shares average daily net assets. Under the Distribution Plan,
the Fund may make payments to Service Agents (which may have
included First Chicago, Dreyfus, the former Distributor and
Premier) in respect of these services. The Fund determines the
amounts to be paid to Service Agents. Service Agents receive
such fees in respect of the average daily value of Class B
Shares owned by their clients.

For the period February 8, 1994 (initial offering date)
through December 2, 1995, $8 was charged to the Fund pursuant to
the Class B Distribution Plan, of which $8 was retained by
Dreyfus, the former Distributor and Premier.

(D) Prior to August 24, 1994, certain officers and trustees
of the Fund were 'affiliated persons,' as defined in the Act, of
First Chicago or Dreyfus. Each trustee who is not an 'affiliated
person' receives from the Fund an annual fee of $1,000 and an
attendance fee of $250 per meeting.

NOTE 4--SECURITIES TRANSACTIONS

The aggregate amount of purchases and sales (including
paydowns) of investment securities, excluding short-term
securities, during the year ended January 31, 1995, amounted to
$3,128,197 and $4,325,874, respectively.

At January 31, 1995, accumulated net unrealized depreciation
on investments was $95,570, consisting of $7,932 gross
unrealized appreciation and $103,502 gross unrealized
depreciation.

At January 31, 1995, the cost of investments for Federal
income tax purposes was substantially the same as the cost for
financial
reporting purposes (see Portfolio of Investments).

PRAIRIE INTERMEDIATE BOND FUND
- ---------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- ---------------------------------------------------------------

SHAREHOLDERS AND BOARD OF TRUSTEES
PRAIRIE INTERMEDIATE BOND FUND

We have audited the accompanying statement of assets and
liabilities of Prairie Intermediate Bond Fund, including the
portfolio of investments, as of January 31, 1995, and the
related
statement of operations for the year then ended, and the
statement
of changes in net assets and financial highlights for the year
then ended, and for the period March 5, 1993 (commencement of
operations) through January 31, 1994. 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 January 31, 1995 by correspondence with
the custodian.
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 Prairie Intermediate Bond
Fund
at January 31, 1995, the results of its operations for the year
then ended, the changes in its net assets and the financial
highlights for the year then ended and for the period March 5,
1993 through January 31, 1994, in conformity with generally
accepted accounting principles.

Ernst & Young LLP

New York, New York
March 15, 1995

<PAGE>

<TABLE>

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
February 28, 1995
- --------------------------------------------------------------------------------
<CAPTION>
Ratings
Moody's/ Principal
S&P Maturity Amount Value
Description (Unaudited) Rate Date (000) (Note 2(a))
- -------------------------------------- --------- ----- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS--95.0%
ALASKA--0.7%
Alaska Student Loan Corp., Student
Loan Revenue, State Assisted,
Series A (A.M.T.)................. A/A 5.50% 7/01/2004 $ 1,000 $ 958,340
North Slope Boro Refunding,
Series G (FSA Insured)............ Aaa/AAA 8.35% 6/30/1998 1,500 1,652,115
------------
2,610,455
------------
ARIZONA--2.1%
Arizona Educational Loan Marketing
Corp., Educational Loan Revenue,
Series A (MBIA Insured)........... Aaa/AAA 6.75% 9/01/1997 2,680 2,786,691
Maricopa County University School
District No. 41, Series C,
Collateralized by U.S. Government
Securities (Pre-refunded at 100 on
7/01/2004) (FGIC Insured)......... Aaa/AAA 6.10% 7/01/2014 2,000 2,115,000
Pima County Refunding, Series A..... Aa/A+ 5.00% 7/01/2002 3,000 2,958,150
------------
7,859,841
------------
CALIFORNIA--10.5%
California Health Facilities
Financing Authority Revenue
Refunding, Catholic Health
Facilities, Series B (AMBAC
Insured).......................... Aaa/AAA 4.70% 7/01/2003 2,250 2,104,942
California Health Facilities
Financing Authority Revenue
Refunding, Catholic Health
Facilities, Series B (AMBAC
Insured).......................... Aaa/AAA 4.50% 7/01/2002 3,000 2,774,370
California Health Facilities
Financing, St. Joseph's Health
Systems, Collateralized by U.S.
Government Securities
(Pre-refunded at 102 on
7/01/1999)........................ Aa/AA- 6.90% 7/01/2014 6,750 7,372,688
Central Valley Financing Authority,
Califcogeneration Project Revenue,
Carson Ice Generation Project..... NR/BBB- 5.50% 7/01/2001 975 957,050

See Notes to Financial Statements.

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- ---------------------------------------------------------------
PORTFOLIO OF INVESTMENTS-- (CONTINUED)
February 28, 1995
- ---------------------------------------------------------------

Ratings
Moody's/ Principal
S&P Maturity Amount Value
Description (Unaudited) Rate Date (000) (Note 2(a))
- -------------------------------------- --------- ----- ---------- ----------- ------------
CALIFORNIA (CONTINUED)
Central Valley Financing Authority,
Califcogeneration Project Revenue,
Carson Ice Generation Project..... NR/BBB- 5.40% 7/01/2000 $ 2,550 $ 2,506,931
East Bay Municipal Utilities
District Water Systems Revenue
Refunding (MBIA Insured).......... Aaa/AAA 4.40% 6/01/2000 1,875 1,779,300
Fresno Health Facilities Revenue,
Holy Cross Health Systems Corp.... A1/AA- 5.10% 12/01/2003 635 604,749
Fresno Health Facilities Revenue,
Holy Cross Health Systems Corp.... A1/AA- 5.10% 12/01/2003 1,570 1,495,205
Fresno Health Facilities Revenue,
Holy Cross Health Systems Corp.... A1/AA- 5.00% 12/01/2002 1,500 1,432,950
Los Angeles Wastewater Systems
Revenue, Series A (MBIA
Insured).......................... Aaa/AAA 8.50% 6/01/2000 1,770 2,033,730
MSR Public Power Agency California,
San Juan Project Revenue
Refunding, Series F (AMBAC
Insured).......................... Aaa/AAA 5.55% 7/01/2002 1,615 1,642,100
Northern California Power Agency,
Public Power Refunding, Series
B-1, Collateralized by U.S.
Government Securities
(Pre-refunded at 100
on 7/01/1998)..................... NR/AAA 8.00% 7/01/2024 6,750 7,406,707
Santa Clara County Certificates of
Participation, American Baptist
Homes West, Collateralized by U.S.
Government Securities
(Pre-refunded at 102 on
3/01/1998)........................ NR/AAA 8.00% 3/01/2018 1,000 1,107,170
University of California Revenue
Refunding, Multiple Purpose (MBIA
Insured).......................... Aaa/AAA 6.20% 9/01/2001 6,675 7,024,503
------------
40,242,395
------------
COLORADO--4.1%
Adams County Single Family Mortgage
Revenue, Series A, Collateralized
by U.S. Government Securities..... Aaa/NR 8.875% 8/01/2003 1,230 1,527,512

See Notes to Financial Statements.

Denver City & County Water
Refunding......................... Aa/AA 7.00% 10/01/1999 $ 8,665 $ 9,338,184
Denver Metropolitan Major League
Baseball Stadium Revenue
Refunding, Sales Tax, Baseball
Stadium Project (FGIC Insured).... Aaa/AAA 4.60% 10/01/2005 1,000 915,610
Poudre Valley Hospital District
Revenue, Collateralized by U.S.
Government Securities
(Pre-refunded at 101 on
12/01/2001) (AMBAC Insured)....... Aaa/AAA 6.625% 12/01/2011 3,750 4,090,763
------------
15,872,069
------------
DISTRICT OF COLUMBIA--1.7%
District of Columbia, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 102 on
6/01/2000)........................ Aaa/AAA 7.25% 6/01/2005 1,125 1,251,090
District of Columbia Hospital
Revenue, Washington Hospital
Center Corp. Issue, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 102 on
1/01/2001)........................ NR/BBB 8.75% 1/01/2015 2,750 3,276,817
District of Columbia Refunding,
Series A-1 (MBIA Insured)......... Aaa/AAA 4.85% 6/01/2004 780 707,608
District of Columbia Refunding,
Series A-1 (MBIA Insured)......... Aaa/AAA 4.65% 6/01/2002 1,500 1,369,710
------------
6,605,225
------------
FLORIDA--1.4%
Florida State Board of Education
Capital Outlay, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 102 on
6/01/2000)........................ Aaa/AAA 7.25% 6/01/2023 4,620 5,168,486
------------
See Notes to Financial Statements.

Georgia State General Obligation,
Series F.......................... Aaa/AAA 6.50% 12/01/2004 $ 1,500 $ 1,644,000
Georgia State General Obligation,
Series F.......................... Aaa/AAA 6.50% 12/01/2005 1,000 1,099,050
------------
2,743,050
------------
HAWAII--2.4%
Hawaii State Department of Budget &
Finance Special Purpose Mortgage
Revenue, Kapiolani Healthcare
System............................ A/A 5.60% 7/01/2002 2,065 2,017,526
Hawaii State Refunding, Series C.... Aa/AA 4.25% 7/01/1999 7,500 7,172,400
------------
9,189,926
------------
ILLINOIS--8.4%
Chicago Motor Fuel Tax Revenue
(AMBAC Insured)................... Aaa/AAA 6.50% 1/01/1999 1,000 1,045,000
Chicago Public Community Building
Revenue, Series A (MBIA
Insured).......................... Aaa/AAA 4.90% 12/01/2001 3,000 2,915,730
Cook County Community College
District No. 508, Chicago
Certificates of Participation
(FGIC Insured).................... Aaa/AAA 8.10% 1/01/1999 1,000 1,102,990
Illinois Health Facilities Authority
Revenue Refunding,
Illinois Masonic Medical Center... A/A- 5.20% 10/01/2003 750 701,993
Illinois Health Facilities Authority
Revenue Refunding,
Illinois Masonic Medical Center... A/A- 5.10% 10/01/2002 1,180 1,109,755
Illinois Health Facilities Authority
Revenue Refunding,
Illinois Masonic Medical Center... A/A- 5.00% 10/01/2001 1,120 1,058,523
Illinois Health Facilities Authority
Revenue Refunding,
Illinois Masonic Medical Center... A/A- 4.90% 10/01/2000 825 782,380
Illinois Health Facilities Authority
Revenue Refunding & Improvement,
Swedish Covenant, Series A........ NR/A- 6.10% 8/01/2008 1,000 970,560

See Notes to Financial Statements.

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS-- (CONTINUED)
February 28, 1995
- --------------------------------------------------------------------------------
Ratings
Moody's/ Principal
S&P Maturity Amount Value
Description (Unaudited) Rate Date (000) (Note 2(a))
- -------------------------------------- --------- ----- ---------- ----------- ------------
ILLINOIS (CONTINUED)

Illinois State Sales Tax Revenue
Refunding, Series Q............... A1/AAA 5.75% 6/15/2014 $ 7,000 $ 6,704,390
Metropolitan Pier & Exposition
Authority, Illinois Dedicated
State Tax Revenue................. A/A+ 6.40% 6/01/2003 10,495 11,085,554
Oak Forest General Obligation....... A/NR 6.90% 12/01/1995* 250 253,673
Peoria Motor Fuel Tax Revenue....... NR/A+ 6.90% 1/01/1998 200 209,554
Regional Transportation Authority,
Series A (AMBAC Insured).......... Aaa/AAA 8.00% 6/01/2003 2,785 3,274,157
Regional Transportation Authority,
Series A (AMBAC Insured).......... Aaa/AAA 8.00% 6/01/2003 950 1,116,858
------------
32,331,117
------------
INDIANA--2.9%
Indiana Bond Bank, Special Program,
Series A-2........................ A/NR 4.85% 11/01/2003 660 609,609
Indiana Bond Bank, Special Program,
Series A-2........................ A/NR 4.75% 11/01/2002 375 346,909
Indiana Bond Bank, Special Program,
Series A-2........................ A/NR 4.65% 11/01/2001 375 347,846
Indiana Bond Bank Revenue Guarantee,
State Revolving Fund Program,
Series A.......................... NR/A 5.80% 2/01/2002 500 504,505
Indiana Bond Bank Revenue Guarantee,
State Revolving Fund Program,
Series A.......................... NR/A 5.60% 2/01/2005 700 683,844
Indiana State Office Community
Building Capital Complex Revenue
Refunding, State Office Building
11 Facilities, Series D........... A1/A+ 6.50% 7/01/1999 3,000 3,101,340
Indianapolis Economic Development,
Water Facilities Revenue
Refunding, Indianapolis Water Co.
Project........................... A1/A+ 5.20% 5/01/2001 5,810 5,663,007
------------
11,257,060
------------
IOWA--0.8%
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue, Series A.... Aa1/NR 6.00% 3/01/1998 3,000 3,059,340
------------
See Notes to Financial Statements.

Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Refunding, 1st Stage Loop Inc.,
Series B.......................... A3/A 6.00% 9/01/2001 $ 5,665 $ 5,824,356
Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Refunding, 1st Stage Loop Inc.,
Series B.......................... A3/A 5.85% 9/01/2000 3,750 3,824,100
Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Refunding, 1st Stage Loop Inc.,
Series B.......................... A3/A 5.20% 9/01/1997 2,250 2,247,367
------------
11,895,823
------------
MARYLAND--1.6%
Maryland State, Capital Improvement
& Refunding....................... Aaa/AAA 4.90% 10/15/2003 3,825 3,748,347
Maryland State General Obligation,
Fourth Series..................... Aaa/AAA 6.55% 10/15/1997 2,160 2,261,714
------------
6,010,061
------------
MASSACHUSETTS--5.0%
Massachusetts Bay Transportation
Authority, General Transportation
Systems, Series A, Collateralized
by U.S. Government
Securities (Pre-refunded at
102 on 3/01/2001)................. Aaa/A+ 7.00% 3/01/2022 3,500 3,884,440
Massachusetts State General
Obligation, Series B.............. A/A+ 9.25% 7/01/2000 2,250 2,667,690
Massachusetts State Refunding,
Series C.......................... A1/A+ 4.90% 8/01/2004 2,200 2,102,254
Massachusetts State Water Resource
Authority, Series C............... A/A 6.00% 12/01/2011 10,480 10,533,867
------------
19,188,251
------------
MINNESOTA--0.4%
Minneapolis Refunding, Series A..... Aaa/AAA 4.25% 12/01/1999 1,500 1,433,805
------------

See Notes to Financial Statements.

Clark County General Obligation..... A1/A+ 7.00% 9/01/2000 $ 6,705 $ 7,266,611
Las Vegas Refunding................. A1/A 6.40% 10/01/2003 2,250 2,380,702
Nevada State General Obligation,
Series A.......................... Aa/AA 6.00% 5/01/2002 1,000 1,041,240
Nevada State General Obligation,
Series C.......................... Aa/AA 5.90% 4/01/2001 1,000 1,033,450
Nevada State Municipal Bond Bank,
Project No. R-5, Series A......... Aa/AA 4.50% 11/01/2002 1,020 949,192
------------
12,671,195
------------
NEW YORK--9.9%
New York City Municipal Water
Financing Authority, Water & Sewer
Systems Revenue, Series C,
Collateralized by U.S. Government
Securities (Pre-refunded at 101.5
on 6/15/2001) (FGIC Insured)...... Aaa/AAA 7.00% 6/15/2016 3,695 4,115,380
New York State Environmental
Facilities Corp., Pollution
Control Revenue, State Water
Revolving Fund, Series D.......... Aaa/AAA 6.20% 11/15/2004 1,875 1,985,588
New York State Environmental
Facilities Corp., Pollution
Control Revenue, State Water
Revolving Fund, Series D.......... Aaa/AAA 6.10% 5/15/2003 4,110 4,305,348
New York State Local Assistance
Corp., Series A, Collateralized by
U.S. Government Securities
(Pre-refunded at 102 on
4/01/2001)........................ Aaa/AAA 7.25% 4/01/2018 2,250 2,537,325
New York State Local Assistance
Corp., Series B, Collateralized by
U.S. Government Securities
(Pre-refunded at 102 on
4/01/2001)........................ Aaa/AAA 7.50% 4/01/2020 4,255 4,853,508
New York State Local Assistance
Corp., Series C, Collateralized by
U.S. Government Securities
(Pre-refunded at 102 on
4/01/2001)........................ Aaa/AAA 7.00% 4/01/2021 825 919,660

See Notes to Financial Statements.

New York State Thruway Authority,
Highway & Bridge Traffic Fund,
Series A.......................... A/A- 6.00% 4/01/1999 $17,025 $ 17,520,087
Triborough Bridge & Tunnel
Authority, New York Revenue,
Series R, Collateralized by U.S.
Government Securities
(Pre-refunded at 100 on
1/01/2000)........................ Aaa/AAA 6.00% 1/01/2020 1,500 1,563,675
------------
37,800,571
------------
OHIO--0.4%
Ohio State Building Authority,
Toledo Government Center, Series
A................................. A1/A+ 8.70% 10/01/1999 1,500 1,578,450
------------

OKLAHOMA--0.9%
Oklahoma State Industrial Authority
Revenue, Hospital Refunding, St.
Anthony's Hospital, Series A (MBIA
Insured).......................... Aaa/AAA 7.30% 10/01/2000 3,315 3,434,937
------------

PENNSYLVANIA--15.8%
Geisinger Health Systems Authority,
Series A.......................... Aa/AA 5.50% 7/01/2003 2,895 2,875,661
Pennsylvania Intergovernmental
Cooperative Authority, Special Tax
Revenue, City of Philadelphia
Funding Program, Collateralized by
U.S. Government Securities
(Pre-refunded at 100 on
6/15/2002)........................ Aaa/NR 6.80% 6/15/2022 9,375 10,281,188
Pennsylvania Intergovernmental
Cooperative Authority, Special Tax
Revenue, City of Philadelphia
Funding Program (FGIC Insured).... Aaa/AA 6.00% 6/15/2000 7,500 7,728,525
Pennsylvania State Refunding &
Projects, First Series............ A1/AA- 10.00% 4/15/1998 19,000 21,671,970
Philadelphia Gas Works Revenue,
14th Series....................... Aaa/AAA 6.00% 7/01/2002 12,090 13,179,672

See Notes to Financial Statements.

Philadelphia Gas Works Revenue,
14th Series....................... Baa1/BBB 5.50% 7/01/2003 $ 3,000 $ 2,937,630
Philadelphia Gas Works Revenue,
14th Series (FSA Insured)......... Aaa/AAA 4.90% 8/01/2002 1,765 1,704,196
------------
60,378,842
------------
TENNESSEE--0.6%
Bristol Health & Educational
Facilities Refunding, Bristol
Memorial Hospital (FGIC
Insured).......................... Aaa/AAA 6.75% 9/01/2007 2,140 2,363,266
------------

TEXAS--6.0%
Brazos River Authority, Pollution
Control Revenue Collection, Texas
Electric Utilities (FGIC
Insured).......................... Aaa/AAA 8.25% 12/01/2016 500 537,715
Dallas Independent School District,
Collateralized by U.S. Government
Securities........................ Aaa/AAA 8.70% 8/01/2000 1,000 1,170,220
Humble Independent School District
Refunding (PSFG Insured).......... Aaa/AAA 6.00% 2/15/2004 2,035 2,116,461
Round Rock Independent School
District Refunding (PSFG
Insured).......................... Aaa/AAA 5.25% 2/15/2006 5,555 5,432,679
Texas State Public Financing
Authority,
Series A.......................... Aa/AA.... 8.00% 10/01/1997 7,695 8,285,899
Texas State Public Financing
Authority, Series A............... Aa/AA 8.00% 10/01/1999 1,000 1,119,910
Texas State Public Financing
Authority, Series A............... Aa/AA 6.50% 10/01/2004 4,100 4,465,966
------------
23,128,850
------------
VIRGINIA--1.8%
Fairfax County Refunding, Series
A................................. Aaa/AAA 4.80% 6/01/2002 5,250 5,123,948
Virginia Beach Public Improvement,
Series A.......................... Aa/AA 6.85% 5/01/1999 1,575 1,684,022
------------
6,807,970
------------

See Notes to Financial Statements.

Chelan County Public Utility
District No. 001 Conservation
Revenue, Chelan Hydro, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 100 on
6/01/2004)........................ Aaa/A+ 6.95% 6/01/2067 $ 4,275 $ 4,758,887
Kings County General Obligation,
Series A.......................... Aa1/AA+ 9.00% 12/01/1999 1,200 1,393,980
Snohomish County Public Utilities
District No. 001, Electric Revenue
Generation System, Series B
(A.M.T.).......................... A1/A+ 5.15% 1/01/2003 1,280 1,214,925
Snohomish County, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 100 on
12/01/1999)....................... NR/NR 7.10% 12/01/1999 1,415 1,538,048
Washington State Public Power Supply
Systems, Nuclear Project No. 1,
Series A, Collateralized by U.S.
Government Securities
(Pre-refunded at 102 on 7/01/1999)
(MBIA Insured).................... Aaa/AAA 7.50% 7/01/2015 1,420 1,580,375
------------
10,486,215
------------
WEST VIRGINIA--1.7%
Pleasants County Pollution Control
Revenue Refunding, Monogahela
Power Co., Series B............... A1/NR 6.875% 4/01/1998 6,105 6,362,204
------------

WISCONSIN--6.1%
Wisconsin State General Obligation,
Series B.......................... Aa/AA 7.00% 5/01/2001 3,950 4,305,816
Wisconsin State General Obligation,
Series B.......................... Aa/AA 7.00% 5/01/2002 4,155 4,569,004
Wisconsin State General Obligation,
Series B.......................... Aa/AA 7.00% 5/01/2003 4,625 5,124,500
Wisconsin State Refunding........... Aa/AA 6.00% 5/01/2003 4,500 4,721,580

See Notes to Financial Statements.

Wisconsin State Refunding, Series
3................................. Aa/AA 4.25% 11/01/1999 $ 4,895 $ 4,666,746
------------
23,387,646
------------
TOTAL MUNICIPAL BONDS
(COST $360,756,795)................. 363,867,050
------------

SHORT-TERM INVESTMENTS--1.0%
IOWA--0.1%
Des Moines Methodist System Inc.,
Hospital Facilities Revenue, Iowa
Methodist Medical Center
Project**......................... A1/NR 4.10% 3/07/1995 325 325,000
------------

ILLINOIS--0.3%
Illinois Health Facilities Authority
Revenue, Healthcorp Affiliates,
Series B (LC--Fuji Bank, Expires
7/01/1995)**...................... A1/NR 4.10% 3/07/1995 500 500,000
Illinois Health Facilities Authority
Revenue, Memorial Medical Center,
Series C (LC--Fuji Bank, Expires
10/31/1996)**..................... A1/NR 4.00% 3/07/1995 500 500,000
------------
1,000,000
------------
INDIANA--0.1%
Indiana Health Facilities Financing
Authority Revenue, Capital Access
Designated Pool (LC--Comerica
Bank, Expires 12/15/1999)**....... A1/NR 4.10% 3/07/1995 500 500,000
------------

MASSACHUSETTS--0.2%
Massachusetts State General
Obligation, Series D**............ Aa1/AA- 3.60% 3/07/1995 700 700,000
------------

See Notes to Financial Statements.

Michigan State Hospital Financing
Authority Revenue Adjustment,
Hospital Equipment Loan Program,
Series A (LC--First of America
Bank, Expires 3/15/2005)**........ A1/NR 4.10% 3/07/1995 $ 500 $ 500,000
------------

WASHINGTON--0.2%
Washington State Community Economy,
Series 1988-3 (LC-- Industrial
Bank of Japan, Ltd., Expires
7/11/1996) (A.M.T.)**............. Aa3/NR 4.25% 3/07/1995 355 355,000
Washington State Community Economy,
Series 1**........................ Aa3/NR 4.25% 3/07/1995 290 290,000
------------
645,000
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $3,670,000)................... 3,670,000
------------
TOTAL INVESTMENTS
(COST $364,426,795)--96.0%.......... 367,537,050
Other assets in excess of
liabilities-- 4.0%.................. 15,512,031
------------
NET ASSETS--100%...................... $383,049,081
------------
------------
- ------------------

AMBAC -American Municipal Bond Assurance Corporation.
A.M.T. -Subject to Alternative Minimum Tax.
FGIC -Financial Guaranty Insurance Company.
FSA -Financial Security Assurance.
LC -Letter of Credit.
MBIA -MBIA Insurance Corporation.
NR -No rating available.
PSFG -Permanent School Fund Guaranty.
* Mandatory Redemption Date.
** Variable rate security. Interest rates stated are as of February 28, 1995. Maturity date
reflects the later of the next rate change date or the next put date.

See Notes to Financial Statements.

</TABLE>

<TABLE>

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
February 28, 1995
- --------------------------------------------------------------------------------
<CAPTION>

Ratings
Moody's/ Principal
S&P Maturity Amount Value
Description (Unaudited) Rate Date (000) (Note 2(a))
- ---------------------------------------- ----------- ------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS--94.7%
ALASKA--1.9%
Alaska State Housing Finance Corp.
Refunding, Series A................. Aa/A+ 5.40% 12/01/2023 $ 4,000 $ 3,389,160
Alaska Student Loan Corp., Student
Loan Revenue, State Assisted, Series
A (AMBAC Insured) (A.M.T.).......... Aaa/AAA 6.125% 7/01/2005 800 819,608
------------
4,208,768
------------
CALIFORNIA--14.3%
California Educational Facilities
Authority Revenue, Loyola Marymount
University.......................... A1/NR 5.75% 10/01/2024 4,400 4,035,680
Central Valley Financing Authority,
Califcogeneration Project Revenue,
Carson Ice Generation Project....... NR/BBB- 6.00% 7/01/2009 2,400 2,325,816
Cupertino Certificates of
Participation,
Open Space Acquisition Project,
Collateralized by U.S. Government
Securities (Pre-refunded at 102 on
4/01/2001).......................... NR/NR 7.125% 4/01/2016 2,940 3,296,387
Fresno Health Facilities Revenue,
Holy Cross Health System Corp....... A1/AA- 5.25% 12/01/2005 1,850 1,743,792
Fresno Health Facilities Revenue,
Holy Cross Health System Corp....... A1/AA- 5.25% 12/01/2005 565 532,563
Los Angeles Wastewater Systems
Revenue, Series D, Collateralized by
U.S. Government Securities
(Pre-refunded at 102 on 12/01/2000)
(MBIA Insured)...................... Aaa/AAA 6.70% 12/01/2021 8,000 8,784,320
Northern California Power Agency,
Public Power Revenue Refunding,
Geothermal Project No. 3, Series
A................................... A/A- 5.80% 7/01/2009 4,000 3,841,720
Northern California Power Agency,
Public Power Revenue Refunding,
Geothermal Project No. 3, Series
A................................... A/A- 5.65% 7/01/2007 4,800 4,534,608

See Notes to Financial Statements.

Northern California Power Agency,
Public Power Revenue Refunding,
Geothermal Project No. 3, Series
A................................... A/A- 5.60% 7/01/2006 $ 3,600 $ 3,417,156
------------
32,512,042
------------
COLORADO--1.3%
Adams County Single Family Mortgage
Revenue, Series A, Collateralized by
U.S. Government Securities.......... NR/NR 8.875% 8/01/2003 300 372,564
Denver Metropolitan Major League
Baseball Stadium District Revenue
Refunding, Sales Tax, Baseball
Stadium Project (FGIC Insured)...... Aaa/AAA 4.60% 10/01/2005 1,200 1,098,732
Denver Metropolitan Major League
Baseball Stadium District Revenue
Refunding, Sales Tax, Baseball
Stadium Project (FGIC Insured)...... Aaa/AAA 4.50% 10/01/2004 1,600 1,461,760
------------
2,933,056
------------
CONNECTICUT--1.6%
Connecticut State Resource Recovery
Authority, Connecticut System Bonds,
Series B (MBIA Insured)............. Aaa/AAA 7.875% 11/15/2012 3,435 3,665,420
------------

DISTRICT OF COLUMBIA--0.1%
District of Columbia, Series A,
Collateralized by U.S. Government
Securities (Pre-refunded at 102 on
6/01/1999) (AMBAC Insured).......... Aaa/AAA 7.25% 6/01/2002 200 220,126
------------

FLORIDA--0.8%
Broward County Educational Facilities
Authority Revenue, Nova Southeastern
University Project (Connie Lee
Insured)............................ NR/AAA 5.70% 4/01/2005 1,440 1,432,282

See Notes to Financial Statements.

Jacksonville Guaranteed Entitlement
Revenue Refunding, Series A
(AMBAC Insured)..................... Aaa/AAA 5.60% 10/01/2003 $ 300 $ 309,681
------------
1,741,963
------------
GEORGIA--0.5%
Georgia State General Obligation,
Series F............................ Aaa/AA+ 6.50% 12/01/2005 1,000 1,099,050
------------

ILLINOIS--12.3%
Chicago Gas Supply Revenue,
Peoples Gas Light Co., Series A
(AMBAC Insured) (A.M.T.)............ Aaa/AAA 5.75% 12/01/2023 9,600 8,759,808
Chicago Motor Fuel Tax Revenue
Refunding (AMBAC Insured)........... Aaa/AAA 6.125% 1/01/2009 3,660 3,785,904
Chicago Wastewater Transmission
Revenue, Collateralized by U.S.
Government Securities (Pre-refunded
at 102 on 11/15/2000) (FGIC
Insured)............................ Aaa/AAA 6.75% 11/15/2020 290 318,385
Illinois Development Finance
Authority, Pollution Control Revenue
Refunding, Central Illinois Public
Services Co., Series A.............. Aa2/AA 6.375% 1/01/2028 800 799,360
Illinois Health Facilities Authority
Revenue Refunding, Bro Menn
Healthcare (FGIC Insured)........... Aaa/AAA 6.00% 8/15/2005 1,000 1,015,490
Illinois Health Facilities Authority
Revenue Refunding, Evangelical
Hospitals, Series A (FGIC
Insured)............................ Aaa/AAA 6.00% 4/15/2000 275 282,285
Illinois Health Facilities Authority
Revenue Refunding, Illinois Masonic
Medical Center...................... A/A- 5.40% 10/01/2005 865 792,279
Illinois Health Facilities Authority
Revenue Refunding & Improvement,
Swedish Covenant, Series A.......... NR/A- 6.30% 8/01/2013 2,700 2,534,976
Illinois Health Facilities Authority
Revenue Refunding & Improvement,
Swedish Covenant, Series A.......... NR/A- 6.10% 8/01/2008 2,600 2,523,456

See Notes to Financial Statements.

Illinois State Sales Tax Revenue
Refunding, Series Q................. A1/AAA 6.00% 6/15/2009 $ 2,400 $ 2,448,288
Regional Transportation Authority,
Series A (AMBAC Insured)............ Aaa/AAA 6.125% 6/01/2022 300 298,977
Regional Transportation Authority,
Series B (AMBAC Insured)............ Aaa/AAA 8.00% 6/01/2003 250 293,910
Winnebago & Boone Counties School
District No. 205 (CGIC Insured)..... Aaa/AAA 7.35% 2/01/2004 3,680 4,149,347
------------
28,002,465
------------
INDIANA--1.0%
Indiana Bond Bank, Special Program,
Series A-2.......................... A/NR 4.95% 11/01/2004 520 479,596
Indiana Health Facilities Financing
Authority, Hospital Revenue
Refunding, Columbus Regional
Hospital
(CGIC Insured)...................... Aaa/AAA 5.25% 8/15/2004 400 392,108
Indiana Transmission Financing
Authority, Highway Revenue, Series
A................................... A1/A+ 6.80% 12/01/2016 1,200 1,314,096
------------
2,185,800
------------
IOWA--3.9%
Dubuque Hospital Facilities Revenue
Refunding, Finley Hospital.......... NR/A- 5.60% 1/01/2007 595 555,373
Dubuque Hospital Facilities Revenue
Refunding, Finley Hospital.......... NR/A- 5.50% 1/01/2006 565 526,670
Dubuque Hospital Facilities Revenue
Refunding, Finley Hospital.......... NR/A- 5.40% 1/01/2005 535 498,914
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue, Series B
(A.M.T.)............................ Aa1/NR 6.75% 3/01/2004 4,160 4,395,373
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue, Series C
(A.M.T.)............................ Aa1/NR 6.80% 3/01/2005 2,800 2,910,684
------------
8,887,014
------------

See Notes to Financial Statements.

Lafourche Parish Hospital Services
District No. 003, Hospital
Revenue............................. Baa1/NR 5.50% 10/01/2004 $ 420 $ 388,248
Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Refunding, 1st Stage Loop Inc.,
Series B............................ A3/A 6.25% 9/01/2004 6,800 7,091,788
Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Refunding, 1st Stage Loop Inc.,
Series B............................ A3/A 6.20% 9/01/2003 8,000 8,332,240
------------
15,812,276
------------
MAINE--2.5%
Maine State Housing Authority
Mortgage, Series A.................. A1/AA- 5.65% 11/15/2020 6,400 5,753,280
------------

MASSACHUSETTS--9.4%
Massachusetts Bay Transportation
Authority Systems, Series C
(FGIC Insured)...................... Aaa/AAA 6.10% 3/01/2023 400 401,368
Massachusetts Municipal Electric Co.,
Power Supply Systems Revenue, Series
B................................... A/BBB+ 6.625% 7/01/2003 4,535 4,770,004
Massachusetts State Refunding,
Series B............................ A1/A+ 5.40% 11/01/2006 1,730 1,706,299
Massachusetts State Refunding,
Series B............................ A1/A+ 5.30% 11/01/2005 2,300 2,268,490
Massachusetts State Water Resource
Authority, Series A, Collateralized
by U.S. Government Securities
(Pre-refunded at 102 on
12/01/2001)......................... Aaa/AAA 6.50% 12/01/2019 4,000 4,366,040
New England Educational Loan Marketing
Corp., Massachusetts Student Loan
Revenue Refunding, Series G......... A1/A- 5.20% 8/01/2002 8,000 7,727,360
------------
21,239,561
------------

See Notes to Financial Statements.

Michigan State Hospital Financing
Authority, Five Sisters of Mercy
Health Corp., Series J,
Collateralized by U.S. Government
Securities
(Pre-refunded at 102 on
2/15/2001).......................... NR/A 7.375% 2/15/2011 $ 3,600 $ 4,034,232
------------

MINNESOTA--3.5%
Minnesota State Refunding............. Aa1/AA+ 5.25% 8/01/2005 8,000 7,967,920
------------

MISSOURI--1.6%
Sikeston Electric Revenue Refunding
(MBIA Insured)...................... Aaa/AAA 6.00% 6/01/2005 3,460 3,615,977
------------

NEVADA--2.2%
Churchill County Healthcare Facilities
Revenue, Western Health Network,
Series A (MBIA Insured)............. Aaa/AAA 5.80% 1/01/2006 200 204,342
Clark County Industrial Development
Revenue Refunding, Nevada Power Co.
Project, Series C
(AMBAC Insured)..................... Aaa/AAA 7.20% 10/01/2022 4,115 4,430,415
Henderson Sewer, Collateralized by
U.S. Government Securities
(Pre-refunded at 102 on 1/01/1999)
(MBIA Insured)...................... Aaa/AAA 7.20% 1/01/2007 325 353,984
------------
4,988,741
------------
NEW YORK--6.4%
New York State Local Assistance Corp.,
Series B, Collateralized by U.S.
Government Securities
(Pre-refunded at 102 on
4/01/2001).......................... Aaa/AAA 7.50% 4/01/2020 4,000 4,562,640
New York State Local Assistance Corp.
Refunding, Series C................. A/A 5.50% 4/01/2017 4,800 4,452,720
New York State Local Assistance Corp.
Refunding, Series E................. A/A 6.00% 4/01/2014 5,600 5,593,280
------------
14,608,640
------------

See Notes to Financial Statements.

Columbus School District, 144A
(Private Placement, Restricted sales
to Institutional Investors)......... NR/NR 9.39% 5/01/1997 $ 1,053 $ 1,086,792
Ohio State Highway, Series T.......... Aa/AAA 4.80% 5/15/2002 1,600 1,556,160
------------
2,642,952
------------
OKLAHOMA--1.5%
Oklahoma State Industrial Authority
Revenue Refunding, Health
Facilities, Sisters of Mercy, Series
A................................... Aa/AA 5.20% 6/01/2005 3,600 3,510,360
------------

PENNSYLVANIA--0.9%
Philadelphia Gas Works Revenue,
Fifteenth Series (FSA Insured).... Aaa/AAA 5.125% 8/01/2005 1,220 1,167,211
Philadelphia Gas Works Revenue,
Fifteenth Series (FSA Insured).... Aaa/AAA 5.10% 8/01/2004 700 682,094
Philadelphia Gas Works Revenue,
Fifteenth Series (FSA Insured).... Aaa/AAA 5.00% 8/01/2003 150 145,974
------------
1,995,279
------------
RHODE ISLAND--5.1%
Pawtucket General Obligation
(FGIC Insured)...................... Aaa/AAA 5.25% 4/15/2000 240 239,664
Rhode Island Depositors Economic
Protection Corp., Series A
(FSA and MBIA Insured).............. Aaa/AAA 6.40% 8/01/2006 5,820 6,188,464
Rhode Island Depositors Economic
Protection Corp., Series A
(FSA and MBIA Insured).............. Aaa/AAA 6.30% 8/01/2005 4,640 4,912,414
Rhode Island State Conservation
Capital Development Loan, Series B
(FGIC Insured)...................... Aaa/AAA 6.00% 5/15/2002 190 196,259
------------
11,536,801
------------
TENNESSEE--0.8%
Bristol Health & Educational
Facilities Refunding, Bristol
Memorial Hospital (FGIC Insured).... Aaa/AAA 6.75% 9/01/2007 300 331,299

See Notes to Financial Statements.

Knox County Health, Educational &
Housing Facilities Board, Hospital
Facilities Revenue Refunding,
Fort Sanders Alliance
(MBIA Insured)...................... Aaa/AAA 7.25% 1/01/2009 $ 1,360 $ 1,555,554
------------
1,886,853
------------
TEXAS--8.8%
Brazos River Authority, Pollution
Control Revenue Collection, Texas
Electric Utilities (FGIC Insured)
(A.M.T.)............................ Aaa/AAA 8.25% 12/01/2016 2,615 2,812,250
Texas City Industrial Development
Corp., Marine Terminal Revenue
Refunding, Arco Pipe Line Co.
Project............................. A1/A 7.375% 10/01/2020 4,000 4,548,200
Texas State College Student Loan
(A.M.T.)............................ Aa/AA 6.50% 8/01/2007 3,200 3,331,424
Texas State Public Finance Authority,
Series A............................ Aa/AA 8.00% 10/01/1999 8,275 9,267,255
------------
19,959,129
------------
VIRGINIA--0.5%
Virginia State Public School
Authority, Series B................. Aa/AA 6.00% 8/01/2004 1,175 1,236,229
------------

WASHINGTON--0.3%
Snohomish County Public Utilities
District No. 001, Electric Revenue
Generation Systems, Series B
(A.M.T.)............................ A1/A+ 5.25% 1/01/2004 800 756,072
------------

WISCONSIN--3.1%
Kaukuna Pollution Control Revenue
Refunding, International Paper Co.
Project, Series A................... A3/A- 5.40% 5/01/2004 2,885 2,734,720
Wisconsin State General Obligation,
Series B............................ Aa/AA 5.50% 5/01/2009 4,160 4,044,019

See Notes to Financial Statements.

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS-- (CONTINUED)
February 28, 1995
- --------------------------------------------------------------------------------
Ratings
Moody's/ Principal
S&P Maturity Amount Value
Description (Unaudited) Rate Date (000) (Note 2(a))
- ---------------------------------------- ----------- ------- ---------- --------- ------------
WISCONSIN (CONTINUED)

Wisconsin State Health & Education,
Marquette University Project
(MBIA Insured)...................... Aaa/AAA 5.50% 12/01/2005 $ 300 $ 298,047
------------
7,076,786
------------
WYOMING--0.4%
Wyoming Community Development
Authority Single Family, Series D
(FHA/VA Mortgage Insured)........... Aa/AA 7.60% 6/01/2017 800 848,328
------------
TOTAL MUNICIPAL BONDS
(COST $212,292,812)................... 214,925,120
------------

SHORT-TERM INVESTMENTS--3.8%
MICHIGAN--0.1%
Michigan State Hospital Financing
Authority Revenue Adjustment,
Hospital Equipment Loan Program,
Series A (LC--First of America,
Michigan, Expires 3/15/2005)*....... A1/NR 4.10% 3/07/1995 300 300,000
------------
OREGON--2.2%
Port of Portland Pollution Control,
Reynolds Metals (LC--Bank of Nova
Scotia, Expires 4/01/1997)*......... Aa3/NR 3.75% 3/01/1995 3,700 3,700,000
Umatilla County, Hospital Facilities
Authority, Hospital Revenue,
Franciscan Health Systems, Series B
(LC--Societe Generale,
Expires 8/01/1997)*................. Aa2/AA 3.75% 3/01/1995 1,300 1,300,000
------------
5,000,000
------------
WASHINGTON--1.3%
Washington State Healthcare Facilities
Authority Revenue, Fred Hutchinson
Cancer, Series C (LC--Morgan
Guaranty Trust, Expires
1/31/1998)*......................... Aa1/NR 3.80% 3/01/1995 1,500 1,500,000

See Notes to Financial Statements.

Washington State Healthcare Facilities
Authority Revenue, Fred Hutchinson
Cancer, Series B (LC--Morgan
Guaranty Trust, Expires
1/31/1998)*......................... Aa1/NR 3.80% 3/01/1995 $ 1,400 $ 1,400,000
------------
2,900,000
------------
WISCONSIN--0.2%
Wisconsin State Health Facilities
Authority Revenue, Franciscan
Healthcare, Series A-1 (LC--Toronto
Dominion Bank, Expires
12/31/1998)*........................ Aa2/AA+ 4.05% 3/07/1995 400 400,000
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $8,600,000)..................... 8,600,000
------------
TOTAL INVESTMENTS
(COST $220,892,812)--98.5%............ 223,525,120
Other assets in excess of
liabilities--1.5%..................... 3,457,083
------------
NET ASSETS--100.0%...................... $226,982,203
------------
------------
- ------------------

AMBAC -American Municipal Bond Assurance Corporation.
A.M.T. -Subject to Alternative Minimum Tax.
CGIC -Capital Guaranty Insurance Corporation.
FGIC -Financial Guaranty Insurance Company.
FHA/VA -Federal Housing Association/Veterans Administration.
FSA -Financial Security Assurance.
LC -Letter of Credit.
MBIA -MBIA Insurance Corporation.
NR -No rating available.

* Variable rate security. Interest rates stated are as of February 28, 1995.
Maturity date reflects the later of the next rate change date or the next put
date.

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995
- --------------------------------------------------------------------------------
<CAPTION>

Prairie Intermediate
Municipal
Prairie Municipal
Bond Fund
Bond Fund, Inc.
--------------------
- -----------------
<S> <C> <C>
ASSETS:
Investments in securities, at
value
(cost $364,426,795 and
$220,892,812, respectively).... $367,537,050 $ 223,525,120
Cash............................. 12,232,344 134,826
Receivable for investment
securities sold................ 26,983,352 --
Interest receivable.............. 7,394,947 3,669,374
Receivable for Fund shares
sold........................... 218,402 159,000
Receivable from adviser.......... 65,232 72,516
Prepaid expenses--Note 2(f)...... 121,290 18,821
-------------------- -----------------
Total Assets.............. 414,552,617 227,579,657
-------------------- -----------------
LIABILITIES:
Administration fees payable...... 10,048 5,785
Shareholder servicing fees
payable
(Class A Shares and Class B
Shares)........................ 54,276 20,087
12b-1 fees payable (Class B
Shares)........................ 112 108
Payable for investment securities
purchased...................... 30,229,010 --
Dividends payable................ 768,493 521,402
Payable for Fund shares
redeemed....................... 280,338 5,000
Organization expenses payable.... 102,917 --
Accrued legal fees............... 5,454 7,925
Accrued Trustees' fees........... 1,361 569
Other accrued expenses........... 51,527 36,578
-------------------- -----------------
Total Liabilities......... 31,503,536 597,454
-------------------- -----------------
NET ASSETS......................... $383,049,081 $ 226,982,203
-------------------- -----------------
-------------------- -----------------
</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES-- (CONTINUED)
February 28, 1995
- --------------------------------------------------------------------------------
<CAPTION>
Prairie Intermediate
Municipal Prairie Municipal
Bond Fund Bond Fund, Inc.
Net Asset Value, Offering Price and -------------------- -----------------
Redemption
Price per Share:
<S> <C> <C>
Class A Shares:
($17,242,523/1,461,961
shares of beneficial
interest issued and
outstanding, $0.001 par
value, unlimited number of
shares authorized)........ $ 11.79
Sales charge--3.00% of
maximum offering price.... 0.36
--------------------
Maximum Offering Price...... $ 12.15
--------------------
--------------------
($6,839,606/567,055 shares
of beneficial interest
issued and outstanding,
$0.001 par value,
unlimited number of shares
authorized)............... $ 12.06
Sales charge--4.50% of
maximum offering price.... 0.57
-----------------
Maximum Offering Price...... $ 12.63
-----------------
-----------------
Net Asset Value and Redemption
Price per Share:
Class B Shares:
($5,677/481 shares of
beneficial interest issued
and outstanding, $0.001
par value, unlimited
number of shares
authorized)............... $ 11.80
--------------------
--------------------
Net Asset Value and Redemption
Price per Share:
Class I Shares:
($365,800,881/30,994,993
shares of beneficial
interest issued and
outstanding, $0.001 par
value, unlimited number of
shares authorized)........ $ 11.80
--------------------
--------------------
($220,142,597/18,259,905
shares of beneficial
interest issued and
outstanding, $0.001 par
value, unlimited number of
shares authorized)........ $ 12.06
-----------------
-----------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at
par............................ $ 32,457 $ 18,827
Additional paid-in capital....... 380,665,379 224,592,054
Accumulated net realized
losses......................... (759,010) (260,986)
Net unrealized appreciation of
investments.................... 3,110,255 2,632,308
-------------------- -----------------
NET ASSETS......................... $383,049,081 $ 226,982,203
-------------------- -----------------
-------------------- -----------------

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended February 28, 1995
- --------------------------------------------------------------------------------
<CAPTION>

Prairie Intermediate Prairie Municipal
Municipal Bond Fund Bond Fund, Inc.
-------------------- -----------------
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME.................... $2,141,819 $ 984,395
----------- -----------------
EXPENSES:
Advisory fees.................... 213,509 84,738
Administration fees.............. 27,546 15,548
Shareholder servicing fees (Class
A Shares and Class B Shares)... 60,314 20,089
12b-1 fees (Class B Shares)...... 175 183
Registration fees................ 33,720 30,271
Legal fees....................... 30,040 14,418
Audit fees....................... 29,438 11,541
Reports to shareholders.......... 18,415 13,517
Transfer agent fees and
expenses....................... 17,386 15,883
Custodian fees and expenses...... 5,329 5,356
Trustees' fees................... 5,076 1,718
Miscellaneous expenses........... 11,946 8,105
----------- -----------------
452,894 221,367
Less: Fee waivers and expense
reimbursements................. (296,239) (167,016)
----------- -----------------
156,655 54,351
----------- -----------------
NET INVESTMENT INCOME..... 1,985,164 930,044
----------- -----------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on
investments.................... (757,908) (260,986)
Net unrealized appreciation of
investments.................... 2,898,764 2,624,847
----------- -----------------
NET REALIZED AND
UNREALIZED GAIN ON
INVESTMENTS............. 2,140,856 2,363,861
----------- -----------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $4,126,020 $ 3,293,905
----------- -----------------
----------- -----------------

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<CAPTION>

For the Year Ended
February 28, 1995<F2> February 28, 1994<F1>
----------------------- -----------------------
<S> <C> <C>
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income............ $ 1,985,164 $ 1,394,851
Net realized (loss) gain on
investments.................... (757,908) 1,275,347
Net unrealized appreciation
(depreciation) of
investments.................... 2,898,764 (1,243,092)
----------------------- ------------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS................ 4,126,020 1,427,106
----------------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income:
Class A Shares................. (1,212,925) (1,394,847)
Class B Shares................. (2,005) (4)
Class I Shares................. (770,234) --
----------------------- ------------
TOTAL DIVIDENDS TO
SHAREHOLDERS.............. (1,985,164) (1,394,851)
----------------------- ------------
From net realized gain on
investments:
Class A Shares................. (62,814) (1,471,722)
Class B Shares................. (284) --
Class I Shares................. -- --
----------------------- ------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS.............. (63,098) (1,471,722)
----------------------- ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares................. 920,191 6,634,160
Class B Shares................. 115,550 12,000
Class I Shares................. 366,411,242 --
Dividends and distributions
reinvested:
Class A Shares................. 829,334 1,972,927
Class B Shares................. 1,971 4
Class I Shares................. 20,498 --
Cost of shares redeemed:
Class A Shares................. (12,219,977) (6,226,132)
Class B Shares................. (123,958) --
Class I Shares................. (3,821,887) --
----------------------- ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL STOCK
TRANSACTIONS.............. 352,132,964 2,392,959
----------------------- ------------
TOTAL INCREASE IN NET
ASSETS............... 354,210,722 953,492

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

<FN>
Includes Class B Shares for the period February 8, 1994 (initial offering
date of Class B Shares) through February 28, 1994.
<FN> Includes Class B Shares for the period March 1, 1994 through December 2,
1994 and for the period January 30, 1995 (subsequent re-offering date of
Class B Shares) through February 28, 1995 (see Note 1).

</TABLE>
See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS-- (CONTINUED)
- --------------------------------------------------------------------------------
<CAPTION>

For the Year Ended
February 28, 1995<F2> February 28, 1994<F1>
----------------------- -----------------------
NET ASSETS:
<S> <C> <C>
Beginning of year................ 28,838,359 27,884,867
----------------------- ------------
End of year...................... $ 383,049,081 $28,838,359
----------------------- ------------
----------------------- ------------
CAPITAL SHARE TRANSACTIONS:
CLASS A:
Shares sold.................... 78,527 523,996
Shares issued in reinvestment
of dividends and
distributions............... 70,747 158,309
Shares redeemed................ (1,053,197) (496,647)
----------------------- ------------
NET (DECREASE) INCREASE IN
SHARES OUTSTANDING........ (903,923) 185,658
----------------------- ------------
----------------------- ------------
CLASS B:
Shares sold.................... 9,750 980
Shares issued in reinvestment
of dividends and
distributions............... 169 1
Shares redeemed................ (10,419) --
----------------------- ------------
NET (DECREASE) INCREASE IN
SHARES OUTSTANDING........ (500) 981
----------------------- ------------
----------------------- ------------
CLASS I:
Shares sold.................... 31,318,358 --
Shares issued in reinvestment
of dividends................ 1,737 --
Shares redeemed................ (325,102) --
----------------------- ------------
NET INCREASE IN SHARES
OUTSTANDING............... 30,994,993 --
----------------------- ------------
----------------------- ------------

- ----------------
<FN> Includes Class B Shares for the period February 8, 1994 (initial offering
date of Class B Shares) through February 28, 1994.
<FN> Includes Class B Shares for the period March 1, 1994 through December 2,
1994 and for the period January 30, 1995 (subsequent re-offering date of
Class B Shares) through February 28, 1995 (see Note 1).

</TABLE>
See Notes to Financial Statements.

<TABLE>

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<CAPTION>

For the Year Ended
February 28, 1995<F2> February 28, 1994<F1>
-------------------- --------------------

<S> <C> <C>
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income............ $ 930,044 $ 497,241
Net realized (loss) gain on
investments.................... (260,986) 607,250
Net unrealized appreciation
(depreciation) of
investments.................... 2,624,847 (728,931)
-------------------- --------------------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS................ 3,293,905 375,560
-------------------- --------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income:
Class A Shares................. (409,080) (497,237)
Class B Shares................. (67) (4)
Class I Shares................. (520,897) --
-------------------- --------------------
TOTAL DIVIDENDS TO
SHAREHOLDERS.............. (930,044) (497,241)
-------------------- --------------------
From net realized gain on
investments:
Class A Shares................. -- (717,815)
Class B Shares................. -- --
Class I Shares................. -- --
-------------------- --------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS.............. -- (717,815)
-------------------- --------------------
In excess of net realized gain on
investments:
Class A Shares................. -- (6,618)
Class B Shares................. -- --
Class I Shares................. -- --
-------------------- --------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS.............. -- (6,618)
-------------------- --------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares................. 301,216 3,586,206
Class B Shares................. -- 2,000
Class I Shares................. 222,099,320 --
Dividends and distributions
reinvested:
Class A Shares................. 319,837 956,593
Class B Shares................. 66 4
Class I Shares................. 3,923 --
- ------------------
<F1> Includes Class B shares for the period February 8, 1994 (initial offering
date of Class B Shares) through February 28, 1994.
<F2> Includes Class B Shares for the period March 1, 1994 through December 2,
1994 (See Note 1).

</TABLE>

See Notes to Financial Statements.

<TABLE>

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS-- (CONTINUED)
- --------------------------------------------------------------------------------
<CAPTION>

For the Year Ended
February 28, 1995<F2> February 28, 1994<F1>
-------------------- --------------------
<S> <C> <C>
Cost of shares redeemed:
Class A Shares................. $ (2,895,171) $(5,752,746)
Class B Shares................. (2,071) --
Class I Shares................. (4,444,913) --
-------------------- --------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS........ 215,382,207 (1,207,943)
-------------------- --------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS........... 217,746,068 (2,054,057)
NET ASSETS:
Beginning of year................ 9,236,135 11,290,192
-------------------- --------------------
End of year...................... $226,982,203 $ 9,236,135
-------------------- --------------------
-------------------- --------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A:
Shares sold.................... 25,507 275,363
Shares issued in reinvestment
of dividends and
distributions............... 27,236 75,829
Shares redeemed................ (246,815) (441,865)
-------------------- --------------------
NET DECREASE IN SHARES
OUTSTANDING............... (194,072) (90,673)
-------------------- --------------------
-------------------- --------------------
CLASS B:
Shares sold.................... -- 161
Shares issued in reinvestment
of dividends................ 6 1
Shares redeemed................ (168) --
-------------------- --------------------
NET (DECREASE) INCREASE IN
SHARES
OUTSTANDING............... (162) 162
-------------------- --------------------
-------------------- --------------------
CLASS I:
Shares sold.................... 18,631,505 --
Shares issued in reinvestment
of dividends................ 325 --
Shares redeemed................ (371,925) --
-------------------- --------------------
NET INCREASE IN SHARES
OUTSTANDING............... 18,259,905 --
-------------------- --------------------
-------------------- --------------------

- ------------------
<FN> Includes Class B shares for the period February 8, 1994 (initial offering
date of Class B Shares) through February 28, 1994.
<FN> Includes Class B Shares for the period March 1, 1994 through December 2,
1994, (See Note 1).

</TABLE>
See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment returns, ratios to average net
assets and other supplemental data for each year indicated. This information has
been derived from information provided in the Fund's financial statements.

For the Year Ended
------------------------------------------------------------------------
February 28, February 28, February 28, February 29, February 28,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>

PER SHARE DATA:
CLASS A :
Net asset value per share, beginning
of year............................. $ 12.18 $ 12.79 $ 12.25 $ 11.95 $ 11.65
------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income................. 0.55 0.61 0.64 0.76 0.80
Net realized and unrealized (loss)
gain on investments................. (0.36) 0.01 0.68 0.37 0.31
------------ ------------ ------------ ------------ ------------
TOTAL INCOME FROM INVESTMENT
OPERATIONS................... 0.19 0.62 1.32 1.13 1.11
------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income.. (0.55) (0.61) (0.64) (0.76) (0.80)
Distributions from net realized gain
on investments...................... (0.03) (0.62) (0.14) (0.07) (0.01)
------------ ------------ ------------ ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS................ (0.58) (1.23) (0.78) (0.83) (0.81)
------------ ------------ ------------ ------------ ------------
Net change in net asset value per
share............................... (0.39) (0.61) 0.54 0.30 0.30
------------ ------------ ------------ ------------ ------------
Net asset value per share, end of
year................................ $ 11.79 $ 12.18 $ 12.79 $ 12.25 $ 11.95
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL INVESTMENT RETURN <F1> 1.64% 4.94% 11.26% 9.78% 9.94%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets.............................. 0.29% 0.06% -- -- --
Ratio of net investment income to
average net assets.................. 4.73% 4.78% 5.16% 6.15% 6.76%
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements.............. 1.09% 1.21% 1.31% 1.72% 2.75%
Portfolio Turnover Rate............... 128.02% 167.95% 63.67% 86.91% 12.22%
Net Assets, end of year (000's
Omitted)............................ $ 17,243 $ 28,826 $ 27,885 $ 18,310 $ 7,251

- ----------------
<FN> Exclusive of sales charge.

</TABLE>
See Notes to Financial Statements.

<TABLE>

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS-- (CONTINUED)
- --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment returns, ratios to average net
assets and other supplemental data for the period February 8, 1994 (initial
offering date) through February 28, 1994 and for the period March 1, 1994
through December 2, 1994. This information has been derived from information
provided in the Fund's financial statements.

For the For the
Period Ended Period Ended
December 2, February 28,
1994<F2> 1994<F1>
------------ ------------
<S> <C> <C>
PER SHARE DATA:
CLASS B:
Net asset value per share,
beginning of period............ $12.18 $12.32
------ ------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income............ 0.37 0.03
Net realized and unrealized
(loss) on investments.......... (0.72) (0.14)
------ ------
TOTAL LOSS FROM INVESTMENT
OPERATIONS.............. (0.35) (0.11)
------ ------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment
income......................... (0.37) (0.03)
Distributions from net realized
gain on investments............ (0.03) --
------ ------
TOTAL DIVIDENDS AND
DISTRIBUTIONS........... (0.40) (0.03)
------ ------
Net change in net asset value per
share.......................... (0.75) (0.14)
------ ------
Conversion to Class A shares..... 11.43 --
------ ------
Net asset value per share, end of
period......................... $ -- $12.18
------ ------
------ ------
TOTAL INVESTMENT RETURN <F4> -2.98% -0.93%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets......................... 0.76%<F3> 0.75%<F3>
Ratio of net investment income to
average net assets............. 4.03%<F3> 1.68%<F3>
Decrease reflected in above
expense ratios due to fee
waivers and expense
reimbursements................. 1.24%<F3> 2.25%<F3>
Portfolio Turnover Rate.......... 128.02% 167.95%
Net Assets, end of period (000's
Omitted)....................... $ -- $ 12

- ----------------
<FN> For the period February 8, 1994 (initial offering date) through February 28,
1994.
<FN> For the period March 1, 1994 through December 2, 1994. On December 2, 1994
the Fund terminated its offering of Class B Shares and converted such shares
to Class A Shares (See Note 1).
<FN> Annualized.
<FN> Not Annualized.

</TABLE>
See Notes to Financial Statements.

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS-- (CONTINUED)
- ---------------------------------------------------------------

Contained below is per share operating performance data for a
share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data
for the period January 30, 1995 (re-offering date) through
February 28, 1995. This information has been derived from
information provided in the Fund's financial statements.

For the
Period Ended
February 28,
1995<F1>
------------

PER SHARE DATA:
CLASS B:
Net asset value per share, beginning
of period........................... $ 11.57
------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. 0.04
Net realized and unrealized gain on
investments......................... 0.23
------------
TOTAL INCOME FROM INVESTMENT
OPERATIONS................... 0.27
------------
Dividends from net investment
income.............................. (0.04)
------------
Net change in net asset value per
share............................... 0.23
------------
Net asset value per share, end of
period.............................. $ 11.80
------------
------------
TOTAL INVESTMENT RETURN 2.30%<F3>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets.............................. 1.36%<F2>
Ratio of net investment income to
average net assets.................. 3.72%<F2>
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements.............. 0.28%<F2>
Portfolio Turnover Rate............... 128.02%
Net Assets, end of period (000's
Omitted)............................ $ 6

- ----------------
[FN] For the period January 30, 1995 (Re-offering date of
Class B Shares) through February 28, 1995.
[FN] Annualized.
[FN] Not Annualized.

See Notes to Financial Statements.

PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
- ----------------------------------------------------------------
FINANCIAL HIGHLIGHTS-- (CONTINUED)
- ----------------------------------------------------------------

Contained below is per share operating performance data for a
share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data
for the period January 30, 1995 (initial offering date) to
February 28, 1995. This information has been derived from
information provided in the Fund's financial statements.

For the
Period Ended
February 28,
1995<F1>
------------

PER SHARE DATA:
CLASS I:
Net asset value per share, beginning
of period........................... $ 11.57
------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. 0.04
Net realized and unrealized gain on
investments......................... 0.23
------------
TOTAL INCOME FROM INVESTMENT
OPERATIONS................... 0.27
------------
Dividends from net investment
income.............................. (0.04)
------------
Net change in net asset value per
share............................... 0.23
------------
Net asset value per share, end of
period.............................. $ 11.80
------------
------------
TOTAL INVESTMENT RETURN 2.37%<F3>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets.............................. 0.50%<F2>
Ratio of net investment income to
average net assets.................. 4.79%<F2>
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements.............. 0.10%<F2>
Portfolio Turnover Rate............... 128.02%
Net Assets, end of period (000's
Omitted)............................ $365,801

- ----------------
[FN] For the period January 30, 1995 (initial offering date) to

February 28, 1995.
[FN] Annualized.
[FN] Not Annualized.

See Notes to Financial Statements.

<TABLE>

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

<CAPTION>
For the Year Ended
------------------------------------------------------------------------
February 28, February 28, February 28, February 29, February 28,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
CLASS A:
Net asset value per share, beginning
of year............................ $ 12.13 $ 13.25 $ 12.49 $ 12.10 $ 11.77
------------ ------------ ------------ ------------ ------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income................ 0.60 0.63 0.70 0.76 0.81
Net realized and unrealized (loss)
gain on investments................ (0.07) (0.15) 1.01 0.47 0.33
------------ ------------ ------------ ------------ ------------
TOTAL INCOME FROM INVESTMENT
OPERATIONS.................. 0.53 0.48 1.71 1.23 1.14
------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment
income............................. (0.60) (0.63) (0.70) (0.76) (0.81)
Distributions from net realized gain
on investments..................... -- (0.96) (0.25) (0.08) --
Distribution in excess of net
realized gain on investments....... -- (0.01) -- -- --
------------ ------------ ------------ ------------ ------------
TOTAL DIVIDENDS AND
DISTRIBUTIONS............... (0.60) (1.60) (0.95) (0.84) (0.81)
------------ ------------ ------------ ------------ ------------
Net change in net asset value per
share.............................. (0.07) (1.12) 0.76 0.39 0.33
------------ ------------ ------------ ------------ ------------
Net asset value per share, end of
year............................... $ 12.06 $ 12.13 $ 13.25 $ 12.49 $ 12.10
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
TOTAL INVESTMENT RETURN<F1> 4.62% 3.70% 14.37% 10.50% 10.13%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets......................... 0.07% -- -- -- --
Ratio of net investment income to
average net assets................. 5.09% 4.85% 5.49% 5.99% 6.87%
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements............. 1.91% 1.44% 1.59% 2.75% 2.75%
Portfolio Turnover Rate.............. 59.86% 175.06% 88.53% 66.28% 32.40%
Net Assets, end of year (000's
Omitted)........................... $ 6,840 $ 9,234 $ 11,290 $ 6,591 $ 2,244

- ----------------
<FN> Exclusive of sales charge.

</TABLE>
See Notes to Financial Statements.

<TABLE>

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS-- (CONTINUED)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment returns, ratios to average net
assets and other supplemental data for the period February 8, 1994 (initial
offering date) through February 28, 1994 and for the period March 1, 1994
through December 2, 1994. This information has been derived from information
provided in the Fund's financial statements.

For the For the
Period Ended Period Ended
December 2, February 28,
1994<F2> 1994<F1>
------------ ------------
<S> <C> <C>
PER SHARE DATA:
CLASS B:
Net asset value per share, beginning
of period........................... $12.14 $ 12.37
------ ------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income................. 0.41 0.03
Net realized and unrealized (loss) on
investments......................... (0.70) (0.23)
------ ------------
TOTAL LOSS FROM INVESTMENT
OPERATIONS................... (0.29) (0.20)
------ ------------
Dividends from net investment
income.............................. (0.41) (0.03)
------ ------------
Net change in net asset value per
share............................... (0.70) (0.23)
------ ------------
Conversion to Class A shares.......... $11.44 $ --
------ ------------
Net asset value per share, end of
period.............................. $ -- $ 12.14
------ ------------
------ ------------
TOTAL INVESTMENT RETURN<F4> -2.46% -1.64%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets.............................. 0.51%<F3> 0.50%<F3>
Ratio of net investment income to
average net assets.................. 4.54%<F3> 4.10%<F3>
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements.............. 2.69%<F3> 2.41%<F3>
Portfolio Turnover Rate............... 59.86% 175.06%
Net Assets, end of period (000's
Omitted)............................ $ -- $ 2

- ----------------
<FN> For the period February 8, 1994 (initial offering date) through February 28,
1994.
<FN> For the period March 1, 1994 through December 2, 1994. On December 2, 1994
the Fund terminated its offering of Class B shares and converted such shares
to Class A Shares.
<FN> Annualized.
<FN> Not Annualized.

</TABLE>
See Notes to Financial Statements.

PRAIRIE MUNICIPAL BOND FUND, INC.
- --------------------------------------------------------------
FINANCIAL HIGHLIGHTS-- (CONTINUED)
- --------------------------------------------------------------

Contained below is per share operating performance data for a
share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data
for the period February 1, 1995 (initial offering date) to
February 28, 1995. This information has been derived from
information provided in the Fund's financial statements.

For the
Period Ended
February 28,
1995<F1>
------------

PER SHARE DATA:
CLASS I:
Net asset value per share, beginning
of period........................... $ 11.79
------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................. 0.05
Net realized and unrealized gain on
investments......................... 0.27
------------
TOTAL INCOME FROM INVESTMENT
OPERATIONS................... 0.32
------------
DIVIDENDS FROM NET INVESTMENT
INCOME.............................. (0.05)
------------
Net change in net asset value per
share............................... 0.27
------------
Net asset value per share, end of
period.............................. $ 12.06
------------
------------
TOTAL INVESTMENT RETURN 2.69%<F3>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets.............................. 0.51%<F2>
Ratio of net investment income to
average net assets.................. 5.45%<F2>
Decrease reflected in above expense
ratios due to fee waivers and
expense reimbursements.............. 0.14%<F2>
Portfolio Turnover Rate............... 59.86%
Net Assets, end of period (000's
Omitted)............................ $220,143

- ----------------
[FN] For the period February 1, 1995 (initial offering date)
to February 28, 1995.
[FN] Annualized.
[FN] Not Annualized.

See Notes to Financial Statements.

PRAIRIE FUNDS
- ----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------

NOTE 1--GENERAL

Prairie Intermediate Municipal Bond Fund and Prairie
Municipal Bond Fund, Inc. (collectively, the 'Funds') are both
registered under the Investment Company Act of 1940 as amended
(the 'Act') as non-diversified open-end management investment
companies. The Intermediate Municipal Bond Fund was formerly
a series company, along with the Municipal Bond Fund, of First
Prairie Municipal Bond Fund (the 'Company'). As such, the
Intermediate Municipal Bond Fund was known as the First Prairie
Municipal Bond
Fund--Intermediate Series (the 'Intermediate Series'). At a
meeting of the Company's Board held on October 28, 1994, the
Board
unanimously approved an Agreement and Plan of Exchange (the
'Plan') whereby the Intermediate Series would transfer all or
substantially all of its assets, subject to its liabilities, to
the Intermediate Municipal Bond Fund in exchange for shares of
the Intermediate Municipal Bond Fund having a net asset value
equal to the value of the net assets of the Intermediate Series
acquired. The Plan also contemplated that each shareholder of
the
Intermediate Series receive the same number of shares of the
Intermediate Municipal Bond Fund equal in value to the
Intermediate Series shares held by that shareholder. This
reorganization took place on January 27, 1995 at which time the
shareholders of the Intermediate Series received 1,930,122
shares of the Intermediate Municipal Bond Fund with a net asset
value of $22,331,512.

In addition to the above described transaction, for each Fund
a new administrator and distributor were appointed and the
administration fees then in effect were lowered. As such, on
January 17, 1995, First Chicago Investment Management Company
('FCIMCO'), a wholly-owned subsidiary of The First National
Bank of Chicago ('First Chicago'), was named investment adviser
and administrator of the Funds. Prior to January 17, 1995, First
Chicago acted as investment adviser to the Funds. FCIMCO has
entered into an agreement with Concord Holding Corporation
('Concord') to assist in providing certain administrative
services to each Fund. In addition, on January 17, 1995, Concord
Financial Group, Inc. (the 'Distributor'), a wholly-owned
subsidiary of Concord, was named principal underwriter and
distributor of each Fund's shares.

Effective January 17, 1995, Prairie Municipal Bond Fund, Inc.
changed its name from the First Prairie Municipal Bond
Fund--Insured Series.

On February 10, 1995, First Chicago Personal Trust
Intermediate
Tax-Exempt Bond Fund transferred cash, securities and related
accrued interest to Prairie Intermediate Municipal Bond Fund
having a market value of $349,656,211 in exchange for 29,885,146
Class I Shares.

In addition, on February 10, 1995 First Chicago Personal
Trust
Tax-Exempt Bond Fund transferred cash, securities and related
accrued interest to Prairie Municipal Bond Fund, Inc. having a
market value of $213,488,376 in exchange for 17,910,099 Class I
Shares.

For the period from March 1, 1994 through January 16, 1995,
The Dreyfus Corporation ('Dreyfus') served as the Funds'
administrator. For the period February 1, 1994 through August
24, 1994, Dreyfus Service Corporation (the 'former
Distributor'), a wholly-owned subsidiary of Dreyfus, acted as
the principal underwriter and distributor of the Funds' shares.
Effective August 24, 1994, Dreyfus became a direct subsidiary of
Mellon Bank, N.A. As such, effective August 24, 1994, Premier
Mutual Fund Services, Inc. ('Premier'), a wholly-owned
subsidiary of Institutional
Administration Services, Inc. whose parent company is Boston
Institutional Group, Inc., became and served as the principal
underwriter and distributor of the Funds' shares through January
16, 1995.

On March 29, 1995, a merger agreement was approved by the
shareholders of Concord whereby Concord became BISYS Investment
Services, Inc., a wholly-owned subsidiary of The BISYS Group,
Inc. ('Bisys'). Bisys serves as sub-administrator
and distributor on substantially identical terms as described
below in Note 3.

The Funds offer Class A Shares, Class B Shares and Class I
Shares. Class A Shares are subject to a sales charge imposed at
the time of purchase, Class B Shares are subject to a contingent
deferred sales charge imposed at the time of redemption made
within five years of purchase for the Intermediate Municipal
Bond Fund and within six years of purchase for the Municipal
Bond Fund and Class I Shares are offered without a sales charge.
Other differences between the three Classes include the services
offered to and the expenses borne by each Class, and certain
voting rights. On December 2, 1994, the Funds terminated their
offerings of Class B Shares and converted such shares to Class A
Shares. On January 30, 1995, the Prairie Intermediate Municipal
Bond Fund began re-offering Class B Shares.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES

(A) Portfolio valuation: Each Fund's investments are valued
each business day by an independent pricing service ('Service')
approved by its Board. Investments for which quoted bid prices
in
the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the
mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such
securities). Other investments (which constitute a majority of
the
portfolio securities) are carried at fair value as determined by
the Service, based on methods which include consideration of:
yields or prices of municipal securities of comparable quality,
coupon, maturity and type; indications as to values from
dealers;
and general market conditions.

(B) Securities transactions and investment income:
Securities transactions are recorded on a trade date basis.
Realized gain and
loss from securities transactions are recorded on the identified
cost basis. Interest income, adjusted for amortization of
premiums
and, when appropriate, discounts on investments, is earned from
settlement date and recognized on the accrual basis. Securities
purchased or sold on a when-issued or delayed-delivery basis may
be settled a month or more after the trade date.

(C) Expenses: Expenses directly attributable to each Fund
are charged to that Fund's operations; expenses which are
applicable to both Funds are allocated between them.

(D) Dividends to shareholders: It is the policy of the Funds
to declare dividends daily from net investment income. Such
dividends are paid monthly. Distributions from net realized
capital gain, are normally declared and paid annually, but each
Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code
(the 'Code'). However, to the extent that a net realized capital
gain of either Fund can be reduced by capital loss carryovers,
if any, of that Fund, such gain will not be distributed.

The amounts of dividends from net investment income and of
distributions from net realized gains are determined in
accordance
with federal income tax regulations which may differ from
generally accepted accounting principles. These 'book/tax'
differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the composition of net
assets based on their federal tax-basis treatment; temporary
differences
do not require reclassification. Dividends and distributions to
shareholders which exceed net investment income and net realized
capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net realized
capital gains. To the extent they exceed net investment income
and net realized gains for tax purposes, they are reported as
distributions of capital.

(E) Federal income taxes: It is the policy of each Fund to
continue to qualify as a regulated investment company, which can
distribute tax exempt dividends, by complying with the
provisions
available to certain investment companies, as defined in
applicable sections of the Code, and to make distributions of
income and net realized capital gain sufficient to relieve it
from all, or substantially all, federal income taxes. For
Federal
income tax purposes, each Fund is treated as a single entity for
the purpose of determining such qualification.

The Intermediate Municipal Bond Fund and the Municipal Bond
Fund have unused capital loss carryovers of approximately
$656,000 and $268,000, respectively available for Federal income
tax purposes to be applied against future net securities profit,
if any realized subsequent to February 28, 1995. The carryovers
do not include net realized securities losses from November 1,
1994 through February 28, 1995 which are treated, for Federal
income tax purposes, as arising in fiscal 1996. If not applied,
the carryovers expire in fiscal 2003.

(F) Other: Organization expenses incurred by the Funds are
included in prepaid expenses and are being amortized to
operations
over the period during which it is expected that a benefit will
be
realized, not to exceed five years. At February 28, 1995, the
unamortized balance of such expenses amounted to $106,736 and
$3,772 for the Intermediate Municipal Bond Fund and Municipal
Bond Fund, respectively.

NOTE 3--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

(A) The Funds have an Investment Advisory Agreement with
FCIMCO pursuant to which FCIMCO has agreed to provide day-to-day
management of the Funds' investments at an annual rate of 0.40%
of the Funds' average daily net assets. For the period March 1,
1994 through January 16, 1995, the Funds had a management
agreement
with First Chicago pursuant to which First Chicago agreed to
provide day-to-day management of the Funds' investments at an
annual rate of 0.40% of the Funds' average daily net assets.

The Funds have an Administration Agreement with FCIMCO
pursuant
to which FCIMCO has agreed to assist in all aspects of the
Funds'
operations at an annual rate of 0.15% of the Funds' average
daily
net assets. FCIMCO has engaged Concord to provide certain
administrative services to the Funds pursuant to a Master
Sub-Administration Agreement between FCIMCO and Concord. FCIMCO
has agreed to pay Concord a fee from its own funds for the
services stipulated in the Master Sub-Administration Agreement.
For the period from March 1, 1994 through January 16, 1995, the
Funds engaged Dreyfus to provide certain administrative services
to the Funds pursuant to an administration agreement between the
Funds and Dreyfus. Pursuant to this agreement, the Funds agreed
to pay Dreyfus at an annual rate of .20% of the Funds' average
daily net assets.

For the period from March 1, 1994 through January 16, 1995,
First Chicago voluntarily agreed to waive all of its investment
advisory fee and reimburse a portion of the operating expenses
of
each Fund. As such, First Chicago waived fees of $140,053 and
$43,158 and reimbursed operating expense of $131,549 and
$96,484 for the Intermediate Municipal Bond Fund and the
Municipal Bond Fund, respectively.

For the period from January 17, 1995 through February 28,
1995, FCIMCO voluntarily agreed to waive a portion of its
investment advisory fee and reimburse a portion of the operating
expenses of the Funds to the extent that the Funds' expenses,
excluding 12b-1 and shareholder servicing fees, exceed 0.55% of
the value of the Funds' average daily net assets
(annualized). As such, FCIMCO waived advisory fees of $21,158
and
reimbursed operating expenses of $3,479 in order for the
Intermediate Municipal Bond Fund to meet this limitation. In
addition, FCIMCO waived advisory fees of $15,846 and reimbursed
operating expenses of $11,528 in order for the Municipal Bond
Fund to meet this limitation.

The Distributor, the former Distributor and Premier were not
entitled to any fees pursuant to their respective distribution
agreements.

For the period March 1, 1994 through January 16, 1994,
approximately $433,000 and $445,000 was retained on commissions
earned on sales of shares of the Intermediate Municipal Bond
Fund
and the Municipal Bond Fund, respectively by Dreyfus.

(B) For the period from March 1, 1994 through January 16,
1995,
the Funds had a Shareholder Services Plan (the 'Former Plan')
pursuant to which they agreed to pay costs and expenses in
connection with servicing shareholder accounts for Class A
Shares
and Class B Shares. The services provided included personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding each Fund and providing reports
and other information, and services related to the maintenance
of
shareholder accounts. Under the Former Plan, each Fund agreed to
pay one or more Service Agents (which may have included First
Chicago, Dreyfus, the former Distributor and Premier) an annual
rate of .25% of the value of the Funds' Class A Shares and Class
B Shares average daily net assets. For the period ended January
16, 1995, no amounts were paid by the Funds pursuant to the
undertaking in effect (see Note 3(a)).

For the period January 17, 1995 through February 28, 1995,
the Funds' Class A Shares and Class B Shares had a Shareholder
Service's Plan (the 'Plan') pursuant to which the Funds pay the
Distributor a fee, at an annual rate of 0.25% of the average
daily
net assets of the outstanding Class A Shares and Class B Shares.
Pursuant to the terms of the Plan, the Distributor has agreed to
provide certain shareholder services to the holders of these
shares. Additionally, under the terms of the Plan, the
Distributor
may make payments to other Shareholder Service Agents who
provide such shareholder services to their clients who are
beneficial owners of Class A Shares and Class B Shares. FCIMCO,
First National Bank of Chicago and their affiliates may act as
Shareholder Service Agents and receive fees under the Plan. For
the period January 17, 1995 through February 28, 1995, the
Intermediate Municipal Bond Fund and the Municipal Bond Fund
paid $3,685 and $2,051, respectively, in fees under the Plan.

(C) For the period from March 1, 1994 through December 2,
1994,
the Funds had a Distribution Plan ('Class B Distribution Plan')
adopted pursuant to Rule 12b-1 under the Act. The Funds paid for
advertising, marketing and distributing Class B Shares, at an
annual rate of up to 0.50 of 1% of the value of the Fund's Class
B Shares average daily net assets. Under the Class B
Distribution
Plan, the Funds may make payments to Service Agents (which may
have included First Chicago, Dreyfus, the former Distributor and
Premier) in respect of these services. The Funds determined the
amounts to be paid to Service Agents. Service Agents receive
such
fees in respect of the average daily value of Class B Shares
owned by their clients. For the period March 1, 1994 through
December 2, 1994, $172 and $183 was charged to the Intermediate
Municipal Bond Fund and the Municipal Bond Fund, respectively,
pursuant to the Class B Distribution Plan, all of which was
retained by Dreyfus, the former Distributor and Premier.

For the period January 17, 1995 through February 28, 1995,
the Funds' Class B Shares had a Distribution Plan adopted
pursuant to
Rule 12b-1 under the Act (the '12b-1 Plan') pursuant to which
the Funds have agreed to pay the Distributor for advertising,
marketing and distributing shares of the Funds at an annual rate
of .75% of the average
daily
net assets of the Funds' outstanding Class B Shares. Under the
terms of the 12b-1 Plan, the Distributor may make payments to
FCIMCO, First Chicago, and their affiliates in respect of these
services. For the period January 30, 1995 (re-offering date)
through February 28, 1995 $3 was charged to the Intermediate
Municipal Bond Fund pursuant to the 12b-1 Plan, all of which was
retained by the Distributor.

(D) Certain officers of the Fund are 'affiliated persons,' as
defined in the Act, of Concord. Each Board member who is not an
'affiliated person' receives from the Fund an annual fee of
$25,000 and an attendance fee of $1,000 per meeting.

NOTE 4--SECURITIES TRANSACTIONS

The following summarizes the securities transactions by the
Funds, which consisted entirely of municipal bonds and
short-term exempt investments, for the year ended February 28,
1995:

<TABLE>

Purchases Sales
------------ -----------
<S> <C> <C>
Intermediate Municipal Bond Fund........... $402,318,723 $64,237,670
Municipal Bond Fund........................ $218,443,426 $14,534,972

</TABLE>

At February 28, 1995, accumulated net unrealized appreciation
on investments was $3,110,255, consisting of $3,328,126 gross
unrealized appreciation and $217,871 gross unrealized
depreciation for Intermediate Municipal Bond Fund.

At February 28, 1995, accumulated net unrealized appreciation
on investments was $2,632,308, consisting of $2,802,346 gross
unrealized appreciation and $170,038 gross unrealized
depreciation for Municipal Bond Fund.

At February 28, 1995, the cost of investments for Federal
income tax purposes for each Fund was substantially the same as
the cost for financial reporting purposes (see the Portfolios of
Investments).

PRAIRIE FUNDS
- ----------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- ----------------------------------------------------------------

SHAREHOLDERS AND BOARD MEMBERS
PRAIRIE INTERMEDIATE MUNICIPAL BOND FUND
PRAIRIE MUNICIPAL BOND FUND, INC.

We have audited the accompanying statements of assets and
liabilities, including the portfolios of investments, of Prairie
Intermediate Municipal Bond Fund and Prairie Municipal Bond
Fund,
Inc. as of February 28, 1995, 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
financial highlights for each of the years indicated therein.
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 February 28, 1995 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 Prairie Intermediate
Municipal
Bond Fund and Prairie Municipal Bond Fund, Inc. at February 28,
1995, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the
period then ended and the financial highlights for each of the
indicated years, in conformity with generally accepted
accounting principles.

Ernst & Young LLP

New York, New York
April 21, 1995
<PAGE>

<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--8.4% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
Canadian Imperial Bank of Commerce (Yankee)
5.96%, 1/19/1995.................................... $ 5,000,000 $ 5,000,000
Norichukin Bank (Yankee)
5.80%, 1/3/1995..................................... 5,000,000 5,000,016

TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (cost $10,000,016).. $ 10,000,016
=============
COMMERCIAL PAPER--12.4%
AIG Funding, Inc.
6.06%, 2/22/1995.................................... $ 5,000,000 $ 4,956,667
Barclays Bank of Canada
6.07%, 2/22/1995.................................... 5,000,000 4,956,594
Receivables Capital Corp.
6.18%, 2/10/1995.................................... 5,000,000 4,965,944
--------------
TOTAL COMMERCIAL PAPER
(cost $14,879,205).................................. $ 14,879,205
=============
CORPORATE NOTE--4.2%
Merrill Lynch & Co. Inc.
5.79%, 6/7/1995 (a)
(cost $5,000,000)................................... $ 5,000,000 $ 5,000,000
=============
BANKERS ACCEPTANCE--4.1%
Fuji Bank, Ltd. (Yankee)
5.86%, 2/22/1995
(cost $4,958,328)..................................... $ 5,000,000 $ 4,958,328
=============
U.S. GOVERNMENT AGENCIES--37.2%
Federal Home Loan Banks
Floating Rate Notes
4.80%, 7/6/1995 (a).................................. $ 25,000,000 $ 25,000,000
Small Business Administration
Pool Certificates (a)
6.81%, 9/25/1995..................................... 26,559 26,559
5.63%, 4/25/1996..................................... 33,884 33,884
6.44.%, 5/25/1999....................................... 93,890 93,890
7.04%, 3/25/2000......................................... 358,109 358,109
7.06%, 1/25/2001...................................... 535,131 535,131
6.87%, 12/25/2001.................................... 308,831 308,831
6.94%, 9/25/2003....................................... 39,236 39,236
7.26%, 9/25/2003....................................... 323,904 323,904
4.95%, 10/25/2005.................................... 1,416,170 1,416,170
6.23%, 1/25/2007.................................... 245,701 245,701
6.07%, 4/25/2007.................................... 1,151,023 1,151,023
7.18%, 6/25/2008..................................... 749,579 749,579
6.97%, 12/25/2008.................................... 307,420 307,420

FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PRINCIPAL
U.S. GOVERNMENT AGENCIES (CONTINUED) AMOUNT VALUE
-------------- --------------
<S> <C> <C>
Small Business Administration (continued)
Pool Certificates (a) (continued)
7.06%, 1/25/2009...................................... $ 889,180 $ 889,180
6.62%, 4/25/2013...................................... 2,089,913 2,089,913
6.48%, 5/25/2013...................................... 1,629,428 1,629,428
6.96%, 7/25/2013...................................... 102,632 102,632
6.49%, 8/25/2013...................................... 1,674,219 1,674,219
6.37%, 12/25/2013..................................... 258,254 258,254
7.09%, 12/25/2013..................................... 2,000,657 2,000,657
7.20%, 1/25/2014...................................... 998,562 998,562
6.95%, 2/25/2014...................................... 386,405 386,405
7.09%, 2/25/2014...................................... 1,398,542 1,398,542
6.03%, 5/25/2014...................................... 933,741 933,741
7.37%, 7/25/2014...................................... 1,439,470 1,439,470
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $44,390,440)............................................ $ 44,390,440
=============
REPURCHASE AGREEMENTS--32.7%
National Westminster Bank USA
5.40%, dated 12/30/94 due 1/3/95 in the amount of $20,012,000
(fully collateralized by $22,480,000 U.S. Treasury Notes
4.75%, due 10/31/98, value $20,353,190)..................... $ 20,000,000 $ 20,000,000
Sanwa Bank Ltd.
5.00%, dated 12/30/94 due 1/3/95 in the amount of $19,010,556
(fully collateralized by $19,756,000 U.S. Treasury Notes
6.50%, due 5/15/97, value $19,369,660)........................... 19,000,000 19,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(cost $39,000,000)................................................. $ 39,000,000
=============
TOTAL INVESTMENTS
(cost $118,227,989)............................................ 99.0% $118,227,989
====== =============
CASH AND RECEIVABLES (NET)......................................... 1.0% $ 1,172,029
====== =============
NET ASSETS ................................................... 100.0% $119,400,018
====== =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
</TABLE>

See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS--64.0% PURCHASE AMOUNT VALUE
------------ -------------- --------------
<S> <C> <C> <C>
1/5/1995................................................... 4.92% $ 5,000,000 $ 4,997,305
2/9/1995................................................... 4.88 25,000,000 24,869,080
3/2/1995................................................... 5.51 25,000,000 24,773,750
3/16/1995.................................................. 5.54 20,000,000 19,775,944
--------------
TOTAL U.S. TREASURY BILLS
(cost $74,416,079)......................................... $ 74,416,079
=============
U.S. GOVERNMENT AGENCIES--8.1%
Small Business Administration
Pool Certificates (a)
6/25/2013.................................................. 6.37% $ 865,303 $ 865,303
9/25/2014.................................................. 7.00 896,451 896,451
9/25/2016.................................................. 5.86 7,612,193 7,637,083
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $9,398,837).......................................... $ 9,398,837
=============
REPURCHASE AGREEMENTS--35.2%
Barclays De Zoette Wedd
dated 12/30/94, due 1/3/95 in the amount of
$20,012,222 (fully collateralized by
$20,315,000 U.S. Treasury Bill due 2/9/95,
value $20,203,945)......................................... 5.50% $ 20,000,000 $ 20,000,000
National Westminster Bank USA
dated 12/30/94, due 1/3/95 in the amount of
$21,012,600 (fully collateralized by
$22,940,000 U.S. Treasury Notes 5.125%,
due 12/31/98, value $21,420,225)........................... 5.40 21,000,000 21,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(cost $41,000,000)......................................... $ 41,000,000
=============
TOTAL INVESTMENTS
(cost $124,814,916).............................. 107.3% $124,814,916
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES............... (7.3%) $ (8,462,260)
====== =============
NET ASSETS........................................... 100.0% $116,352,656
====== =============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
</TABLE>

<TABLE>
<CAPTION>
See notes to financial statements.
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
MONEY MARKET GOVERNMENT
SERIES SERIES
-------------- --------------
ASSETS:
<S> <C> <C>
Investments in securities, at value (including repurchase agreements
of $39,000,000 and $41,000,000 for the Money Market Series and
the Government Series, respectively)_Note 2(a,b)...................... $118,227,989 $124,814,916
Cash.................................................................... 310,439 ____
Interest receivable..................................................... 576,909 111,786
Receivable for investment securities sold............................... 493,453 363,211
Prepaid expenses........................................................ 46,479 10,158
-------------- --------------
119,655,269 125,300,071
-------------- --------------
LIABILITIES:
Due to The First National Bank of Chicago............................... 82,023 62,129
Due to The Dreyfus Corporation.......................................... 78,173 62,950
Due to Custodian........................................................ ____ 8,782,836
Accrued expenses........................................................ 95,055 39,500
-------------- --------------
255,251 8,947,415
-------------- --------------
NET ASSETS ..................................................... $119,400,018 $116,352,656
============== =============
REPRESENTED BY:
Paid-in capital......................................................... $120,709,849 $117,334,182
Accumulated net realized (loss) on investments.......................... (1,309,831) (981,526)
-------------- --------------
NET ASSETS at value applicable to 119,423,849 and 116,401,128 shares
outstanding (unlimited number of $.01 par value shares of
Beneficial Interest authorized)......................................... $119,400,018 $116,352,656
============== =============
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($119,400,018/119,423,849 shares)..................................... $1.00
======
Government Series
($116,352,656/116,401,128 shares)..................................... $1.00
======
See notes to financial statements.
</TABLE>

<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF OPERATIONS DECEMBER 31, 1994
MONEY MARKET GOVERNMENT
SERIES SERIES
-------------- --------------
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $7,085,656 $5,775,870
-------------- --------------
EXPENSES--Note 2(c):
Management fee_Note 3(a).............................................. $ 859,905 $ 692,452
Shareholder servicing costs_Note 3(b)................................. 583,166 334,170
Professional fees..................................................... 53,306 20,565
Custodian fees........................................................ 40,709 21,630
Prospectus and shareholders' reports_Note 3(b)........................ 22,768 ____
Registration fees..................................................... 8,504 13,361
Trustees' fees and expenses_Note 3(c)................................. 8,325 4,396
Miscellaneous......................................................... 17,023 24,237
-------------- --------------
1,593,706 1,110,811
Less_reduction in management fee due to
undertaking_Note 3(a)............................................. ____ 29,785
-------------- --------------
TOTAL EXPENSES.................................................. 1,593,706 1,081,026
-------------- --------------
INVESTMENT INCOME--NET...................................................... 5,491,950 4,694,844
NET REALIZED (LOSS) ON INVESTMENTS--Note 2(b)............................... (1,309,831) (961,178)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,182,119 $3,733,666
============== =============
</TABLE>

See notes to financial statements.

<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
MONEY MARKET SERIES GOVERNMENT SERIES
------------------------------ ---------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------ --------------------------------
1993 1994 1993 1994
--------------- -------------- ---------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Investment income_net.................. $ 5,585,126 $ 5,491,950 $ 11,900,346 $ 4,694,844
Net realized gain (loss) on investments 23,361 (1,309,831) (13,557) (961,178)
--------------- -------------- ---------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ 5,608,487 4,182,119 11,886,789 3,733,666
--------------- -------------- ---------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net.................. (5,585,126) (5,491,950) (11,900,346) (4,694,844)
Net realized gain on investments....... (4,319) (23,361) ___ ___
--------------- -------------- ---------------- --------------
TOTAL DIVIDENDS...................... (5,589,445) (5,515,311) (11,900,346) (4,694,844)
--------------- -------------- ---------------- --------------
BENEFICIAL INTEREST TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold.......... 1,739,129,690 1,724,346,455 1,491,641,119 677,021,399
Dividends reinvested................... 2,244,715 2,559,069 564,832 1,310,332
Cost of shares redeemed................ (1,839,635,459)(1,770,081,791) (1,886,311,644) (716,564,214)
--------------- -------------- ---------------- --------------
(DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS. (98,261,054) (43,176,267) (394,105,693) (38,232,483)
--------------- -------------- ---------------- --------------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER--Note 3(d).............. --__ 1,286,000 ___ 933,054
--------------- -------------- ---------------- --------------
TOTAL (DECREASE) IN NET ASSETS. (98,242,012) (43,223,459) (394,119,250) (38,260,607)
NET ASSETS:
Beginning of year...................... 260,865,489 162,623,477 548,732,513 154,613,263
--------------- -------------- ---------------- --------------
End of year............................ $ 162,623,477 $ 119,400,018 $ 154,613,263 $ 116,352,656
=============== ============== ================ ================
</TABLE>

See notes to financial statements.

<TABLE>
<CAPTION>
FIRST PRAIRIE MONEY MARKET FUND, MONEY MARKET SERIES
FINANCIAL HIGHLIGHTS

YEAR ENDED DECEMBER 31,

- --------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
---------------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0001
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net........................ .0734 .0543 .0313 .0274 .0355
Net realized gain (loss) on investments...... -_ -_ -_ .0001 (.0109)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS........... .0734 .0543 .0313 .0275 .0246
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net......... (.0734) (.0543) (.0313) (.0274) (.0355)
Dividends from net realized gain on investments -_ -_ -_ -_ (.0002)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS........................ (.0734) (.0543) (.0313) (.0274) (.0357)
------- ------- ------- ------- -------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER............................. -_ -_ -_ -_ .0108
------- ------- ------- ------- -------
Net asset value, end of year................. $1.0000 $1.0000 $1.0000 $1.0001 $ .9998
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 7.59% 5.57% 3.18% 2.77% 3.63%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .96% .97% .98% .94% 1.02%
Ratio of net investment income to average
net assets................................. 7.33% 5.42% 3.17% 2.73% 3.51%
Decrease reflected in above expense ratios due
to expense reimbursements.................. -_ -_ -_ .05% -_
Net Assets, end of year (000's Omitted)...... $414,258 $456,791 $260,865 $162,623 $119,400
- -------------------------------
* Had the Series not had a capital contribution by the advisor during
the period, the total return would have been 2.61%.

</TABLE>

<TABLE>
<CAPTION>
See notes to financial statements.
FIRST PRAIRIE MONEY MARKET FUND, GOVERNMENT SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)

Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $ .9999
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net........................ .0715 .0498 .0283 .0249 .0379
Net realized (loss) on investments........... -_ -_ -_ (.0001) (.0083)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS........... .0715 .0498 .0283 .0248 .0296
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net......... (.0715) (.0498) (.0283) (.0249) (.0379)
Dividends from net realized gain
on investments............................. -_ -_ -_ -_ -_
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS........................ (.0715) (.0498) (.0283) (.0249) (.0379)
------- ------- ------- ------- -------
CAPITAL CONTRIBUTIONS FROM AN AFFILIATE
OF THE ADVISER............................. -_ -_ -_ -_ .0080
------- ------- ------- ------- -------
Net asset value, end of year................. $1.0000 $1.0000 $1.0000 $ .9999 $ .9996
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 7.39% 5.10% 2.87% 2.52% 3.86%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .93% .90% .91% .74% .86%
Ratio of net investment income to average
net assets................................. 7.09% 4.97% 2.87% 2.48% 3.73%
Decrease reflected in above expense ratios due
to expense reimbursements.................. -_ -_ -_ .14% .02%
Net Assets, end of year (000's Omitted)...... $777,257 $990,897 $548,733 $154,613 $116,353
- -------------------------------
* Had the Series not had a capital contribution by the advisor during
the period, the total return would have been 2.83%.
</TABLE>

See notes to financial statements.

FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:

The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company and operates as a series company issuing two classes of
Beneficial Interest: the Money Market Series and the Government
Series. The Fund accounts separately for the assets,
liabilities and operations of each series. The First National
Bank of Chicago ("Manager") serves as the Fund's investment
adviser. The Dreyfus Corporation ("Dreyfus") provides certain
administrative services to the Fund_see Note 3(a). Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold without a sales load. Effective August
24, 1994, Dreyfus became a direct subsidiary of Mellon Bank,
N.A.

On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The
Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of
which is Boston Institutional Group, Inc.

It is the Fund's policy to maintain a continuous net asset
value per share of $1.00 for each series; the Fund has adopted
certain investment, portfolio valuation and dividend and
distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:

(A) PORTFOLIO VALUATION: Investments are valued at
amortized
cost, which has been determined by the Fund's Board of Trustees
to represent the fair value of the Fund's investments.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain
and loss from securities transactions are recorded on the
identified cost basis. Interest income is recognized on the
accrual basis. Cost of investments represents amortized cost.

The Fund may enter into repurchase agreements with
financial institutions, deemed to be creditworthy by the Fund's
Adviser, subject to the seller's agreement to repurchase and
the Fund's agreement to resell such securities at a mutually
agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase
price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase
price plus accrued interest, the Fund will require the seller
to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller
defaults on its repurchase obligation, the Fund maintains the
right to sell the underlying securities at market value and
may claim any resulting loss against the seller.

(C) EXPENSES: Expenses directly attributable to each series
are charged to that series' operations; expenses which are
applicable to both series are allocated between them on a pro
rata basis.

(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the
Fund, with respect to both series, to declare dividends daily
from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, with respect to both
series, are normally declared and paid annually, but each
series may make distributions on a more frequent basis to
comply with the distribution requirements of the

FIRST PRAIRIE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Internal Revenue Code. However, to the extent that net realized
capital gain of either series can be reduced by capital loss
carryovers of that series, such gain will not be distributed.

(E) FEDERAL INCOME TAXES: It is the policy of each series to
continue to qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by
complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income
and excise taxes.

The Money Market Series has an unused capital loss
carryover of approximately $1,302,000 available for Federal
income tax purposes to be applied against future net securities
profits, if any, realized subsequent to December 31, 1994. The
carryover does not include net realized securities losses from
November 1, 1994 through December 31, 1994 which are treated,
for Federal income tax purposes, as arising in 1995. If not
applied, the carryover expires in 2002.

The Government Series has an unused capital loss carryover
of approximately $980,000 available for Federal income tax
purposes to be applied against future net securities profits,
if any, realized subsequent to December 31, 1994. The carryover
does not include net realized securities losses from November
1, 1994 through December 31, 1994 which are treated for
Federal income tax purposes as arising in 1995. If not applied,
$3,000 of the carryover expires in 2000 and $977,000 expires in
2002.

At December 31, 1994, the cost of investments of each
series for Federal income tax purposes was substantially the
same as the cost for financial reporting purposes (see the
Statement of Investments).

NOTE 3--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:

(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee for each series is computed at the
annual rate of .55 of 1% of the average daily value of the net
assets of each series and is payable monthly. The agreement
further provides that if in any full year the aggregate
expenses of either series, excluding interest on borrowings,
taxes, brokerage, and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the
Fund, that series may deduct from the payments to be made to
the Manager, or the Manager will bear such excess to the extent
required by state law. The most stringent state expense
limitation applicable to the Fund presently requires
reimbursement of expenses in any full year that such expenses
(exclusive of distribution expenses and certain expenses as
described above) exceed 2 1/2% of the first $30 million, 2% of
the next $70 million and 1 1/2% of the excess over $100 million
of the average value of either series' net assets in
accordance with California "blue sky" regulations. However, the
Manager has undertaken from November 2, 1994, with respect to
the Government Series, to reduce the management fee paid by
the Series, to the extent that the Series' aggregate expenses
(excluding certain expenses as described above) exceeded .40 of
1% of the Series' average daily net assets. The reduction in
management fee for the year ended December 31, 1994, pursuant
to the undertaking amounted to $29,785.

The Manager has engaged Dreyfus to assist it in providing
certain administrative services for each series pursuant to a
Master Administration Agreement between the Manager and
Dreyfus. Pursuant to its agreement with Dreyfus, the Manager
has agreed to pay Dreyfus for Dreyfus' services.

(B) The Fund has adopted a Service Plan (the "Plan")
pursuant to which each series has agreed to pay costs and
expenses in connection with advertising and marketing shares of
the Fund and payments made to one or more Service Agents
(which may include the Manager, Dreyfus and the Distributor)
based on the value of the Fund's shares owned by clients of the
Service Agent. These advertising and marketing expenses and
fees of the Service Agents may not exceed an annual rate of .25
of 1% of each series' average daily net assets. The Plan also
separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to
exceed the greater of $100,000 or .005 of 1% of each series'
average daily net assets for any full year. For the year ended
December 31, 1994, the Money Market Series and the Government
Series were charged $403,119 and $317,581, respectively,
pursuant to the Plan, substantially all of which was retained
by the Manager and Dreyfus.

(C) Prior to August 24, 1994, certain officers and
trustees of the Fund are "affiliated persons," as defined in
the Act, of the Manager or Dreyfus. Each trustee who is not an
"affiliated person" receives an annual fee of $2,500 and an
attendance fee of $500 per meeting.

(D) During the fiscal year ended December 31, 1994, an
affiliate of the Fund's Adviser purchased securities from the
Fund at an amount in excess of the secruities' fair market
value. The Fund recorded a realized loss on these sales in the
amount of $1,286,000 and $933,054 on the Money Market Series
and the Government Series, respectively, and the Fund recorded
an offsetting capital contribution from the affiliate.

NOTE 4--SUBSEQUENT EVENTS:

As of January 1, 1995, the Fund's investment adviser is First
Chicago Investment Management Company ("FCIMCO"), a newly
formed registered investment adviser and a wholly-owned
subsidiary of The First National Bank of Chicago. Effective
January 17, 1995, the Fund entered into a new administration
agreement with FCIMCO. In addition, effective January 17, 1995,
FCIMCO entered into a master sub-administration agreement with
Concord Holding Corporation ("Concord") pursuant to which
FCIMCO will pay Concord a portion of its administration fee in
consideration of Concord's providing administrative services to
the Fund. The Fund has agreed to pay FCIMCO a monthly advisory
and administration fee at the annual rate of .40% and .15%,
respectively, of the value of the Fund's average daily net
assets.

The Fund entered into a new distribution agreement with
Concord Financial Group, Inc., a wholly-owned subsidiary of
Concord which is effective January 17, 1995.

FIRST PRAIRIE MONEY MARKET FUND REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES FIRST
PRAIRIE MONEY MARKET FUND

We have audited the accompanying statement of assets and
liabilities, including the statements of investments, of First
Prairie Money Market Fund (comprising, respectively, the Money
Market Series and the Government Series) as of December 31,
1994, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial
highlights for each of the years indicated therein. 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, 1994 by
correspondence with the custodian and others. 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 each of the respective
series constituting the First Prairie Money Market Fund, at
December 31, 1994, the results of their operations for the year
then ended, the changes in their net assets for each of the two

years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally
accepted accounting principles.

(Ernst & Young LLP Signature
Logo)
New York, New York
February 7, 1995

PRINCIPAL
TAX EXEMPT INVESTMENTS--100.0% AMOUNT VALUE

- -------------- --------------
<S> <C>
<C>
ALABAMA--3.9%
City of Phenix, IDB, EIR, CP (Mead Coated Board Project):
3.55%, 1/5/95 (LOC; ABN-Amro Bank) (a). . . . $4,000,000 $4,000,000
3.65%, 2/8/95 (LOC; ABN-Amro Bank) (a). . . . 2,500,000 2,500,000
ALASKA--3.1%
City of Valdez, Marine Terminal Revenue, Refunding, CP
(Arco Transportation Project)
3.60%, Series A, 2/1/95 (LOC; Atlantic Richfield Co.) (a) 5,200,000 5,200,000
COLORADO--3.6%
Colorado Student Obligation Bond Authority, Student Loan
Revenue, VRDN:
5.05%, Series A (LOC; Student Loan Marketing Association)
(a,b). . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
5.05%, Series B (LOC; Student Loan Marketing Association)
(a,b). . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
CONNECTICUT--1.2%
State of Connecticut Special Assessment Unemployment
Compensation Advanced Fund,
Revenue (Connecticut Unemployment) 3.80%, Series C,
7/1/95 (Insured; FGIC). . . . . . . . . . . . 2,000,000 2,000,962
DISTRICT OF COLUMBIA--1.2%
District of Columbia, Revenue (Supplemental Student
Loan-Consern)
4.05%, 7/1/95 (LOC; Mitsubishi Bank) (a). . . 2,000,000 2,000,000
FLORIDA--1.2%
Sarasota County Public Hospital District, HR, CP (Sarasota
Memorial
Hospital Project)
3.60%, Series B, 1/4/95 (LOC; Sumitomo Bank) (a,b) 2,000,000 2,000,000
GEORGIA--4.6%
Burke County Development Authority, PCR (Oglethorpe Power
Corp.-Vogtle):
CP 4%, 1/11/95 (LOC; Credit Suisse) (a) . . . 2,000,000 2,000,000
VRDN 4.95%, Series A (Insured; FGIC) (b). . . 5,600,000 5,600,000
ILLINOIS--6.1%
Illinois Development Finance Authority:
IDR, VRDN (Mattoon Precision Manufacturing Project)
5.85% (LOC; Industrial Bank of Japan) (a,b). . . . . 2,500,000 2,500,000
PCR, Refunding, CP (Illinois Power Co. Project)
3.75%, Series A, 1/9/95 (LOC; Canadian Imperial
Bank of Commerce) (a) . . . . . . . . . . 1,000,000 1,000,000
Illinois Health Facilities Authority, HR, VRDN (Sisters
Services) 5.50%, Series E (Insured; MBIA) . . . . . . . 2,000,000 2,000,000
Southwestern Development Authority, SWDR, VRDN (Shell Oil Co.
Project)
4.95% (LOC; Shell Oil Co.) (a,b). . . . . . . 4,600,000 4,600,000
INDIANA--9.7%
Indiana Development Finance Authority, SWDR, CP
(Pure Air On Lake Project):
3.60%, 1/4/95 (LOC; Fuji Bank) (a). . . . . . 3,000,000 3,000,000
INDIANA (continued)
Indiana Development Finance Authority, SWDR, CP
(Pure Air On Lake Project) (continued):
3.90%, Series A, 1/11/95 (LOC; Fuji Bank) (a). . . . . . . 3,000,000 3,000,000
City of Indianapolis, RRR, VRDN (Ogden Martin Systems)
4.95% (LOC; Swiss Bank Corp.) (a,b) . . . . . 3,000,000 3,000,000
Jasper County, PCR, CP (Northern Indiana Public Service Co):
4.20%, 1/11/95 (LOC; Barclays Bank) (a) . . . 3,000,000 3,000,000
3.70%, Series A, 1/12/95 (LOC; Barclays Bank) (a)
1,350,000 1,350,000
City of Seymour, EDR, VRDN (Kobello Metal Pouder)
5.85% (LOC; Industrial Bank of Japan) (a,b) . . . . . . 2,700,000 2,700,000
IOWA--1.8%
Iowa School Corp., Warrant Certificates, Revenue
(Iowa School Cash Anticipation Program) 4.25%, Series A,
7/17/95. . . . . . . . . . . . . . . . . . . . 3,000,000 3,010,138
KANSAS--3.4%
Butler County, Solid Waste Disposal Facilities Revenue, VRDN
(Texaco Refining and Marketing) 5%, Series A (LOC; Texaco
Inc.) (a,b). . . . . . . . . . . . . . . . . . 5,600,000 5,600,000
KENTUCKY--4.5%
City of Bowling Green, Industrial Building Revenue, VRDN:
(Bando Manufacturing America Project) 5.85% (LOC;
Industrial Bank of Japan) (a,b) . . . . . . . 1,000,000 1,000,000
(Town Fastener Inc. Project) 5.85% (LOC;
Industrial Bank of Japan) (a,b) . . . . . . . 2,400,000 2,400,000
Daviess County, Solid Waste Disposal Facilities Revenue, VRDN
(Scott Paper Co. Project)
4.95%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b) 3,000,000 3,000,000
City of Walton, IDR, VRDN (Namco Inc. Project)
5.85% (LOC; Industrial Bank of Japan) (a,b) . 1,000,000 1,000,000
LOUISIANA--2.4%
State of Louisiana, CP, Refunding
3.40%, Series A, 2/15/95 (LOC: Credit Locale de France and
Fuji Bank) (a). . . . . . . . . . . . . . . . 4,000,000 4,000,000
MAINE--1.5%
State of Maine, TAN 4.50%, 6/30/95 . . . . . . 2,500,000 2,509,507
MARYLAND--1.2%
Northeast Waste Disposal Authority, RRR, Refunding, VRDN
(Hartford County)
4.90% (BPA; Credit Locale and Insured; AMBAC) (b) 2,000,000 2,000,000
MICHIGAN--3.0%
Michigan Hospital Finance Authority, VRDN:
HR, Refunding (Mount Clemens Hospital) 5.65% (LOC;
Comerica Bank) (a,b). . . . . . . . . . . . . 2,000,000 2,000,000
Revenue (Hospital Equipment Loan Program)
5.60% (LOC; First of America Bank) (a,b). 2,900,000 2,900,000
MISSOURI--1.3%
Columbia, Special Obligation, VRDN 5%, Series A (LOC;
Toronto-Dominion Bank) (a,b) . . . . . . . . . $2,200,000 $2,200,000
NEVADA--6.7%
Clark County, PCR, CP (Southern California Edison Project)
3.65%, Series A, 1/3/95 (LOC; Southern California Edison)
(a). . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Washoe County, Water Facility Revenue, CP (Sierra Pacific Power
Co. Project):
3.60%, 1/4/95 (LOC; Union Bank of Switzerland) (a) 1,000,000 1,000,000
3.65%, 1/12/95 (LOC; Union Bank of Switzerland) (a) 5,100,000 5,100,000
NEW HAMPSHIRE--.7%
New Hampshire Industrial Development Authority, PCR, VRDN
(Connecticut Light and Power Co.) 5.80% (LOC; Union
Bank of Switzerland) (a,b). . . . . . . . . . 1,100,000 1,100,000
NORTH CAROLINA--1.6%Wake County Industrial Facilities and
Pollution Control
Financing Authority, Revenue
CP (Carolina Power and Light Co. Project) 3.70%, 2/14/95
(LOC; Fuji Bank) (a). . . . . . . . . . . . . 2,700,000 2,700,000
OREGON--2.1%
State of Oregon, VRDN (Veteran Welfare Bond) 4.95%
(LOC; Mitsubishi Bank) (a,b). . . . . . . . . 3,400,000 3,400,000
PENNSYLVANIA--3.0%
Carbon County Industrial Development Authority, RRR, CP
(Panther Creek
Partners Project) 3.65%, Series A, 1/3/95
(LOC; National Westminster Bank) (a). . . . . $1,000,000 $1,000,000
Venango Industrial Development Authority, RRR, CP (Scrubgrass
Project)
3.80%, 2/1/95 (LOC; National Westminster Bank) (a) 4,000,000 4,000,000
RHODE ISLAND--1.8%
Providence Off State Public Packaging Corp., Exempt Facilities
Revenue, VRDN
(Washington Street Garage Corp. Project)
5.75% (LOC; Morgan Guaranty Trust Co.) (a,b). 3,000,000 3,000,000
TENNESSEE--4.5%
Memphis-Shelby County Airport Authority, Revenue, CP
4.35%, 4/6/95 (LOC; Canadian Imperial Bank of Commerce) (a) 2,405,000 2,405,000
Metro Government of Nashville and Davidson Counties, Facilities
Board Revenue, CP
(Vanderbilt University) 3.75%, 1/9/95 (BPA; Vanderbilt
University). . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
TEXAS--17.6%
Austin County Industrial Development Corp., IDR, CP
(Travis and Williamson Counties Combined Utilities):
3.60%, 1/4/95 (LOC; Swiss Bank Corp.) (a) 3,000,000 3,000,000
3.45%, 1/18/95 (LOC; Swiss Bank Corp.) (a) 2,800,000 2,800,000
Brazos Higher Education Authority Inc., Student Loan Revenue
3.80%, Series B-1, 6/1/95 (LOC; Student Loan Marketing
Association) (a). . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
TEXAS (continued)
Brazos River Authority, PCR, Refunding, CP (Texas Utilities Co.
Project)
3.70%, 2/9/95 (LOC; Canadian Imperial Bank of Commerce) (a) $3,000,000 $3,000,000
Calhoun County Industrial Development Authority, Port Revenue,
VRDN
(Formosa Plastics Corp.) 7% (LOC; Bank of America) (a,b) 2,000,000 2,000,000
Capital Health Facilities Development Corp., Health Facilities
Revenue, VRDN
(Island on Lake Travis) 5.10% (LOC; Credit Suisse) (a,b) 3,900,000 3,900,000
Dallas-Fort Worth Regional Airport Revenue, Joint Revenue,
Refunding, CP
3.60%, 2/1/95 (LOC; National Westminster Bank) (a) 1,000,000 1,000,000
Gulf Coast Industrial Development Authority, SWDR, VRDN
(Citgo Petroleum Corp. Project) 5% (LOC; Wachovia Bank of
Georgia) (a,b). . . . . . . . . . . . . . . . 7,000,000 7,000,000
Port of Port Arthur Naval District, PCR, VRDN (Star Enterprises
Project)
5.75% (LOC; Swiss Bank Corp.) (a,b) . . . . . 4,400,000 4,400,000
VIRGINIA--.8%
Peninsula Ports Authority, Coal Terminal Revenue, Refunding,
VRDN
(Dominion Terminal Project) 4.75%, Series D
(LOC; Barclays Bank) (a,b). . . . . . . . . . 1,240,000 1,240,000
WASHINGTON--1.7%
Port of Vancouver, Revenue, VRDN (United Grain Ore)
5.10% (LOC; Sumitomo Bank) (a,b). . . . . . . 2,800,000 2,800,000
WEST VIRGINIA--1.2%
West Virginia Hospital Finance Authority, HR, VRDN (Saint
Mary's Hospital Project)
5.55% (LOC; Mitsubishi Bank) (a,b). . . . . . $2,000,000 $2,000,000
WISCONSIN--1.3%
Wisconsin Health and Educational Facilities Authority, Revenue,
CP
(Alexian Village Milwaukee Inc.) 3.75%, 2/8/95
(LOC; Sumitomo Bank) (a). . . . . . . . . . . 2,100,000 2,100,000
WYOMING--3.3%
Lincoln County, PCR, CP (Exxon Project)
3.80%, Series A, 1/30/95 (Guaranteed by; Exxon Corp.)
5,500,000 5,500,000
TOTAL INVESTMENTS (cost $165,515,607). . . . . $165,515,607

</TABLE>

<CAPTION>
PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
__________________________________________________________________________________________________
SUMMARY OF ABBREVIATIONS
__________________________________________________________________________________________________
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation IDR Industrial Development Revenue
BPA Bond Purchase Agreement LOC Letter of Credit
CP Commercial Paper MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue PCR Pollution Control Revenue
EIR Environment Improvement Revenue RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SWDR Solid Waste Disposal Revenue
HR Hospital Revenue TAN Tax Anticipation Notes
IDB Industrial Development Board VRDN Variable Rate Demand Notes

</TABLE>

<TABLE>

<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
__________________________________________________________________________________________________
MOODY'S
VALUE OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------------- --------------------------------- --------------------------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 100.0%

===
</TABLE>

NOTES TO STATEMENT OF INVESTMENT:
________________________________________________________________
_
_______________________________
(a) Secured by letters of credit. At December 31, 1994, 79.6%
of the Fund's net assets are backed by letters of credit
issued by domestic banks, foreign banks, Government
Agencies and Corporations.
(b) Securities payable on demand. The interest rate, which is
subject to change, is based upon bank prime rates or an
index of market interest rates.
(c) P1 and A1 are the highest ratings assigned tax-exempt
commercial paper by Moody's and Standard & Poor's,
respectively.

See notes to financial statements.
<PAGE>
<TABLE>

FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a) $165,515,607
Cash. . . . . . . . . . . . . . . . . . . . . 2,878,018
Receivable for investment securities sold . . 4,080,920
Interest receivable . . . . . . . . . . . . . 877,539
Prepaid expenses. . . . . . . . . . . . . . . 33,510
173,385,594
LIABILITIES:
Due to The First National Bank of Chicago . . $80,415
Due to The Dreyfus Corporation. . . . . . . . 97,284
Accrued expenses. . . . . . . . . . . . . . . 77,863 255,562
---------- --------------
NET ASSETS . . . . . . . . . . . . . . . . . . $173,130,032
=====
REPRESENTED BY:
Paid-in capital . . . . . . . . . . . . . . . $173,170,062
Accumulated net realized (loss) on investments (40,030)
----------------
NET ASSETS at value applicable to 173,183,640 shares
outstanding (unlimited
number of $.01 par value shares of Beneficial Interest
authorized). . . . . . . . . . . . . . . . . . $173,130,032
=====
NET ASSET VALUE, offering and redemption price per share
($173,130,032 / 173,183,640 shares) . . . . . $1.00
=====

</TABLE>

See notes to financial statements.
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994

<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME . . . . . . . . . . . . . . . $5,853,085
EXPENSES:
Management fee-Note 2(a) . . . . . . . . $1,069,636
Shareholder servicing costs-Note 2(b) . . . 551,662
Professional fees. . . . . . . . . . . . 60,273
Custodian fees . . . . . . . . . . . . . 33,583
Registration fees. . . . . . . . . . . . 28,368
Prospectus and shareholders' reports-Note 2(b) 26,815
Trustees' fees and expenses-Note 2(c). . 13,108
Miscellaneous. . . . . . . . . . . . . . 31,736
--------
1,815,181
Less-reduction in management fee
due to undertakings-Note 2(a). . . . 485,987
---------
TOTAL EXPENSES . . . . . . . . . . 1,329,194
----------
INVESTMENT INCOME--NET . . . . . . . . . . . . 4,523,891
NET REALIZED (LOSS) ON INVESTMENTS--Note 1(b). (36,537)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,487,354
====
</TABLE>

See notes to financial statements.
<PAGE>
<TABLE>

FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED DECEMBER 31,
1993 1994
------------ --------------
<S> <C> <C>
OPERATIONS:
Investment income-net . . . . . . . . $3,362,434 $ 4,523,891
Net realized (loss) on investments. . (2,293) (36,537)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . 3,360,141 4,487,354
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net . . . . . . . . (3,362,434) (4,523,891)
-------------- ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . 409,972,617 428,067,086
Dividends reinvested. . . . . . . . . 1,647,251 2,261,400
Cost of shares redeemed . . . . . . . (443,919,511) (434,859,851)
-------------- --------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS . . . . (32,299,643) (4,531,365)
-------------- --------------
TOTAL (DECREASE) IN NET ASSETS (32,301,936) (4,567,902)
-------------- --------------
NET ASSETS:

Beginning of year . . . . . . . . . . 209,999,870 177,697,934
-------------- -------------
End of year . . . . . . . . . . . . . $177,697,934 $173,130,032
===== =====

</TABLE>

See notes to financial statements.
<PAGE>

<TABLE>

YEAR ENDED DECEMBER 31,

----------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $.9999 $.9999 $.9999 $.9999 $.9999
------ ------ ------ ------ ------
INVESTMENT OPERATIONS;
Investment income-net . . .0527 .0413 .0236 .0174 .0234
Net realized (loss) on investments --- --- -- --- (.0002)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS. . . . . . . . .0527 .0413 .0236 .0174 .0232
------ ------ ------ ------- ------
DISTRIBUTIONS;
Dividends from investment income-net (.0527) (.0413) (.0236) (.0174) (.0234)
------ ------ ------ ------ ------
Net asset value, end of year $.9999 $.9999 $.9999 $.9999 $.9997
=== === === === ===
TOTAL INVESTMENT RETURN. . 5.40% 4.21% 2.38% 1.75% 2.36%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.00% .98% .95% .79% .68%
Ratio of net investment income to
average net assets. . . . 5.27% 4.11% 2.38% 1.74% 2.33%
Decrease reflected in above expense
ratios due to undertakings by
the Manager . . . . . . --- --- .01% .16% .25%
Net Assets, end of year (000's Omitted) $176,009 $233,675 $210,000 $177,698 $173,130

</TABLE>

See notes to financial statements.
<PAGE>

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:

The Fund is registered under the Investment Company Act of
1940 ("Act") as a diversified open-end management investment
company. The First National Bank of Chicago ("Manager") serves
as the Fund's investment adviser. The Dreyfus Corporation
("Dreyfus") provides certain administrative services to the
Fund-see Note 2(a). Dreyfus Service Corporation, until August
24, 1994, a wholly-owned subsidiary of Dreyfus, acted as the
distributor of the Fund's shares, which are sold without a
sales load. Effective August 24, 1994, the Manager became a
direct subsidiary of Mellon Bank, N.A.

On August 24, 1994, Premier Mutual Fund Services, Inc.
(the "Distributor") was engaged as the Fund's distributor. The
Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of
which is Boston Institutional Group, Inc.

It is the Fund's policy to maintain a continuous net asset
value per share of $1.00; the Fund has adopted certain
investment, portfolio valuation and dividend and distribution
policies to enable it to do so. There is no assurance, however,
that the Fund will be able to maintain a stable net asset value
of $1.00.

Effective February 1, 1994, the Fund changed its name from
"First Prairie Tax Exempt Money Market" to "First Prairie
Municipal Money Market."

(A) PORTFOLIO VALUATION: Investments are valued at
amortized cost, which has been determined by the Fund's Board
of Trustees to represent the fair value of the Fund's
investments.

(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis.
Interest income, adjusted for amortization of premiums and
original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the
identified cost basis.

(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the
Fund to declare dividends daily from investment income-net.
Such dividends are paid monthly. Dividends from net realized
capital gain, if any, are normally declared and paid annually,
but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can
be offset by capital loss carryovers, it is the policy of the
Fund not to distribute such gain.

(D) FEDERAL INCOME TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, which
can distribute tax exempt dividends, by complying with the
applicable provisions of the Internal Revenue Code, and to make
distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income
and excise taxes.

The Fund has an unused capital loss carryover of
approximately $4,000 available for Federal income tax purposes
to be applied against future net securities profits, if any
realized subsequent to December 31, 1994. The carryover does
not include net realized securities losses from November 1,
1994 through December 31, 1994 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied,
$1,000 of the carryover expires in 1999, $2,000 expires in 2001
and $1,000 expires in 2002. As a result of the expiration of a
prior year capital loss carryover $13,578 was reclassified from
accumulated net realized loss to additional paid in capital.

At December 31, 1994, the cost of investments for Federal
income tax purposes was substantially the same as the cost for
financial reporting purposes (see the Statement of
Investments).

NOTE 2--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:

(A) Pursuant to a management agreement ("Agreement") with
the Manager, the management fee is computed at the annual rate
of .55 of 1% of the average daily value of the Fund's net
assets and is payable monthly. The Agreement further provides
that if in any full fiscal year the aggregate expenses of the
Fund exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct
from the payments to be made to the Manager, or the Manager
will bear such excess to the extent required by state law. The
most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full year
that such expenses (exclusive of distribution expenses and
certain expenses as described above) exceed 2 1/2% of the first
$30 million, 2% of the next $70 million and 1 1/2% of the
excess over $100 million of the average value of the Fund's net
assets in accordance with California "blue sky" regulations.
However, the Manager has undertaken from January 1, 1994
through April 25, 1994 to reduce the management fee paid by the
Fund to the extent that the Fund's aggregate expenses
(excluding certain expenses as described above) exceeded
specified annual percentages of the Fund's average daily net
assets. The Manager has currently undertaken from April 26,
1994 to assume all expenses of the Fund in excess of an annual
rate of .70 of 1% of the Fund's average daily net assets. The
reduction in management fee, pursuant to the undertakings,
amounted to $485,987 for the year ended December 31, 1994.

The undertaking may be modified by the Manager from time
to time, provided that the resulting expense reimbursement
would not be less than the amount required pursuant to the
Agreement.

The Manager has engaged Dreyfus to assist it in providing
certain administrative services for the Fund pursuant to a
Master Administration Agreement between the Manager and
Dreyfus. Pursuant to its agreement with Dreyfus, the Manager
has agreed to pay Dreyfus for Dreyfus' services.

(B) The Fund has adopted a Service Plan (the "Plan")
pursuant to which it has agreed to pay costs and expenses in
connection with advertising and marketing shares of the Fund
and payments made to one or more Service Agents (which may
include the Manager, Dreyfus and the Distributor) based on the
value of the Fund's shares owned by clients of the Service
Agent. These advertising and marketing expenses and fees of the
Service Agents may not exceed an annual rate of .25 of 1% of
the Fund's average daily net assets. The Plan also separately
provides for the Fund to bear the costs of preparing, printing
and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater
of $100,000 or .005 of 1% of the Fund's average daily net
assets for any full year. For the year ended December 31, 1994,
the Fund was charged $504,645 pursuant to the Plan,
substantially all of which was retained by the Manager and
Dreyfus.

(C) Prior to August 24, 1994, certain officers and
trustees of the Fund were "affiliated persons," as defined in
the Act, of the Manager or Dreyfus Service Corporation. Each
trustee who is not an "affiliated person" receives an annual
fee of $2,500 and an attendance fee of $500 per meeting.

NOTE 3--SUBSEQUENT EVENTS:

As of January 1, 1995, the Fund's investment adviser is
First Chicago Investment Management Company ("FCIMCO"), a newly
formed registered investment adviser and a wholly-owned
subsidiary of The First National Bank of Chicago. Effective
January 17, 1995, the Fund entered into a new administration
agreement with FCIMCO. In addition, effective January 17, 1995,
FCIMCO entered into a master sub-administration agreement with
Concord Holding Corporation ("Concord") pursuant to which
FCIMCO will pay Concord a portion of its administration fee in
consideration of Concord's providing administrative services to
the Fund. The Fund has agreed to pay FCIMCO a monthly advisory
and administration fee at the annual rate of .40% and .15%,
respectively, of the value of the Fund's average daily net
assets.

The Fund entered into a new distribution agreement with
Concord Financial Group, Inc., a wholly-owned subsidiary of
Concord which is effective January 17, 1995.

<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE
1
_______________________________________________________________
____________________________
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND

We have audited the accompanying statement of assets and
liabilities of First Prairie Municipal Money Market Fund,
including the statement of investments, as of December 31,
1994, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights
for each of the years indicated therein. 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, 1994 by
correspondence with the custodian. 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 First Prairie Municipal
Money Market Fund, at December 31, 1994, 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 indicated years, in
conformity with generally accepted accounting principles.

(Ernst & Young LLP Signature Logo)

New York, New York
February 3, 1995

Prairie Funds
Equity Income Fund
Portfolio of Investments
April 30, 1995 (Unaudited)
<CAPTION>

Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
Convertible Bonds - 7.0%
Banks - 2.4%
Bank of New York, Inc., Sub Convertible
Debenture 7.50% 8/15/2001 $ 3,139 $ 5,304,511

Computer Software and Peripherals - 1.0%
Seagate Technology, Convertible Debenture 6.75% 5/01/2012 2,285 2,184,736

Health Industries - 1.2%
Genesis Health Ventures, Inc., Convertible
Senior Sub Debentures 6.00% 11/30/2003 1,177 1,508,079
Multicare Cos., Inc., Debentures 144A* 7.00% 3/15/2003 1,000 1,020,000
2,528,079

Homebuilders - 0.4%
Toll Corp., Guaranteed Senior Sub
Convertible Note 4.75% 1/15/2004 1,177 903,376

Natural Gas - 0.3%
Swift Energy Co., Sub Convertible Debenture 6.50% 6/30/2003 589 566,448

Restaurants - 0.8%
Starbucks Corp., Sub Convertible Debenture 4.50% 8/01/2003 1,785 1,668,686

Telecommunications - 0.9%
California Microwave, Inc., Sub Convertible
Note 5.25% 12/15/2003 1,700 2,048,500

Total Convertible Bonds
(cost $14,598,698) 15,204,336

Shares
CONVERTIBLE PREFERRED STOCKS - 11.1%
Automobiles - 2.7%
Ford Motor Company, Series A, $4.20 66,699 5,877,849

Banks - 3.1%
Citicorp, Series 13, $5.375 17,000 2,163,250
Citicorp, Series 15, $1.217 234,407 4,708,140
6,871,390
</TABLE>

_________________
See Notes to Financial Statements.

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Consumer Goods and Services - 0.9%
Sci Finance LLC, Series A, $3.125 35,000 $1,942,500

Financial - 1.5%
First U.S.A., Inc., 6.25% 82,393 3,182,430

Beverages, Food and Tobacco - 1.2%
Conagra, Inc., Series E, $1.6875 80,000 2,730,000

Insurance - 0.8%
Conseco, Inc., Series D, 6.50% 39,235 1,657,679

Steel - 0.9%
WHX Corp., Series B, $3.75 45,694 1,919,148

Total Convertible Preferred Stock
(cost $22,801,200) 24,180,996

COMMON STOCKS - 69.0%
Automobiles - 2.5%
Ford Motor Company 125,551 3,389,877
General Motors Corporation 47,081 2,124,530
5,514,407

Automotive Parts & Equipment - 2.3%
Echlin Inc. 135,000 4,927,500

Banks - 3.0%
Bank of Boston Corp. 71,000 2,378,500
Nationsbank Corp. 82,392 4,119,600
6,498,100

Beverages, Food and Tobacco - 2.1%
Hershey Foods Corporation 20,000 1,050,000
Philip Morris Companies Inc. 50,841 3,444,478
4,494,478

Computer Software and Peripherals - 4.4%
International Business Machines 73,000 6,916,750
Salomon, Inc. HWP ELK 15,000 1,419,375
Salomon, Inc. MSFT ELK 13,000 1,298,375
9,634,500

Consumer Products - 2.5%
Clorox Company 94,006 5,522,853

</TABLE>
___________
See Notes to Financial Statements.

Value
Description Shares (Note 2(a))
<S> <C> <C>
Electrical Equipment - 2.0%
Emerson Electric Company 48,000 $ 3,228,000
Hubbell, Inc., Class B 20,000 1,075,000
4,303,000

Insurance - 3.0%
Aon Corporation 147,130 5,425,419
Exel Limited 24,900 1,132,950
6,558,369

Oil & Gas - 13.7%
Atlantic Richfield Co. 23,070 2,641,515
British Petroleum PLC ADR 64,000 5,512,000
Mobil Corp. 105,000 9,961,875
Occidental Petroleum Corporation 156,938 3,609,574
Texaco, Inc. 78,469 5,365,318
Unocal Corp. 98,000 2,817,500
29,907,782

Pharmaceuticals - 8.0%
Bristol Myers Squibb Co. 50,000 3,256,250
Pfizer, Inc. 85,000 7,363,125
Warner Lambert Co. 86,000 6,858,500
17,477,875

Real Estate Investment Trusts - 1.9%
Amli Residential Properties Trust 110,000 2,007,500
National Health Investors, Inc. 80,000 2,100,000
4,107,500

Retail Stores - 3.5%
Dayton Hudson Corp. 30,000 2,013,750
May Department Stores 156,938 5,689,002
7,702,752

Telecommunications - 9.5%
British Telecom PLC ADR 35,311 2,206,937
GTE Corp. 196,173 6,694,404
Sprint Corp. 156,938 5,178,954
U.S. West, Inc. 156,938 6,493,310
20,573,605

</TABLE>
__________
See Notes to Financial Statements.

Value
Description Shares (Note 2(a))
<S> <C> <C>
Utilities - 10.6%
Cinergy Corp. 103,579 $ 2,602,422
Detroit Edison Company 196,173 5,541,887
Pacific Gas & Electric Company 54,928 1,476,190
Peco Energy Co. 129,769 3,341,552
Texas Utilities Company 156,938 5,120,102
United Illuminating Company 156,938 5,041,633
23,123,786

Total Common Stocks
(cost $140,776,489) 150,346,507

</TABLE>

<TABLE>

Principal
Maturity Amount
Rate Date (000)
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 12.6%
Euro Time Deposit - 12.6%
Mitsubishi Bank Ltd. (cost $27,430,000) 6.00% 5/01/1995 $ 27,430 27,430,000

Total Investments
(cost $205,606,387) - 99.7% 217,161,839
Other assets in excess of liabilities - 0.3% 706,757

TOTAL NET ASSETS - 100.0% $ 217,868,596

_________
* Restricted security.
ADR - American Depository Receipts.
ELK - Equity-Linked Securities.

</TABLE>
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Growth Fund
Portfolio of Investments
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>

Value
Description Shares (Note 2(a))
<S> <C> <C>
COMMON STOCK - 87.7%
Advertising and Marketing Services - 0.6%
Interpublic Group of Companies, Inc. 16,000 $ 608,000
Omnicon Group 20,000 1,112,500
1,720,500

Apparel - 0.3%
Tommy Hilfiger Corp. 32,400 745,200

Automotive Parts and Equipment - 1.3%
Echlin, Inc. 90,000 3,285,000
Superior Industries International, Inc. 15,000 397,500
3,682,500

Banking - 2.2%
Citicorp 115,000 5,333,125
Nationsbank Corp. 20,000 1,000,000
6,333,125

Beverages, Food and Tobacco - 13.7%
Conagra, Inc. 190,000 6,317,500
Dean Foods Co. 175,000 4,987,500
Hershey Foods Corporation 80,000 4,200,000
Hormel Foods Corp. 44,624 1,221,582
Hudson Foods, Inc., Class A 90,000 1,552,500
Nabisco Holdings Corp., Class A 50,000 1,393,750
Pepsico, Inc. 140,000 5,827,500
Philip Morris Companies, Inc. 100,000 6,775,000
Sara Lee Corp. 240,000 6,690,000
38,965,332

Biotechnology - 0.1%
Calgene, Inc. 33,819 240,960

Business Equipment and Services - 0.6%
Infocus Systems, Inc. 30,000 802,500
Proxima Corp. 31,000 1,023,000
1,825,500
</TABLE>
_______
See Notes to Financial Statements.

<PAGE>

<TABLE>

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Chemicals - 2.4%
Airgas, Inc. 50,000 $ 1,118,750
Material Sciences Corp. 20,000 362,500
Praxair, Inc. 220,000 5,225,000
6,706,250

Computer Software and Peripherals - 8.4%
Compaq Computer Corp. 80,000 3,040,000
Computer Associates International, Inc. 75,000 4,828,125
First Data Corp. 50,000 2,812,500
Intel Corporation 60,000 6,142,500
International Business Machines 75,000 7,106,250
23,929,375

Consumer Goods and Services - 8.0%
Clorox Company 100,000 5,875,000
Hillenbrand Industries, Inc. 50,000 1,481,250
Kimberly Clark Corp. 120,000 6,795,000
Service Corp. International 250,000 7,062,500
Stewart Enterprises, Inc., Class A 52,000 1,430,000
22,643,750

Consumer Non-Durables - 0.9%
Alberto-Culver Co., Class A 60,000 1,650,000
American Safety Razor Co. 80,000 1,000,000
2,650,000

Electronics - 1.5%
Check Point Systems 10,000 211,250
Molex, Inc., Class A 75,000 2,700,000
Sanmina Corp. 35,300 1,204,613
4,115,863

Entertainment and Leisure - 1.4%
Carnival Corp., Class A 30,000 746,250
Time Warner, Inc. 90,000 3,296,250
4,042,500

Forest and Paper Products - 1.3%
Union Camp Corporation 73,638 3,691,105

</TABLE>
________
See Notes to Financial Statements.

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Health Industries - 6.6%
American Medical Response, Inc. 50,000 $1,281,250
Amerisource Health Corp., Class A 50,000 1,106,250
Emphesys Financial Group, Inc. 55,000 1,450,625
Genesis Health Ventures, Inc. 34,000 926,500
Healthcare & Retirement Corp. 20,000 565,000
Horizon Healthcare, Inc. 100,000 2,087,500
Multicare Cos.,Inc. 60,000 1,230,000
Rural/Metro Corp. 65,000 1,218,750
Sofamor/Danek Group, Inc. 120,000 2,910,000
Sullivan Dental Products, Inc. 68,300 922,050
Summit Care Corp. 80,343 1,647,031
US Healthcare, Inc. 130,000 3,477,500
18,822,456

Insurance - 11.0%
Ace Limited 40,000 1,060,000
Aflac, Inc. 30,000 1,237,500
AMBAC, Inc. 20,000 815,000
American International Group, Inc. 60,000 6,405,000
American Re Corp. 30,000 1,140,000
Aon Corporation 180,000 6,637,500
Chubb Corporation 45,000 3,600,000
Excel Limited 60,000 2,730,000
General Re Corp. 30,000 3,821,250
Integon Corp. 105,200 1,643,750
National Re Corporation 40,000 1,210,000
Sphere Drake Holdings Ltd. 60,000 975,000
31,275,000

Manufacturing - 2.0%
Corning, Inc. 170,000 5,673,750

Oil - Integrated - 3.0%
British Petroleum PLC ADR 60,000 5,167,500
Unocal Corp. 120,000 3,450,000
8,617,500

Pharmaceuticals - 9.6%
AL Pharmaceuticals, Inc. 45,000 1,074,375
Elan Corp. PLCADR 40,000 1,415,000
lvax Corp. 100,000 2,587,500
Johnson & Johnson 111,859 7,270,835
Pfizer, Inc. 85,000 7,363,125
Warner Lambert Co. 95,000 7,576,250
27,287,085
</TABLE>
________
See Notes to Financial Statements.

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Pollution Control - 1.9%
Waste Management International PLC 75,000 $ 646,875
WMX Technologies, Inc. 170,000 4,632,500
5,279,375

Restaurants - 0.9%
Hometown Buffet, Inc. 60,000 712,500
IHOP Corp. 45,000 1,001,250
Starbucks Corp. 40,000 940,000
2,653,750

Retail and Wholesale Distribution - 0.2%
Corporate Express, Inc. 16,700 471,775

Retail Stores - 2.5%
Circuit City Stores, Inc. 30,000 776,250
Eckerd Corp. 55,000 1,601,875
May Department Stores Company 100,000 3,625,000
Sportsmart Inc., Class A, Non-voting Shares 50,000 337,500
Sportsmart Inc., Voting Shares 64,152 625,482
6,966,107

Telecommunications - 6.8%
Alltel Corp. 19,000 470,250
Centennial Cellular Corp. 30,000 420,000
Century Telephone Enterprises, Inc. 30,000 892,500
DSC Communications Corp. 45,000 1,665,000
General Instruments Corp. 30,000 1,023,750
MCI Communications Corp. 270,000 5,872,500
Sprint Corp. 160,000 5,280,000
U.S. West, Inc. 90,000 3,723,750
19,347,750

Utilities - 0.5%
Aes Corporation 80,000 1,380,000

Total Common Stock
(cost $232,929,016) 249,066,508

</TABLE>
- --------
See Notes to Financial Statements.

<CAPTION>
Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 13.8%
Euro Time Deposit - 13.8%
Mitsubishi Bank Ltd.(cost $38,993,000) 6.00% 5/01/1995 $ 38,993 $ 38,993,000

Total Investments
(cost $271,922,016) - 101.5% 288,059,508
Liabilities in excess of other assets - (1.5%) (4,188,950)
TOTAL NET ASSETS - 100.0% $283,870,558

</TABLE>
- ----------
ADR - American Depository Receipts.

See Notes to Financial Statements.

<PAGE>

Prairie Funds
Special Opportunities Fund
Portfolio of Investments
April 30, 1995 (Unaudited)

Value
Description Shares (Note 2(a))
<S> <C> <C>
COMMON STOCKS - 86.2%
Advertising and Marketing Services - 1.6%
Interpublic Group of Companies, Inc. 12,000 $ 456,000
Omnicon Group 10,000 556,250
1,012,250

Apparel - 0.8%
Tommy Hilfiger Corp. 24,100 554,300

Automotive Parts and Equipment - 1.0%
Armor All Products Corp. 12,068 238,343
Superior Industries International, Inc. 15,000 397,500
635,843

Beverages, Food and Tobacco - 1.7%
Hudson Foods, Inc., Class A 63,235 1,090,804

Biotechnology - 0.7%
Calgene, Inc. 62,471 445,106

Broadcasting - 1.5%
Infinity Broadcasting Corp., Class A 23,000 980,375

Business Equipment and Services - 3.5%
Infocus Systems, Inc. 39,000 1,043,250
Proxima Corp. 37,000 1,221,000
2,264,250

Chemicals - 3.1%
Airgas, Inc. 45,000 1,006,875
Material Sciences Corp. 55,000 996,875
2,003,750

Consumer Durables - 1.0%
Industrie Natuzzi SPA ADR 17,353 648,568

Consumer Goods and Services - 1.9%
Service Corp. International 43,000 1,214,750

</TABLE>
__________
See Notes to Financial Statements.

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Consumer Non-Durables - 3.1%
Alberto-Culver Co., Class A 45,000 $ 1,237,500
American Safety Razor Co. 60,000 750,000
1,987,500

Electronics - 4.2%
Check Point Systems 6,000 126,750
Methode Electronics, Inc., Class A 20,000 345,000
Molex, Inc. 28,000 1,057,000
Sanmina Corp. 34,000 1,160,250
2,689,000

Entertainment and Leisure - 1.8%
Royal Caribean Cruises Ltd. 48,000 1,146,000

Finance - 0.6%
First U.S.A., Inc. 10,000 425,000

Health Industries - 22.2%
American Medical Response, Inc. 45,000 1,153,125
Amerisource Health Corp., Class A 35,000 774,375
Emphesys Financial Group, Inc. 50,000 1,318,750
Genesis Health Ventures, Inc. 40,000 1,090,000
Healthcare & Retirement Corp. 41,000 1,158,250
Horizon Healthcare Corp. 60,000 1,252,500
Multicare Cos.,Inc. 40,000 820,000
Quintiles Transnational Corp. 17,353 691,951
Rural/Metro Corp. 80,000 1,500,000
Sofamor/Danek Group, Inc. 95,000 2,303,750
Sullivan Dental Products, Inc. 77,800 1,050,300
Summit Care Corp. 60,000 1,230,000
14,343,001

Insurance - 9.4%
Ace Limited 25,000 662,500
AMBAC, Inc. 24,294 989,980
American Re Corp. 27,000 1,026,000
Integon Corp. 76,353 1,193,016
National Re Corporation 35,000 1,058,750
Sphere Drake Holdings Ltd. 68,024 1,105,390
6,035,636

Investment Management - 1.0%
Duff and Phelps Corp. 62,471 679,372

Natural Gas - 0.5%
Swift Energy Co. 30,000 296,250

</TABLE>
__________
See Notes to Financial Statements.

<PAGE>

<TABLE>

<CAPTION>
Value
Description Shares (Note 2(a))
<S> <C> <C>
Pharmaceuticals - 7.8%
AL Pharmaceuticals, Inc. 65,000 1,551,875
Elan Corp. PLC ADR 50,000 1,768,750
lvax Corp. 66,000 1,707,750
5,028,375

Pollution Control - 0.9%
Waste Management International PLC ADR 65,000 560,625

Railroad Equipment - 2.0%
Johnstown America Industries, Inc. 100,000 1,275,000

Real Estate Development - 1.9%
Stewart Enterprises, Inc., Class A 45,000 1,237,500

Restaurants - 2.6%
Hometown Buffet, Inc. 37,400 444,125
IHOP Corp. 29,000 645,250
Starbucks Corp. 24,294 570,909
1,660,284

Retail and Wholesale Distribution - 0.7%
Corporate Express, Inc. 15,300 432,225

Retail Stores - 3.2%
Eckerd Corp. 33,000 961,125
Officemax, Inc. 20,129 515,806
Sportsmart, Inc., Class A, Non-voting Shares 92,000 621,000
2,097,931

Telecommunications - 5.1%
Centennial Cellular Corp., Class A 30,000 420,000
Century Telephone Enterprises, Inc. 42,000 1,249,500
DSC Communications Corp. 22,000 814,000
General Instruments Corp. 23,000 784,875
3,268,375

Utilities - 2.4%
Aes Corporation 65,000 1,121,250
Public Service Co. of New Mexico 35,000 446,250
1,567,500

Total Common Stocks
(cost $53,058,945) 55,579,570

</TABLE>

_____________
See Notes to Financial Statements.

<PAGE>

<TABLE>

<CAPTION>
Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 15.2%
Euro Time Deposit - 15.2%
Mitsubishi Bank Ltd. (cost $9,850,000) 6.00% 5/01/1995 $ 9,850 $ 9,850,000

Total Investments
(cost $62,908,945) - 101.4% 65,429,570
Liabilities in excess of other assets - (1.4%) (927,833)
TOTAL NET ASSETS - 100.0% $64,501,737

_____________
ADR - American Depository Receipts.
</TABLE>

See Notes to Financial Statements.

<PAGE>

Prairie Funds
International Bond Fund
Portfolio of Investments
April 30, 1995 (Unaudited)
<TABLE>

Principal
Maturity Amount Value
Description Rate Date (000)* (Note 2(a))
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS - 4.3%
British Pounds Sterling - 1.8%
Barclays Bank 10.25% 12/10/1997 $ 120 $ 200,233

French Francs - 2.5%
Unilever NV 9.875% 9/04/1997 1,300 278,790

Total Corporate Obligations
(cost $ 456,789) 479,023

FOREIGN GOVERNMENT OBLIGATIONS - 78.9%
Belgium Francs - 4.6%
Belgium Government 6.50% 3/31/2005 16,000 512,800

British Pounds Sterling - 5.8%
United Kingdom Exchequer 12.25% 3/26/1999 250 453,496
United Kingdom Treasury Gilt 8.75% 9/01/1997 120 196,315
649,811

Canada Dollars - 4.9%
Canadian Government 10.75% 3/15/1998 500 395,049
Canadian Government 9.75% 10/01/1997 200 153,507
548,556

Danish Krone - 3.4%
Kingdom of Denmark 9.00% 11/15/1998 2,000 380,332

French Francs - 6.9%
France O.A.T. 8.50% 6/25/1997 2,800 585,861
French Government 5.50% 4/25/2004 1,100 192,192
778,053

German Deutschemarks - 12.1%
Austria Republic 6.00% 4/01/1998 600 438,426
Bundesrepublic 9.00% 10/20/2000 600 482,225
Deutsche Bundespost 7.50% 8/02/2004 600 442,333
1,362,984

Italian Lira - 7.1%
Italy Government 8.50% 1/01/1999 1,500,000 793,500

</TABLE>
_____________
See Notes to Financial Statements.

<PAGE>

<TABLE>

<CAPTION>
Principal
Maturity Amount Value
Description Rate Date (000)* (Note 2(a))
<S> <C> <C> <C> <C>
Japanese Yen - 23.9%
Japan Development Bank 6.50% 9/20/2001 $ 35,000 $ 494,445
Japan Government Bank 6.70% 9/20/2001 30,000 428,190
Japan Government Bank 6.50% 6/20/2001 30,000 422,550
Japan Government Bank 6.30% 9/20/2001 30,000 419,520
Japan Government Bank 6.00% 12/20/2001 30,000 414,330
Japan Government Bank 4.50% 12/20/2004 40,000 511,480
2,690,515

Netherlands Guilders - 6.3%
Netherlands Government 5.75% 1/15/2004 1,200 713,380

Spanish Pesetas - 3.9%
Spanish Government 8.00% 5/30/2004 70,000 444,080

Total Foreign Government
(amortized cost $8,312,078) 8,874,011

SUPERNATURAL OBLIGATIONS - 13.1%
German Deutschemarks - 4.0%
European Investment Bank 7.50% 11/04/2002 600 449,148

Japanese Yen - 9.1%
Asian Development Bank 5.00% 2/05/2003 40,000 527,280
Interamerican Development Bank 7.25% 5/15/2000 35,000 499,380
1,026,660

Total Supernatural Obligations
(cost $1,214,881) 1,475,808

SHORT-TERM INVESTMENTS - 0.5%
U.S. Treasury Bills - 0.5%
U.S. Treasury Bills (cost $59,907) 5.69%** 5/11/1995 60 59,907

Total Investments
(amortized cost $10,043,655) - 96.8 10,888,749
Other assets in excess of liabilities - 3.2% 360,955

TOTAL NET ASSETS - 100.0% $11,249,704

_______________
* Represents local currency.
** Yield at purchase.

</TABLE>
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Bond Fund
Portfolio of Investments
April 30, 1995 (Unaudited)

<TABLE>

<CAPTION>
Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 66.1%
U.S. Treasury Bonds - 19.7%
U.S. Treasury Bond 12.00% 8/15/13 $ 1,760 $ 2,448,600
U.S. Treasury Bond 11.125% 8/15/03 5,000 6,256,250
U.S. Treasury Bond 10.75% 5/15/03 1,000 1,223,750
U.S. Treasury Bond 9.875% 11/15/15 1,000 1,254,375
U.S. Treasury Bond 8.125% 8/15/19 2,900 3,112,063
U.S. Treasury Bond 7.50% 2/15/05 1,600 1,650,000
U.S. Treasury Bond 7.50% 11/15/16 1,300 1,308,529
U.S. Treasury Bond 7.50% 11/15/24 1,500 1,522,500
U.S. Treasury Bond 7.25% 8/15/04 600 607,687
U.S. Treasury Bond 6.25% 8/15/23 3,200 2,766,995
22,150,749

U.S. Treasury Notes - 44.2%
U.S. Treasury Note 9.00% 5/15/98 1,850 1,963,312
U.S. Treasury Note 8.75% 10/15/97 1,000 1,046,250
U.S. Treasury Note 8.50% 2/15/00 1,000 1,066,561
U.S. Treasury Note 7.875% 7/31/96 2,000 2,034,372
U.S. Treasury Note 7.875% 1/15/98 2,500 2,571,875
U.S. Treasury Note 7.875% 8/15/01 1,800 1,886,625
U.S. Treasury Note 7.75% 11/30/99 1,500 1,551,562
U.S. Treasury Note 7.75% 2/15/01 2,000 2,077,500
U.S. Treasury Note 7.50% 12/31/96 8,000 8,117,488
U.S. Treasury Note 7.50% 5/15/02 4,700 4,848,337
U.S. Treasury Note 7.25% 5/15/04 4,600 4,658,931
U.S. Treasury Note 6.875% 3/31/00 5,000 5,000,000
U.S. Treasury Note 6.50% 8/15/97 3,850 3,839,166
U.S. Treasury Note 6.385% 1/15/99 1,500 1,480,312
U.S. Treasury Note 6.25% 2/15/03 3,080 2,938,508
U.S. Treasury Note 5.00% 1/31/99 4,950 4,660,727
49,741,526

U.S. Treasury Strip - 2.2%
U.S. Treasury Strip 7.68%* 2/15/19 15,000 2,491,020

Total U.S. Government Obligations
(cost $73,189,217) 74,383,295

U.S GOVERNMENT AGENCY OBLIGATIONS - 0.1%
Government National Mortgage Association - 0.1%
Government National Mortgage Association
Pool #201299, (cost $82,108) 8.50% 2/15/17 82 83,460

</TABLE>

See Notes to Financial Statements.

<PAGE>

Prairie Funds
International Equity Fund
Portfolio of Investments
April 30, 1995 (Unaudited)
<TABLE>

Principal
Maturity Amount Value
Description Rate Date (000) (Note 2(a))
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS - 26.9%
Automotive Finance - 0.9%
General Motors Acceptance Corp.,
Medium Term Note 6.25% 6/23/95 $ 1,000 $ 999,903

Banking - 5.9%
Interamerican Development Bank 8.50% 3/15/11 1,800 1,922,353
International Bank for Reconstruction
and Development 9.64% 4/30/99 1,500 1,620,135
International Bank for Reconstruction
and Development 7.625% 1/19/23 2,200 2,171,184
Midland Bank PLC 8.625% 12/15/04 900 946,382
6,660,054

Finance - 10.6%
Advanta Mortgage Loan 7.60% 7/25/10 1,625 1,620,790
American Express 8.625% 11/15/22 800 821,288
Aristar, Inc. 5.75% 7/15/98 1,000 956,361
China International Trust &
Investment Corp. 9.00% 10/15/06 900 929,777
First U.S.A Credit Card 5.20% 6/15/23 1,000 986,629
Grand Metro Investment 7.125% 9/15/04 800 772,142
Green Tree Financial Corp. 8.30% 5/15/19 2,500 2,510,938
Sears Credit Account Master Trust II 7.00% 10/15/04 1,600 1,593,500
Standard Master Trust 7.25% 4/07/06 1,800 1,749,382
11,940,807

Industrial - 7.7%
Dayton Hudson Corp. 7.875% 6/15/23 1,800 1,693,633
Marriot International, Inc. 7.875% 4/15/05 1,500 1,501,592
Monsanto Company 8.20% 4/15/25 1,500 1,509,561
Time Warner, Inc. 9.15% 2/01/23 3,200 3,113,763
Weyerhaeuser Co. 8.375% 2/15/07 800 848,555
8,667,104

Telecommunications - 1.2%
GTE North, Inc. 9.60% 1/01/21 1,200 1,329,126

Utilities - Electric - 0.6%
Cincinnati Gas & Electric 7.20% 10/01/23 800 707,007

Total Corporate Obligations
(cost $29,290,865) 30,304,001

SHORT-TERM INVESTMENTS - 5.3%
U.S GOVERNMENT AGENCY OBLIGATIONS - 5.3%
Federal Home Loan Bank, Discount Note 5.86%* 5/08/95 1,100 1,098,747
Federal Home Loan Bank, Discount Note 5.87%* 5/12/95 4,800 4,791,405

Total U.S. Government Agency Obligations
(cost $5,890,152) 5,890,152

</TABLE>
See Notes to Financial Statements.

<PAGE>

Value
(Note 2(a))
Total Investments (cost $108,452,342) - 98.4% $ 110,660,908
Other assets in excess of liabilities - 1.6% 1,826,398

NET ASSETS - 100.0% $ 112,487,306
_________________
* Discount yield.

See Notes to Financial Statements.

<PAGE>

Prairie Funds
International Equity Fund
Portfolio of Investments
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>

Value
Description Shares (Note 2(a))
<S> <C> <C>
COMMON STOCK - 84.2%
Australia- 2.5%
Amcor Limited 12,700 $ 93,349
Broken Hill Proprietary Co. 24,000 349,325
Coles Myer Limited 25,600 85,140
CRA Limited 10,200 146,533
Lend Lease Corp. 6,000 76,676
National Australia Bank 21,500 186,197
News Corporation, Limited
Voting Shares 14,200 62,729
News Corporation Limited 23,800 115,701
Pacific Dunlop Limited 28,800 70,842
Santos Limited 21,000 57,769
Southcorp Holdings 23,400 51,768
Western Mining Corp. 20,600 116,635
Westpac Banking Corp. 33,000 122,001
1,534,665

France - 5.3%
Alcatel Alsthom 1,600 148,660
Banque Nationale De Paris 4,500 219,139
Carnaudmetalbox 3,300 117,265
Compagnie Bancaire 1,100 121,703
Compagnie De Suez 2,400 125,138
Compagnie De St. Gobain 2,300 298,053
Compagnie Union De Assurance 3,600 97,998
Credit Local De France 2,000 170,747
Eaux-Cie Generale 2,700 284,972
LVMH Moet Hennessy 1,600 304,818
Michelin, Class B 2,300 103,334
Peugeot SA 1,300 187,801
Sanofi 3,000 165,653
Societe Generale 2,500 275,070
Societe National Elf Aquitane 3,300 264,049
Total, Class B 4,800 300,449
3,184,849

Germany - 4.0%
Allianz AG Holding 100 183,618
BASF AG 600 134,089
Bayer AG 600 148,240
Bayer Motoren Werke AG 300 154,534
Bayer Vereinsbank 300 718
Bayerische Vereinsbank 300 84,864

</TABLE>

See Notes to Financial Statements.

<CAPTION>
Value
Description Shares (Note 2(a))

<S> <C> <C>
Germany (continued)
Commerzbank AG 500 $ 121,001
Deutsche Bank AG 800 393,282
Hoechst AG 600 128,272
Kaufhof Holding AG 300 107,545
Mannesmann AG 400 109,245
Munchener Ruckvers 100 200,765
Preussag AG 800 232,959
Schering AG 100 74,446
Siemens AG 200 97,611
Veba AG 700 261,573
2,432,762

Hong Kong - 2.9%
Bank of East Asia 6,000 16,320
Cathay Pacific Airway 23,000 32,246
Cheung Kong Holdings 18,000 75,825
China Light and Power
Co., Limited 60,000 282,990
Chinese Estates Holdings 12,000 8,528
Dickson Concepts International
Limited 5,000 2,584
Giordano Holdings 4,000 2,636
Hang Lung Development Co. 10,000 14,731
Hang Seng Bank Limited 21,800 143,664
Hong Kong Aircraft 1,200 3,070
Hong Kong Telecom 106,400 208,289
Hopewell Holdings 35,000 24,874
Hutchison Whampoa 68,000 295,236
Hysan Development Limited 8,000 17,057
Johnson Electric Holdings 3,000 6,532
Kumagai Gumi 3,000 2,229
Lai Sun Garment International 2,000 2,054
Miramar Hotel 4,000 7,805
New World Development Co. 13,000 33,765
Oriental Press Group 12,000 4,884
Peregrine Investment Holdings 4,000 4,212
Playmate Toys Holdings 4,000 1,176
Regal Hotel Holdings 22,000 4,121
Shangri-La Asia 8,000 8,631
Shun Tak Holdings Limited 12,000 7,288
South China Morning Post 12,000 7,133
Sun Hung Kai Properties 25,000 159,585
Swire Pacific Limited 32,000 213,987
Television Broadcasts Limited 3,000 11,164
Wharf Holdings Limited 39,000 116,914
Wing Lung Bank 1,200 6,358
Winsor Industrial Corp. Limited 2,000 2,455
1,728,343

See Notes to Financial Statements.

</TABLE>

Value
Description Shares (Note 2(a))
<S> <C> <C>
Japan - 51.1%
Ajinomoto Co.,Inc. 6,000$ 72,128
Amada Co. 28,000 299,270
Asahi Bank Limited 28,000 359,923
Asahi Breweries 2,000 24,757
Asahi Chemical Industries 27,000 209,525
Asahi Glass Co. 33,000 432,052
Ashikaga Bank 3,000 22,852
Bank of Tokyo 24,000 434,194
Bank of Yokohama 11,000 102,121
Bridgestone Corp. 8,000 129,497
Canon, Inc. 24,000 397,058
Casio Computer Co. 1,000 10,843
Chiba Bank 6,000 60,701
Chichibu Onoda Cement 2,000 11,664
Citizen Watch Co. Limited 19,000 136,363
Cosmo Oil Company 3,000 21,709
Dai Nippon Ink and Chemical 3,000 14,997
Dai Nippon Printing 26,000 436,337
Daicel Chemical Industries 13,000 76,127
Daiei, Inc. 6,000 74,270
Dai-Ichi Kangyo Bank 39,000 798,404
Daiichi Pharmaceuticals Co. 1,000 16,187
Daiken Industries 27,000 231,379
Daiwa Bank 20,000 199,482
Daiwa House Industries 14,000 233,285
Daiwa Securities 15,000 189,246
Ebara Corporation 2,000 31,660
Eisai Co. 1,000 17,853
Fanuc Co. 7,000 316,601
Fuji Bank 36,000 865,534
Fuji Photo Film Limited 5,000 122,594
Fujita Corporation 1,000 5,713
Fujitsu Limited 46,440 474,803
Furukawa Electric 3,000 18,389
Gunma Bank 4,000 48,085
Hankyu Corp. 5,000 30,232
Hitachi Limited 81,000 824,288
Hokuriku Bank 4,000 30,470
Honda Motor Co. 19,000 307,555
Inax Corporation 26,000 278,203
Industrial Bank of Japan 30,000 917,667
lsetan Company 1,000 16,068
Ito Yokado Company 13,000 700,926
ltochu Corporation 13,000 88,196
Japan Air Lines Co. 18,000 128,543
Japan Energy Corp. 5,000 19,877
Joyo Energy 6,000 53,203
Jusco Co. 2,000 40,944

See Notes to Financial Statements.

</TABLE>

Value
Description Shares (Note 2(a))
<S> <C> <C>
Japan (continued)
Kajima Corporation 9,000$ 89,981
Kansai Electric Power 11,000 301,127
Kao Corporation 5,000 60,701
Kawasaki Steel Corporation 34,000 137,588
Keihin Electric 1,000 6,808
Keio Teito Electric Railway 16,000 102,835
Kinden Corporation 1,100 21,864
Kinki Nippon Railway 31,000 286,319
Kirin Brewery Co. 11,000 130,662
Kobe Steel 25,000 74,982
Komatsu Limited 9,000 71,556
Kubota Corp. 13,000 94,075
Kumagai Gumi Co. 2,000 11,140
Kuraray Co. Limited 8,000 95,122
Kyocera Corp. 2,000 154,730
Kyowa Hakko Kogyo 3,000 32,136
Maeda Road Construction 6,000 123,545
Marubeni Corporation 13,000 71,639
Marui Co. 3,000 46,062
Matsushita Electric Industries 40,000 671,288
Mitsubishi Bank 12,000 294,224
Mitsubishi Chemical Corp. 22,000 129,092
Mitsubishi Corp. 18,000 227,095
Mitsubishi Electric Corp. 23,000 163,155
Mitsubishi Estate 14,000 168,298
Mitsubishi Heavy Industries
Limited 39,000 283,156
Mitsubishi Materials 8,000 39,991
Mitsubishi Oil Co. 2,000 21,567
Mitsubishi Paper Mills 34,000 245,636
Mitsubishi Trust and Banking 15,000 258,874
Mitsui and Co. 16,000 137,114
Mitsui Engine and Shipbuilding 1,000 2,892
Mitsui Fire and Marine 5,000 37,909
Mitsui Fudosan Co. 11,000 128,044
Mitsui O.S.K. Lines 5,000 18,091
Mitsui Toatsu Chemical 1,000 4,273
Mitsui Trust and Banking Co. 12,000 134,543
Mitsukoshi Limited 3,000 27,601
Murata Manufacturing Co. 2,000 80,459
Nagoya Railroad Co. 4,000 22,614
Nankai Electric Railway 2,000 15,449
NEC Corp. 17,000 188,175
New Oji Paper 6,000 67,129
NGK Insulators 44,000 439,384
Nichido Fire and Marine 1,000 8,308
Nichii Co. Limited 22,000 251,376
Nintendo Co. 2,600 166,798
Nippon Denso 19,000 382,181
Nippon Express Co. 10,000 98,908

See Notes to Financial Statements.

</TABLE>

Value
Description Shares (Note 2(a))
<S> <C> <C>
Japan (continued)
Nippon Fire and Marine 2,000 $ 13,092
Nippon Light Metal 1,000 5,832
Nippon Meat Packers 16,000 230,427
Nippon Oil Co. 11,000 74,627
Nippon Paper Industries 7,000 54,405
Nippon Seiko Kab Kai 2,000 14,592
Nippon Steel Corp. 81,000 321,999
Nippon Yusen Kab Kai 10,000 64,510
Nissan Motor Co. 28,000 204,624
NKK Corp. 34,000 95,098
Nomura Securities 24,000 485,614
NTN Corp. 1,000 6,618
Obayashi Corp. 6,000 50,275
Odakyu Electric Railway 5,000 41,836
Omron Corp. 1,000 19,639
Orix Corporation 3,000 98,194
Osaka Gas Co. 117,000 480,425
Pioneer Electric 8,000 168,536
Ricoh Co. 5,000 46,716
Rohm Co. 1,000 46,300
Sakura Bank 41,000 546,550
Sankyo Company 19,800 476,043
Sanyo Electric Co. 19,000 107,190
Sapporo Breweries 1,000 9,807
Secom Co. 7,000 456,571
Sega Enterprises 1,000 45,943
Seino Transportation 10,000 190,436
Sekisui Chemical 4,000 49,990
Sekisui House 54,000 713,421
Seven-Eleven Japan NPV 4,000 288,035
Sharp Corp. 12,000 197,101
Shimizu Corporation 7,000 75,151
Shin-Etsu Chemical Co. 2,000 38,801
Shinmaywa Industries 16,000 148,730
Shionogi and Co. 1,000 9,927
Shiseido Co. 2,000 24,281
Shizuoka Bank 8,000 110,453
Showa Denko KK 3,000 10,962
Sony Corp. 5,200 262,422
Sumitomo Bank 39,000 844,822
Sumitomo Chemical 14,000 79,316
Sumitomo Corp. 10,000 99,384
Sumitomo Electric Industries 22,000 298,509
Sumitomo Marine and Fire 5,000 42,074
Sumitomo Metal Industries 30,000 98,550
Sumitomo Metal Mining 3,000 26,852
Sumitomo Osaka Cement 1,000 4,678
Taisei Corp. 8,000 55,322
Taisho Pharmaceutical Co. 3,000 56,060

See Notes to Financial Statements.

<PAGE>
Value
Description Shares (Note 2(a))
Japan (continued)
Takeda Chemical Industries 32,000 $ 426,576
TDK Corp. 8,000 365,639
Teijin 6,000 33,850
Tobu Railway Co. 6,000 39,563
Tohoku Electric Power 5,000 143,423
Tokai Bank 24,000 308,506
Tokio Marine and Fire 25,000 297,555
Tokyo Electric Power 17,600 563,501
Tokyo Electronics 1,000 31,184
Tokyo Gas Co. 28,000 127,971
Tokyo Steel Manufacturing
Co. Limited 20,000 418,960
Tokyu Corp. 9,000 63,522
Tonen Corp. 20,000 368,970
Toppan Printing Co. 6,000 87,125
Toray Industries, Inc. 90,000 628,794
Toshiba Corp. 88,000 585,491
Tosoh Corp. 1,000 5,320
Tostem Corp. 2,000 72,604
Toto 2,000 33,327
Toyo Seikan Kaisha 2,000 69,033
Toyoda Automatic Loom
Works Limited 2,000 36,659
Toyota Motor Corp. 47,000 956,586
UBE Industries 2,000 8,236
Yamaguchi Bank 1,000 18,568
Yamaichi Securities Co. 11,000 76,067
Yamanouchi Pharmaceutical 3,000 67,486
Yamato Transport 1,100 12,608
Yamazaki Baking Co. 1,000 18,925
Yasuda Trust and Banking 10,000 80,935
Yokogawa Bridge Works Corp. 7,000 89,148
77 Bank 2,000 22,614
30,907,757

Singapore - 3.6%
Amcol Holdings 9,000 18,730
Chaun Hup Holdings 7,000 5,727
City Developments 24,000 141,230
Cycle and Carriage 7,000 57,267
DBS Land Limited 25,000 68,893
Development Bank Singapore 21,000 224,547
First Capital Corp. - Singapore 7,000 18,586
Fraser and Neave Limited 7,000 76,859
Hai Sun Hup Group Limited 7,000 6,329
Haw Par Brothers International 6,000 12,099
Hotel Properties Limited 12,000 22,390
Inchcape Berhad 5,000 16,505
Jurong Shipyard Limited 3,000 23,036
Keppel Corp. 15,000 121,638
Low Keng Huat Limited 4,000 1,880

See Notes to Financial Statements.

<PAGE>

Value
Description Shares (Note 2(a))
Singapore (continued)
Lum Chang Holdings Limited 10,000 $ 8,181
Metro Holdings 3,000 13,348
Natsteel Limited 10,000 20,667
Neptune Orient Lines 21,000 24,112
Oversea Chinese Banking Corp. 27,000 294,516
Overseas Union Enterprises 4,000 23,251
Parkway Holdings Limited 9,000 20,021
Prima 1,000 3,660
Robinson and Company 2,000 8,324
Shangri-La Hotel 5,000 18,479
Sia Limited Foreign 40,000 384,652
Singapore Press Holdings 9,000 155,009
Straits Steamship 16,000 53,277
Straits Trading Co. 9,000 20,926
United Industrial Corp. 42,000 39,182
United Overseas Bank 23,000 239,331
United Overseas Land 15,000 28,848
2,171,500

United Kingdom - 14.8%
ASDA Group 70,600 92,592
Bass 27,900 246,496
Bat Industries 33,500 252,845
Bet Pub Limited 48,400 92,299
British Gas 116,800 566,714
British Petroleum 61,800 445,059
British Telecom 131,700 823,401
Charter PLC 13,600 174,216
Coats Viyella 59,500 194,375
FKI PLC 25,500 65,247
General Electric 108,900 534,514
Glaxo PLC 32,500 384,160
Grand Metropolitan 39,300 252,664
Guinness 43,200 326,402
Hanson 47,700 181,351
HSBC Holdings 11,600 136,742
Lasmo PLC 74,200 200,607
Legal and General 17,900 135,965
Lloyds Abbey Life PLC 25,400 152,057
Lloyds Bank PLC 66,600 685,407
London Electricity PLC 13,900 142,939
Lucas Industries PLC 28,300 87,441
Mirror Group News PLC 33,800 73,160
National Power 11,100 81,099
National Westminster Bank 40,200 349,668
Ocean Group PLC 45,800 221,850
Reckitt and Coleman 22,600 233,132
Rolls Royce 39,300 108,150

See Notes to Financial Statements.

<PAGE>
Value
Description Shares (Note 2(a))

Royal Insurance PLC 24,200 $ 118,001
RTZ Corp. 6,600 83,908
Sears PLC 88,800 149,335
Sedgwick Group 24,700 62,407
Smithkline Beecham 50,400 384,048
Tesco PLC 77,700 349,487
Thames Water PLC 22,800 178,321
Unilever PLC 8,100 159,943
Whitbread and Co. 22,400 204,033
8,930,035

Total Common Stock
(cost $47,207,769) 50,889,911

</TABLE>
<TABLE>

Principal
Maturity Amount
Rate* Date (000)

<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS - 8.9%
U.S. Treasury Bills - 8.9%
U.S. Treasury Bill 5.79% 5/11/1995 $ 500,000 499,211
U.S. Treasury Bill 5.87% 6/29/1995 1,600,000 1,585,341
U.S. Treasury Bill 6.39% 3/07/1996 3,500,000 3,323,418

Total Short-Term Investments
(cost $5,404,333) 5,407,970

Total Investments (cost $52,612,102) - 93.1% $56,297,881

</TABLE>

Delivery Number of
Year/Month Contracts
FINANCIAL FUTURES - 0.1%**
Long Positions - 0.05%
France - 0.02%
CAC 40 1995/May 6 $14,257

Germany - 0.03%
DAX 1995/June 6 16,244

Japan - 0.00%
TOPIX 1995/June 53 490

United Kingdom - 0.00%
FTSE-100 1995/June 7 1,353

Total Long Positions 32,344

Short Positions - 0.05%
Japan - 0.13%
Japanese Yen 1995/June 19 75,800

See Notes to Financial Statements.

<PAGE>

Delivery Number of Value
Year/Month Contracts (Note 2(a))

<S> <C> <C> <C>
United Kingdom - (0.08%)
FTSE-100 1995/June 18 $ (45,789)

Total Short Position 30,011
Total Variation Margin on Financial Futures - 0.1% 62,355

Total Investments (cost $52,612,101) - 93.1% 56,297,881
Total Variation Margin on Financial Futures - 0.1% 62,355
Other assets in excess of liabilities - 6.8% 4,140,053

NET ASSETS - 100.0% $60,500,289

[/R]
</TABLE>

* Discount yield.
** Value represents variation margin on open futures contracts
at April 30, 1995. The market value of the futures
contracts
is $5,566,966 and the unrealized appreciation of these
contracts is $62,355.

See Notes to Financial Statements.

<PAGE>

Prairie Funds
Managed Assets Fund
Portfolio of Investments
April 30,1995 (Unaudited)

Value
Description Shares (Note 2(a))
COMMON STOCKS - 43.4%
Aluminum - 1.1%
Aluminum Company of America 200 $ 8,975

Automobiles - 1.0%
Ford Motor Company 300 8,100

Banking - 3.0%
BankAmerica Corp. 300 14,850
Nationsbank Corp. 200 10,000
24,850

Beverage, Food and Tobacco - 4.4%
Anheuser-Bush Companies, Inc. 200 11,625
Coca-Cola Co. 200 11,625
Philip Morris Companies, Inc. 200 13,550
36,800

Business and Data Processing Equipment - 1.1%
International Business Machines 100 9,475

Chemicals - 2.5%
E.I. Du Pont de Nemours & Co. 200 13,175
Monsanto Company 100 8,325
21,500

Conglomerates - 5.9%
Allied Signal, Inc. 300 11,888
General Electric Company 300 16,800
ITT Corporation 200 20,900
49,588

Consumer Goods - 1.0%
Service Corp. International 300 8,475

Drugs - 3.1%
Bristol Myers Squibb Co. 200 13,025
Merck & Co., Inc. 300 12,863
25,888

Electrical Equipment - 1.6%
Emerson Electric Company 200 13,450

Electronic Equipment - 2.0%
Motorola, Inc. 300 17,063

___________
See Notes to Financial Statements.

<PAGE>

Value
Description Shares (Note 2(a))

<S> <C> <C>
Finance Companies - 0.8%
Federal Home Loan Mortgage Corporation 100 $ 6,525

Leisure and Entertainment - 1.3%
Walt Disney Co. 200 11,075

Oil - Domestic - 1.7%
Cheveron Cop. 300 14,212

Oil - International - 1.5%
Royal Dutch Pete Co. 100 12,400

Pollution Control - 1.0%
WMX Technologies, Inc. 300 8,175

Railroads - 0.9%
CSX Corp. 100 7,963

Restaurants - 1.7%
McDonalds Corp. 400 14,000

Retail - 2.7%
May Department Stores 300 10,875
Wal Mart Stores, Inc. 500 11,875
22,750

Telephone - 5.1%
AT&T Corp. 300 15,225
GTE Corp. 300 10,237
Nynex Corp. 200 8,175
300 9,262
42,899

Total Common Stocks (cost $359,589) 364,163

</TABLE>

Principal
Maturity Amount
Rate Date (000)

<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 36.8%
U.S. Treasury Note - 36.8%
U.S. Treasury Note (cost $308,259) 7.50% 11/15/01 $300 308,813

SHORT-TERM INVESTMENTS - 9.5%
U.S. Treasury Bill - 9.5%
U.S. Treasury Bill (cost $79,788) 5.62%* 5/18/95 80 79,788

Total Investments (cost $747,636) - 89.7% 752,764
Other assets in excess of liabilities - 10.3% 86,619

NET ASSETS - 100.0% $ 839,383

</TABLE>
_________________
* Discount yield.
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Statement of Operations
For the period ended April 30, 1995 (Unaudited)

Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund (1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)

<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income $ 2,029,071 $ 1,166,545 $ 58,411 $ - $ - $ 241,647 $ 93
Interest Income 625,154 586,289 155,244 174,605 1,718,675 32,103 1,275
2,654,225 1,752,834 213,655 174,605 1,718,675 273,750 1,368

Expenses:
Advisory fees 260,364 435,187 108,704 17,967 124,091 67,672 330
Administration fees 78,110 100,428 23,294 3,851 33,843 12,689 76
Shareholder servicing fees
(Class A Shares and Class B Shares) 7 98 38 27 52 68 118
12B-1 fees (Class B Shares) 7 7 7 8 6 4 237
Custodian fees and expenses 18,018 17,381 15,015 17,447 14,399 13,496 4,312
Registration fees 15,546 13,178 4,351 984 8,418 - -
Legal fees 11,011 13,832 3,367 910 4,158 2,464 2,296
Audit fees 8,190 8,190 8,190 8,190 6,314 4,592 2,324
Amortization of organization expenses 5,468 5,484 5,484 5,466 4,670 3,001 821
Transfer agent fees and expenses 5,278 5,278 5,278 5,278 4,466 3,248 1,624
Reports to shareholders 4,914 4,914 4,860 4,914 3,773 2,744 1,820
Trustees' fees 455 455 455 455 385 280 140
Miscellaneous expenses 3,217 3,435 2,742 2,494 2,464 6,779 756
410,585 607,867 181,785 67,991 207,039 117,037 14,854
Less: Fee waivers and expense
reimbursements (72,101) (72,150) (49,743) (46,329) (49,048) (27,484) (14,094)
338,484 535,717 132,042 21,662 157,991 89,553 760
NET INVESTMENT INCOME 2,315,741 1,217,117 81,613 152,943 1,560,684 184,197 608

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments 400,516 1,879,985 83,107 308,447 591,602 (5,579) -
Net realized gain on foreign
currency transactions - - - 13,691 - (24,383) -
Net change in unrealized appreciation on:
Investments 11,555,452 16,137,492 2,520,625 845,094 2,208,566 3,685,780 5,128
Translation of assets and
liabilities denominated in
foreign currencies - - - 47,307 - 53,721 -
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS 11,955,968 18,017,477 2,603,732 1,214,539 2,800,168 3,709,539 5,128

NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 14,271,709 $ 19,234,594 $ 2,685,345 $ 1,367,482 $4,360,852$ 3,893,736 $ 5,736

________________________
(1) For the period January 27, 1995 (commencement of operations)
through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations)
through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations)
through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations)
through April 30, 1995.

</TABLE>
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Statement of Assets and Liabilities
For the period ended April 30, 1995 (Unaudited)

Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund Fund Fund Fund Fund Fund Fund

<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in securities, at value
(cost $205,606,387, $271,922,016,
$62,908,945, $10,043,655,
$108,452,342, $52,612,101 and
$747,636, respectively) $217,161,839 $288,059,508 $ 65,429,570 $ 10,888,749 $110,660,908 $ 56,297,881 $ 752,764
Cash 99 - 345,246 52,141 790,484 3,658,993 101,458
Cash denominated in foreign
currencies, at value (cost $0,
$0, $0, $0, $256,245 and $0,
respectively) - - - - - 267,929 -
Receivable for investment
securities sold 27,384,000 39,614,410 9,706,906 1,452,449 11,913,263 - -
Receivable for Fund shares sold 42,000 171,291 14,793 9,000 164,500 24,257 4,000
Receivable from adviser - - - 25,982 - - 13,716
Dividends receivable 548,417 304,435 6,642 - - 278,391 93
Interest receivable 265,330 25,995 6,508 361,643 1,944,060 17,393 10,380
Foreign tax receivable - - - 13,590 - 10,162 -
Receivable for variation margin - - - - - 62,355 -
Prepaid expenses 144,135 144,256 143,788 143,686 146,326 146,745 144,637
Total Assets 245,545,820 328,319,895 75,653,453 12,947,240 125,619,541 60,764,106 1,027,048

LIABILITIES:
Advisory fees payable 64,602 142,636 21,348 - 33,323 23,173 -
Administration fees payable 31,025 39,789 8,426 522 14,936 7,202 29
Shareholder servicing fees payable
(Class A Shares and Class B Shares) 7 98 38 27 52 68 117
12b-1 fees payable (Class B Shares) 7 7 9 8 6 4 237
Bank overdraft - 108,901 - - -
Dividends payable - - - 49,128 582,863 - -
Payable for Fund shares redeemed - 65,600 - 37,000 22,622 69,000 -
Payable for investment securities
purchased 27,430,000 43,934,492 10,979,502 1,454,345 12,334,613 - 71,093
Payable for organizational expenses 102,917 102,917 102,917 102,917 102,917 102,917 102,917
Accrued legal fees 9,485 11,882 2,908 838 3,388 2,464 2,296
Accrued Trustees' fees 455 455 455 455 385 280 140
Other accrued expenses 38,726 42,560 36,113 52,296 37,130 58,709 10,836
Total Liabilities 27,677,224 44,449,337 11,151,716 1,697,536 13,132,235 263,817 187,665

NET ASSETS $217,868,596 $283,870,558 $ 64,501,737 $ 11,249,704 $112,487,306 $60,500,289$ 893,383

</TABLE>
______________________
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Statement of Assets and Liabilities (continued)
April 30, 1995 (Unaudited)

<TABLE>
<CAPTION>
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund Fund Fund Fund Fund Fund Fund

<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Offering Price and
Redemption Price per Share:
Class A Shares:
Net Assets $ 15,473 $ 468,351 $ 171,055 $ 206,526 $ 470,113 $ 600,373 $ 296,664
Shares of beneficial interest
issued and outstanding,
$0.001 par value, unlimited
number of shares authorized 1,457 43,674 16,341 18,340 45,754 56,281 29,451
Net Asset Value per Share $ 10.62 $ 10.72 $ 10.47 $ 11.26 $ 10.27 $ 10.67 $ 10.07
Sales charge - 4.50% of maximum
offering price 0.50 0.51 0.49 0.53 0.48 0.50 0.47
Maximum offering price $ 11.12 $ 11.23 $ 10.96 $ 11.79 $ 10.75 $ 11.17 $ 10.54

Class B Shares:
Net Assets $ 3,957 $ 3,976 $ 5,865 $ 4,207 $ 3,835 $ 3,954 $ 438,248
Shares of beneficial interest
issued and outstanding, $0.001
par value, unlimited number
of shares authorized 373 371 561 374 373 371 43,539
Net Asset Value per Share $ 10.61 $ 10.72 $ 10.45 $ 11.26 $ 10.27 $ 10.66 $ 10.07

Class I Shares:
Net Shares $217,849,166 $283,398,231 $ 64,324,817 $ 11,038,971 $112,013,358 $ 59,895,962 $ 104,471
Shares of beneficial interest
issued and outstanding, $0.001
par value, unlimited number of
shares authorized 20,515,744 26,426,477 6,149,007 980,338 10,903,932 5,613,695 10,370
Net Asset Value per Share $ 10.62 $ 10.72 $ 10.46 $ 11.26 $ 10.27 $ 10.67 $ 10.07

COMPOSITION OF NET ASSETS:
Shares of beneficial interest,
at par $ 20,518 $ 26,471 $ 6,166 $ 999 $ 10,950 $ 5,670 $ 83
Additional paid-in capital 205,319,938 265,417,126 61,871,994 10,034,166 109,676,188 56,709,508 833,564
Accumulated net realized gains
(losses) 400,516 1,879,985 83,107 308,447 591,602 (5,579) -
Accumulated net realized gains
(losses) on foreign currency - - - 13,691 - (24,383) -
Undistributed net investment
income 572,172 309,484 19,845 - - 75,572 608
Net unrealized appreciation of
investments 11,555,452 16,137,492 2,520,625 845,094 2,208,566 3,685,780 5,128
Net unrealized appreciation of
investments on translation of
assets and liabilities
denominated in foreign currency - - - 47,307 - 53,721 -
NET ASSETS, April 30, 1995 $217,868,596 $283,770,558 $64,501,737 $11,249,704 $112,487,306 $ 60,500,289 $ 839,383

</TABLE>
______________________
See Notes to Financial Statements.

<PAGE>

Prairie Funds
Statement of Charges in Net Assets
For the period ended April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>

Equity Special International International Managed

Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund (1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)

<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income $ 2,315,741$ 1,217,117 $ 81,613 $ 152,943 $ 1,560,684 $ 184,197 $608
Net realized gain (loss) on
investments 400,516 1,879,985 83,107 308,447 591,602 (5,579) -
Net realized gain (loss) on
foreign currency transactions - - - 13,691 - (24,383) -
Net change in unrealized appreciation on:
Investments 11,555,452 16,137,492 2,520,625 845,094 2,208,566 2,685,780 5,128
Translation of assets and
liabilities denominated
in foreign currencies - - - 47,307 - 53,721 -
Net Increase In Net Assets
Resulting From Operations 14,271,709 19,234,594 2,685,345 1,367,482 4,360,852 3,893,736 5,736

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME:
Class A shares (30) (922) (54) (528) (1,306) (170) -
Class B shares (26) (6) - (48) (47) (4) -
Class I shares (1,743,513) (906,705) (61,714) (152,367) (1,559,331) (108,451) -

Total Dividends to Shareholders
from Net Investment Income (1,743,569) (907,633) (61,768) (152,943) (1,560,684) (108,625) -

CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares 11,418 468,001 173,106 201,064 466,159 584,564 290,837
Class B shares - - 2,052 - - - 431,700
Class I shares 211,460,525 274,042,712 64,435,036 10,079,248 111,832,159 57,085,816 100,000
Dividends reinvested:
Class A shares 30 930 57 60 88 169 -
Class B shares 26 6 - 34 30 4 -
Class I shares 15,498 10,978 640 741 6,312 931 -
Cost of shares redeemed:
Class A shares - (5,000) (5,100) - - - -
Class B shares - - (52) - - - -
Class I shares (6,158,152) (8,985,141) (2,738,690) (257,093) (2,628,721) (967,417) -

Net Increase in Net Assets
From Capital Stock
Transactions 205,329,345 265,532,486 61,867,049 10,024,054 109,676,027 56,704,067 822,537
217,857,485 283,859,447 64,490,626 11,238,593 112,476,195 60,489,178 828,273
</TABLE>

<TABLE>
<CAPTION>
Prairie Funds
Statement of Charges in Net Assets (continued)
For the period ended April 30, 1995 (Unaudited)

Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund (1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)

<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets:
Beginning of period 11,111 11,111 11,111 11,111 11,111 11,111 11,110
End of period
(including undistributed
net investment income of $572,172,
$309,484, $19,845, $0, $0,
$75,572 and $608,
respectively) $217,868,596 $283,870,558 $ 64,501,737 $ 11,249,704 $112,487,306$ 60,500,289$ 839,383
_______________
(1) For the period January 27, 1995 (commencement of operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations) through April 30,1995.
(3) For the period March 3, 1995 (commencement of operations) through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations) through April 30, 1995.
</TABLE>

See Notes to Financial Statements.

<TABLE>
<CAPTION>
Prairie Funds
Statement of Charges in Net Assets
For the period ended April 30, 1995 (Unaudited)

Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund (1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A:
Shares sold 1,084 43,688 16,459 17,964 45,375 55,894 29,081
Shares issued in reinvestment
of dividends 3 87 5 6 9 17 -
Shares redeemed (471) (493) - - - -
1,087 43,304 15,971 17,970 45,384 55,911 29,081

Class B:
Shares sold - - 196 - - - 43,169
Shares issued in reinvestment
of dividends 3 1 - 4 3 1 -
Shares redeemed - - (5) - - - -
Net Increase In Class B
Shares Outstanding 3 1 191 4 3 1 43,169

Class I:
Shares sold 21,112,383 27,287,083 6,413,551 1,003,836 11,162,106 5,709,060 10,000
Shares issued in reinvestment
of dividends 1,509 1,032 61 69 620 93 -
Shares redeemed (598,518) (862,008) (264,975) (23,937) (259,164) (95,828) -
Net Increase In Class I
Shares Outstanding 20,515,374 26,426,107 6,148,637 979,968 10,903,562 5,613,325 10,000

Total Increase in Fund
Shares Outstanding 20,516,464 26,469,412 6,164,799 997,942 10,948,949 5,669,237 82,250

_____________________
(1) For the period January 27, 1995 (commencement of operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations) through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations) through April 30, 1995.

</TABLE>

See Notes to Financial Statements.

Prairie Funds
Financial Highlights (Unaudited)

<TABLE>
<CAPTION>
Contained below is per share operating performance data for a share of beneficial interest outstanding, total investment
return,
ratios to average net assets and other supplemental data for each period indicated. This information has been derived from
information provided in the Funds' financial statements.

For the period ended April 30, 1995
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)

<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class A Shares:
Net asset value per
share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment
Operations:
Net investment income 0.10 0.02 - 0.15 0.14 0.02 0.01

Net realized and unrealized
gain on investment 0.60 0.73 0.48 1.26(8) 0.27 0.67 (8) 0.06
Total Income from
Investment Operations 0.70 0.75 0.48 1.41 0.41 0.69 0.07
Dividends:
Dividends from net
investment income (0.08) (0.03) (0.01) (0.15) (0.14) (0.02) -
Net change in net asset
value per share 0.62 0.72 0.47 1.26 0.27 0.67 0.07
Net asset value per share,
end of period $ 10.62 $10.72 $ 10.47 $ 11.26 $ 10.27 $ 10.67 $ 10.07

TOTAL INVESTMENT RETURN (5) 7.05% 7.53% 4.75% 14.18% 4.15% 6.89% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets (6) 0.87% 1.04% 1.09% 1.18% 0.95% 1.30% 1.05%
Ratio of net investment
income to average net assets (6) 3.95% 1.00% 0.02% 5.47% 6.58% 0.91% 2.18%
Decrease reflected in above
expense ratios due to
fee waivers and
expense reimbursements (6) 0.17% 0.10% 0.32% 1.71% 0.21% 0.31% 23.59%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of year
(000's Omitted) $ 15 $ 468 $ 171 $ 207 $ 470 $ 600 $ 297

______________________________________
(1) For the period January 27, 1995 (commencement of operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations) through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations) through April 30, 1995.
(5) The total return figures provided are not annualized and do not include the effect of any sales charge.
(6) Annualized.
(7) Not annualized.
(8) Includes net realized and unrealized gain on foreign currency transactions.
</TABLE>

See Notes to Financial Statements.

<TABLE>
<CAPTION>
Prairie Funds
Financial Highlights (Unaudited)

Contained below is per share operating performance data for a share of beneficial interest outstanding, total investment
return,
ratios to average net assets and other supplemental data for each period indicated. This information has been derived from
information provided in the Funds' financial statements.

For the period ended April 30, 1995
Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class I Shares:
Net asset value per
share, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income 0.11 0.05 0.01 0.16 0.15 0.03 0.01
Net realized and unrealized
gain on investment 0.60 0.71 0.46 1.26(8) 0.27 0.66 (8) 0.06
Total Income from
Investment Operations 0.71 0.76 0.47 1.42 0.42 0.69 0.07
Dividends:
Dividends from net
investment income (0.09) (0.04) (0.01) (0.16) (0.15) (0.02) -
Net change in net
asset value per share 0.62 0.72 0.46 1.26 0.27 0.67 0.07
Net asset value per share,
end of period $10.62 $10.72 $10.46 $ 11.26 $10.27 $10.67 $ 10.07

TOTAL INVESTMENT RETURN (5) 7.09% 7.55% 4.70% 14.25% 4.20% 6.91% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses
to average net assets (6) 0.65% 0.80% 0.85% 0.84% 0.70% 1.06% 0.80%
Ratio of net investment
income to average net assets (6) 4.44% 1.82% 0.53% 5.94% 6.92% 2.18% 2.60%
Decrease reflected in
above expense ratios due to
fee waivers and
expense reimbursements (6) 0.14% 0.11% 0.32 1.80% 0.22% 0.32% 23.15%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of
year (000's Omitted) $ 217,849 $283,398 $ 64,325 $ 11,039 $ 112,013$ 59,896$ 104

______________________________________
(1) For the period January 27, 1995 (commencement of operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations) through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations) through April 30, 1995.
(5) The total return figures provided are not annualized and do not include the effect of any sales charge.
(6) Annualized.
(7) Not annualized.
(8) Includes net realized and unrealized gain on foreign currency transactions.

</TABLE>

See Notes to Financial Statements.

Prairie Funds
Financial Highlights (Unaudited)

Contained below is per share operating performance data for a share of beneficial interest outstanding, total investment
return,
ratios to average net assets and other supplemental data for each period indicated. This information has been derived from
information provided in the Funds' financial statements.

For the period ended April 30, 1995

Equity Special International International Managed
Income Growth Opportunities Bond Bond Equity Assets
Fund(1) Fund(1) Fund(1) Fund(1) Fund(2) Fund(3) Fund(4)
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Class B Shares:
Net asset value per share,
beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income 0.09 0.02 (0.01) 0.13 0.13 0.02 -
Net realized and unrealized
gain on investment 0.59 0.72 0.46 1.26(8) 0.27 0.65 (8) 0.07
Total Income from
Investment Operations 0.68 0.74 0.45 1.39 0.40 0.67 0.07
Dividends:
Dividends from net
investment income (0.07) (0.02) - (0.13) (0.13) (0.01) -
Net change in net asset
value per share 0.61 0.72 0.45 1.26 0.27 0.66 0.07
Net asset value per share,
end of period $ 10.61 $ 10.72 $ 10.45 $ 11.26 $ 10.27$ 10.66$ 10.07

TOTAL INVESTMENT RETURN (5) 6.81% 7.38% 4.50% 13.97% 3.99% 6.73% 0.70%

RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets (6) 1.60% 1.76% 1.80% 1.78% 1.72% 2.05% 1.80%
Ratio of net investment income
to average net assets (6) 3.49% 0.87% -0.46% 4.99% 5.91% 1.19% 0.54%
Decrease reflected in
above expense ratios due to
fee waivers and expense
reimbursements (6) 0.21% 0.13% 0.33 1.85% 0.30% 0.37% 30.29%
Portfolio turnover rate (7) 6.65% 26.49% 14.76% 30.52% 40.97% 0.28% 100.62%
Net Assets, end of year
(000's Omitted) $ 4 $ 4 $ 6 $ 4 $ 4 $ 4 $ 438

______________________________________
(1) For the period January 27, 1995 (commencement of operations) through April 30, 1995.
(2) For the period February 10, 1995 (commencement of operations) through April 30, 1995.
(3) For the period March 3, 1995 (commencement of operations) through April 30, 1995.
(4) For the period April 3, 1995 (commencement of operations) through April 30, 1995.
(5) The total return figures provided are not annualized and do not include the effect of any sales charge.
(6) Annualized.
(7) Not annualized.
(8) Includes net realized and unrealized gain on foreign currency transactions.
</TABLE>

See Notes to Financial Statements.

<PAGE>

Prairie Funds
Notes to Financial Statements (Unaudited)

Note 1 - General

Prairie Funds (the "Fund") is an open-end management
investment company registered under the Investment Company
Act of 1940 (the "Act"). At April 30, 1995, the Fund
consisted of fourteen investment portfolios. The
accompanying financial statements include the results of
operations for the following portfolios of the Fund: The
Equity Income Fund, The Growth Fund, The Special
Opportunities Fund, The International Bond Fund, The Bond
Fund, The International Equity Fund and the Managed Assets
Fund (collectively, the "Portfolios").

First Chicago Investment Management Company ("FCIMCO"), a
wholly-owned subsidiary of The First National Bank of
Chicago ("FNBC"), serves as the Fund's investment adviser and
administrator. FCIMCO has engaged ANB Investment Management
and Trust Company ("ANB") to serve as sub-investment adviser
for the International Equity Fund. Additionally, FCIMCO has
engaged Concord Holding Corporation ("Concord"), a wholly-
owned subsidiary of The BISYS Group, Inc. ("BISYS"), to serve
as the Fund's sub-administrator. Concord Financial Group,
Inc. ("Concord"), a wholly-owned subsidiary of BISYS, serves
as the principal underwriter and distributor of the Fund's
shares.

On January 27, 1995, First Chicago Personal Trust Equity Fund
and First Chicago Personal Trust Growth Equity Fund
transferred cash and securities to Prairie Equity Income Fund
having a market value of $198,087,162 in exchange for
19,808,716 Class I Shares.

On January 27, 1995, First Chicago Personal Trust Endowment
Equity Fund transferred cash and securities to Prairie Growth
Fund having a market value of $245,392,975 in exchange for
24,539,297 Class I Shares.

On January 27, 1995, First Chicago Personal Trust Special
Equity Fund transferred cash and securities to Prairie
Special Opportunities Fund having a market value of
$51,316,357 in exchange for 5,131,636 Class I Shares.

On January 27, 1995, First Chicago Personal Trust
International Bond Fund transferred cash, securities and
related accrued interest to Prairie International Bond Fund
having a market value of $8,955,517 in exchange for 895,552
Class I Shares.

On February 10, 1995, First Chicago Personal Trust Taxable
Bond Fund and First Chicago Personal Trust Endowment Bond
Fund transferred cash, securities and related accrued
interest to Prairie Bond Fund having a market value of
$98,997,057 in exchange of 9,899,706 Class I Shares.

On March 3, 1995, First Chicago Personal Trust International
Equity Fund transferred cash and securities to Prairie
International Equity Fund having a market value of
$48,338,875 in exchange for 4,833,888 Class I Shares.

The Portfolios offer Class A Shares, Class B Shares and Class
I Shares. Class A Shares, Class B Shares and Class I Shares
are substantially the same except that Class A Shares are
subject to a sales charge imposed at the time of purchase and
are subject to fees charged pursuant to a Shareholder
Services Plan, Class B Shares are subject to a contingent
deferred sales charge imposed at the time of redemption and
are subject to fees charged pursuant to a Distribution Plan
adopted pursuant to Rule 12b-1 under the Act and fees charged
pursuant to the Shareholder Services Plan, Class I Shares are
not subject to any sales charge.

Note 2 - Significant Accounting Policies

(a) Portfolio Valuation: Each Portfolio's fixed income
investments, with maturities in excess of 60 days, are valued
daily by an independent pricing service (the "Service") as
approved by the Fund's Board of Trustees. Investments for
which quoted bid prices, in the judgment of the Service, are
readily available and are representative of the bid side of
the market are valued at the mean between the quoted bid
prices (as obtained by the Service from dealers in such
securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities).
Other fixed income investments (which constitute a majority
of the portfolio securities) are carried at fair value as
determined by the Service, based upon methods which include
consideration of yields or prices of securities of comparable
quality, coupon rate, maturity and type; indication as to
values from dealers; and general market conditions. Fixed
income securities with maturities less than 60 days are
carried at amortized cost, which approximates market value.

Equity securities for which market quotations are readily
available are valued at the last reported sale price on the
securities exchange on which such securities are primarily
traded or at the last reported sale price on the NASDAQ
national securities market on the date of valuation.
Securities not listed on an exchange or the NASDAQ national
securities market, or securities for which there were no
transactions on the date of valuation, are valued at the mean
of the most recent bid and asked prices. Bid price is used
when no asked price is available.

Restricted securities and securities for which market
quotations are not readily available, if any, are valued at
fair value using methods approved by the Board of Trustees.

(b) Foreign currency translations: The books and records of
the International Bond Fund and the International Equity Fund
are maintained in U.S. dollars. Amounts denominated in
foreign currencies are translated into U.S. dollars on the
following basis: (I) investment securities, other assets and
liabilities initially expressed in foreign currencies are
converted each business day into U.S. dollars based upon
current exchange rates; (ii) purchases and sales of foreign
securities, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the
respective dates of such transactions.

Net realized and unrealized gains and losses on foreign
currency translations will represent: (i) foreign exchange
gains and losses from the sale and holdings of foreign
currencies and securities; (ii) gains and losses between
trade date and settlement date on investment securities
transactions and forward exchange contracts; and (iii) gains
and losses from the difference between amounts of dividends
and interest recorded and the amounts actually received.

(c) Futures contracts: The International Equity Fund may
engage in futures contracts for the purpose of hedging
against changes in the value of its portfolio securities and
in the value of securities it intends to purchase. Such
investments will only be made if they are economically
appropriate to the reduction of risks involved in the
management of the Portfolio. Upon entering into a futures
contract, the Portfolio is required to deposit with the
broker an amount of cash or cash equivalents equal to a
certain percentage of the contract amount. This is known as
the "initial margin". Subsequent payments ("variation
margin") are made or received by the Portfolio each day,
depending on the daily fluctuation of the value of the
contract. The daily changes in the contract are recorded as
unrealized gains or losses. The Portfolio recognizes a
realized gain or loss when the contract is closed.

There are several risks in connection with the use of futures
contracts as a hedging device. The change in value of
futures contracts primarily corresponds with the value of
their underlying instruments or indices, which may not
correlate with the change in value of the hedged investments.
In addition, there is the risk that the Portfolio may not be
able to enter into a closing transaction because of an
illiquid secondary market.

(d) Securities transactions and investment income:
Securities transactions are recorded on a trade date basis.
Realized gain and loss from securities transactions are
recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income,
adjusted for amortization of premiums and, when appropriate,
discounts on investments, is earned from settlement date and
recognized on the accrual basis. Securities purchased or
sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.

(e) Expenses: Expenses directly attributable to each
portfolio are charged to that Portfolio's operations;
expenses which are applicable to all Portfolios are allocated
between them.

(f) Dividends to Shareholders: It is the policy of the Bond
Fund and the International Bond Fund to declare dividends
daily from net investment income. Such dividends are paid
monthly. The Equity Income Fund declares and pays dividends
monthly while the Growth Fund, Special Opportunities Fund,
International Equity Fund and the Managed Assets Fund declare
and pay dividends quarterly. Distributions from net realized
capital gain, are normally declared and paid annually, but
each Portfolio may make distributions on a more frequent
basis to comply with the distribution requirements of the
Internal Revenue Code (the "Code"). However, to the extent
that a net realized capital gain of a Portfolio can be
reduced by capital loss carryovers, if any, of that
Portfolio, such gain will not be distributed.

The amounts of dividends from net investment income and of
distributions from net realized gains are determined in
accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These
"book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the
composition of net assets based on their federal tax-basis
treatment; temporary differences do not require
reclassification. Dividends and distributions to
shareholders which exceed net investment income and net
realized capital gains for financial reporting purposes but
not for tax purposes are reported as dividends in excess of
net realized capital gains. To the extent they exceed net
investment income and net realized gains for tax purposes,
they are reported as distributions of capital.

(g) Federal income taxes: It is the policy of each
Portfolio to continue to qualify as a regulated investment
company, which can distribute tax exempt dividends, by
complying with the provisions available to certain investment
companies, as defined in applicable sections of the Code, and
to make distribution of income and net realized capital gain
sufficient to relieve it from all, or substantially all,
federal income taxes. For federal income tax purposes, each
Portfolio is treated as a single entity for the purpose of
determining such qualification.

(h) Other: Organization expenses incurred by the Portfolios
are included in prepaid expenses and are being amortized to
operations over the period during which it is expected that a
benefit will be realized, not to exceed five years. At April
30, 1995, the unamortized balance of such expenses were as
follows:

Equity Income Fund $140,893
Growth Fund 140,876
Special Opportunities Fund 140,876
International Bond Fund 140,894
Bond Fund 141,690
International Equity Fund 142,867
Managed Assets Fund 72,970

Note 3 - Investment Advisory Fee, Administration Fee and
Other Transactions With Affiliates

(a) The Fund has an Investment Advisory Agreement with
FCIMCO pursuant to which FCIMCO has agreed to provide day-to-
day management of each Portfolio's investments at the
following annual rates:

Equity Income Fund 0.50%
Growth Fund 0.65%
Special Opportunities Fund 0.70%
International Bond Fund 0.70%
Bond Fund 0.55%
International Equity Fund 0.80%
Managed Assets Fund 0.65%

The Fund has an Administration Agreement with FCIMCO pursuant
to which FCIMCO has agreed to assist in all aspects of the
Portfolio's operations at an annual rate of 0.15% of each
Portfolio's average daily net assets. FCIMCO has engaged
Concord to provide certain administrative services to the
Portfolios pursuant to a Master Sub-Administration Agreement
between FCIMCO and Concord. FCIMCO has agreed to pay Concord
a fee from its own funds for the services stipulated in the
Master Sub-Administration Agreement.

Waived Waived Expense
Advisory Fee Admin. Fee
Reimbursement
Equity Income Fund $72,101 -
Growth Fund 72,150 -
Special Opportunities Fund 49,743 -
International Bond Fund 17,967 2,380 25,947
Bond Fund 49,048 -
International Equity Fund 27,484 -
Managed Assets Fund 330 47 13,361

The Distributor is not entitled to any fees pursuant to the
distribution agreement.

(b) The Portfolios' Class A Shares and Class B Shares have a
Shareholder Services Plan (the "Plan") pursuant to which the
Funds pay the Distributor a fee, at an annual rate of 0.25%
of the average daily net assets of the outstanding Class A
Shares and Class B Shares. Pursuant to the terms of the
Plan, the Distributor has agreed to provide certain
shareholder services to the holders of these shares.
Additionally, under the terms of the Plan, the Distributor
may make payments to other shareholder service agents who may
include FCIMCO, First Chicago and their affiliates. For the
period ended April 30, 1995, the Portfolios paid the
following amounts under the Plan, all of which was retained
by the Distributor:

Equity Income Fund $ 7
Growth Fund 98
Special Opportunities Fund 38
International Bond Fund 27
Bond Fund 52
International Equity Fund 68
Managed Assets Fund 118

(c) The Portfolios' Class B Shares have a Distribution Plan
adopted pursuant to Rule 12b-1 under the Act (the "12b-1
Plan") pursuant to which the Portfolios have agreed to pay
the Distributor for advertising, marketing and distributing
shares of the Funds at an annual rate of .75% of the average
daily net assets of the Funds' outstanding Class B Shares.
Under the terms of the 12b-1 Plan, the Distributor may make
payments to FCIMCO, First Chicago, and their affiliates in
respect of these services. For the period ended April 30,
1995, the Portfolios made the following payments under the
12b-1 Plan, all of which was retained by the Distributor:

Equity Income Fund $ 7
Growth Fund 7
Special Opportunities Fund 7
International Bond Fund 8
Bond Fund 6
International Equity Fund 4
Managed Assets Fund 237

(d) Certain officers of the Fund are "affiliated persons,"
as defined in the Act, of Concord. Each Board member who is
not an "affiliated person" receives from all of the
Portfolios an annual fee of $25,000 and an attendance fee of
$1,000 per meeting.

Note 4 - Securities Transactions

The following summarizes the securities transactions entered
into by the Portfolios, excluding short-term investments, for
the period ended April 30, 1995:

Purchases Sales

Equity Income Fund $28,786,408 $11,759,394
Growth Fund 83,982,615 60,766,757
Special Opportunities Fund 17,152,419 7,693,819
International Bond Fund 5,037,067 2,891,392
Bond Fund 40,776,421 21,046,414
International Equity Fund 14,931,832 141,245
Managed Assets Fund 677,159 -

At April 30 1995, accumulated net unrealized appreciation
(depreciation) on investments was as follows:

<TABLE>

Unrealized Unrealized Net Unrealized
Appreciation Depreciation Appreciation

<S> <C> <C> <C>
Equity Income Fund $12,316,654 $ 761,202 $11,555,452
Growth Fund 20,374,723 4,237,231 16,137,492
Special Opportunities Fund 4,638,705 2,118,080 2,520,625
International Bond Fund 915,216 70,122 845,094
Bond Fund 2,237,595 29,029 2,208,566
International Equity Fund 3,934,867 249,087 3,685,780
Managed Assets Fund 6,862 1,734 5,128
</TABLE>

At April 30, 1995, the cost of investments for federal income
tax purposes for each of the Portfolios was substantially the
same as the cost for financial reporting purposes (see the
Portfolios of Investments).

<PAGE>

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Included in Part A of the Registration
Statement:

Condensed Financial Information.

Included in Part B of the Registration
Statement:

Statements of Investments.

Statements of Assets and
Liabilities.

Statements of Operations.

Statements of Changes in Net Assets.

Notes to Financial Statements.

Reports of Ernst & Young LLP,
Independent Auditors.

(b) Exhibits:

(1) (a) The Registrant's Articles of
Incorporation are incorporated by
reference to Exhibit (1) of the
Registration Statement on Form N-1A,
filed on December 9, 1987.

(b) Amendment dated June 14, 1989 to the
Registrant's Articles of
Incorporation is incorporated by
reference to Exhibit (1)(b) of Post-
Effective Amendment No. 2 to the
Registration Statement on Form N-1A,
filed on June 28, 1989.

(c) Amendment dated September 12, 1989
to the Registrant's Articles of
Incorporation is incorporated by
reference to Exhibit (1)(c) of Post-
Effective Amendment No. 4 to the
Registration Statement on Form N-1A,
filed on June 29, 1990.

(d) Amendment dated January 26, 1994 to
the Registrant's Articles of
Incorporation is incorporated by
reference to Exhibit (1)(d) of Post-
Effective Amendment No. 9 to the
Registration Statement on Form N-1A,
filed on February 4, 1994.

(2) By-Laws are incorporated by
reference to Exhibit (2) of Post-
Effective Amendment No. 5 to the
Registration Statement on Form N-1A,
filed on May 14, 1991.

(5) Investment Advisory Agreement.

(6) Distribution Agreement.

(8) (a) Custody Agreement.

(8) (b) The Sub-Custodian Agreements are
incorporated by reference to Exhibit
(8)(b) of Post-Effective Amendment
No. 1 to the Registration Statement
on Form N-1A, filed on June 21,
1988, except with respect to the
Chemical Bank Sub-Custodian
Agreement, which is incorporated by
reference to Exhibit 8(b) of Post-
Effective Amendment No. 2 to the
Registration Statement on Form N-1A,
filed on June 28, 1989.

(9) (a) Administration Agreement.

(9) (b) Master Sub-Administration Agreement.

(9) (c) Shareholder Services Plan is
incorporated by reference to Exhibit
(9)(b) of Post-Effective Amendment
No. 9 to the Registration Statement
on Form N-1A, filed on February 9,
1994.

(10) Opinion (including consent) of
Stroock & Stroock & Lavan is
incorporated by reference to Exhibit
(10) of Pre-Effective Amendment No.
1 to the Registration Statement on
Form N-1A, filed on December 21,
1987.

(11) Consent of Independent Auditors.

(15) Distribution Plan is incorporated by
reference to Exhibit (15)(b) of
Post-Effective Amendment No. 9 to
the Registration Statement on Form
N-1A, filed on February 9, 1994.

(16) Performance Calculation Schedule is
incorporated by reference to Exhibit
(16) of Post-Effective Amendment No.
10 to the Registration Statement on
Form N-1A, filed on June 27, 1994.
(18) Rule 18f-3 Plan.

Other Exhibit:
Secretary's Certificate is
incorporated by reference to Other
Exhibit of Post-Effective Amendment
No. 2 to the Registration Statement
on Form N-1A, filed on June 28,
1989.

Item 25. Persons Controlled by or Under Common Control
with Registrant

Not applicable.

Item 26. Number of Holders of Securities

(1) (2)
Number of Record
Holders
Title of Class as of May 31, 1995

Shares of Common Stock,
par value $.001 per share

Class A 313
Class B 3
Class I 18

Item 27. Indemnification

Reference is made to Article SEVENTH, as
amended, of the Registrant's Articles of Incorporation,
incorporated by reference to Exhibit (1)(b) of Post-Effective
Amendment No. 2 to the Registration Statement on Form N-1A,
filed on June 28, 1989. The application of these provisions is
limited by Article VIII of the Registrant's By-Laws, as amended,
incorporated by reference to Exhibit (2) of Post-Effective
Amendment No. 5 to the Registration Statement on Form N-1A,
filed on May 14, 1991 and the following undertaking set forth in
the rules promulgated by the Securities and Exchange Commission:

Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.

Reference also is made to the Distribution
Agreement filed as Exhibit 6 hereto.

Item 28. Business and Other Connections of Investment
Adviser

Investment Adviser

Registrant is fulfilling the requirement of
this Item 28 to provide a list of the officers and directors of
First Chicago Investment Management Company (the "Investment
Adviser"), together with information as to any other business,
profession, vocation or employment of a substantial nature
engaged in by the Investment Adviser or those of its officers
and directors during the past two years, by incorporating by
reference the information contained in the Form ADV filed with
the SEC pursuant to the Investment Advisers Act of 1940 by the
Investment Adviser (SEC File No. 801-47947).

Item 29. Principal Underwriters

(a) Other investment companies for which
Registrant's principal underwriter (exclusive distributor) acts
as principal underwriter or exclusive distributor:

The Infinity Mutual Funds, Inc.
Pacific Horizon Funds, Inc.
Prairie Institutional Funds
Prairie Funds
Prairie Intermediate Bond Fund

(b) The information required by this Item
29(b) regarding each director or officer of Concord Financial
Group, Inc. is incorporated by reference to Schedule A of Form
BD filed by Concord Financial Group, Inc. pursuant to the
Securities Exchange Act of 1934 (SEC File No. 8-37601).

Item 30. Location of Accounts and Records

1. First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670

2. Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019

3. Primary Funds Service Corp.
P.O. Box 9743
Providence, Rhode Island 02940-9743

4. The Bank of New York
90 Washington Street
New York, New York 10286

Item 31. Management Services

Not Applicable

Item 32. Undertakings

Registrant hereby undertakes

(1) To call a meeting of shareholders for the
purpose of voting upon the question of removal
of a director or directors when requested in
writing to do so by the holders of at least 10%
of the Registrant's outstanding shares of
common stock and in connection with such
meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.

(2) To furnish each person to whom a prospectus is
delivered with a copy of the Registrant's
latest Annual Report to Shareholders, upon
request and without charge.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the
Registrant certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in
this City of New York, and State of New York, on the 31st day of
May, 1995.

PRAIRIE MUNICIPAL BOND FUND, INC.

BY:/s/ Joseph F. Kissel*
Joseph F. Kissel, President

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

Signatures Title Date

/s/Joseph F. Kissel* President May 31, 1995
Joseph F. Kissel (Principal
Executive Officer)

/s/ Richard A. Fabietti* Treasurer May 31, 1995
Richard A. Fabietti (Principal Financial
and Accounting
Officer)

/s/ John P. Gould* Director May 31, 1995
John P. Gould

/s/ Marilyn McCoy* Director May 31, 1995
Marilyn McCoy

/s/ Raymond D. Oddi* Director May 31, 1995
Raymond D. Oddi

*By: /s/ Ann E. Bergin May 31, 1995
Ann E. Bergin, As
Attorney-in-fact

PRAIRIE MUNICIPAL BOND FUND, INC.

Post-Effective Amendment No. 13 to

Registration Statement on Form N-1A under

the Securities Act of 1933 and

the Investment Company Act of 1940

EXHIBITS

<PAGE>

INDEX TO EXHIBITS

Page

(5) Investment Advisory Agreement. . . . . . . .

(6) Distribution Agreement . . . . . . . . . . .

(8)(a) Custody Agreement . . . . . . . . . . . . .

(9)(a) Administration Agreement. . . . . . . . . .

(9)(b) Master Sub-Administration Agreement . . . .

(11) Consent of Independent Auditors . . . . . .

(18) Rule 18f-3 Plan . . . . . . . . . . . . .

<PAGE>
Exhibit 5

INVESTMENT ADVISORY AGREEMENT

PRAIRIE MUNICIPAL BOND FUND, INC.
West 55th Street
New York, New York 10019

January 1, 1995

First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670

Dear Sirs:

The above-named investment company (the "Fund")
consisting of the series, if any, named on Schedule 1 hereto,
as such Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as
follows:

The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which
have been or will be submitted to you, and in such manner and
to such extent as from time to time may be approved by the
Fund's Board. The Fund desires to employ you to act as its
investment adviser.

In this connection it is understood that from time
to time you will employ or associate with yourself such person
or persons as you may believe to be particularly fitted to
assist you in the performance of this Agreement. Such person
or persons may be officers or employees who are employed by
both you and the Fund. The compensation of such person or
persons shall be paid by you and no obligation may be incurred
on the Fund's behalf in any such respect.

Subject to the supervision and approval of the
Fund's Board, you will provide investment management of each
Series' portfolio in accordance with such Series' investment
objectives and policies as stated in the Fund's Prospectus and
Statement of Additional Information as from time to time in
effect. In connection therewith, you will obtain and provide
investment research and will supervise each Series'
investments and conduct a continuous program of investment,
evaluation and, if appropriate, sale and reinvestment of such
Series' assets. You will furnish to the Fund such statistical
information, with respect to the investments which a Series
may hold or contemplate purchasing, as the Fund may reasonably
request. The Fund wishes to be informed of important
developments materially affecting any Series' portfolio and
shall expect you, on your own initiative, to furnish to the
Fund from time to time such information as you may believe
appropriate for this purpose.

You shall exercise your best judgment in rendering
the services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you
shall not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or
purport to protect you against any liability to the Fund or a
Series or to its security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations
and duties hereunder.

In consideration of services rendered pursuant to
this Agreement, the Fund will pay you on the first business
day of each month a fee at the rate set forth opposite each
Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described
in the Fund's then-current Prospectus and Statement of
Additional Information. The fee for the period from the date
of the commencement of the public sale of a Series' shares to
the end of the month during which such sale shall have been
commenced shall be pro-rated according to the proportion which
such period bears to the full monthly period, and upon any
termination of this Agreement before the end of any month, the
fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.

For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.

You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed
by you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions
paid on securities sold short, brokerage fees and commissions,
if any, fees of Board members, Securities and Exchange Commis-
sion fees and state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Series'
existence, costs attributable to investor services (including,
without limitation, telephone and personnel expenses), costs
of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing stockholders, costs of stockholders'
reports and meetings, and any extraordinary expenses.

As to each Series, if in any fiscal year the
aggregate expenses of a Series (including fees pursuant to
this Agreement, but excluding interest, taxes, brokerage and,
with the prior written consent of the necessary state
securities commissions, extraordinary expenses) exceed the
expense limitation of any state having jurisdiction over such
Series, the Fund may deduct from the fees to be paid
hereunder, or you will bear, such excess expense to the extent
required by state law. Your obligation pursuant hereto will
be limited to the amount of your fees hereunder. Such
deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a
monthly basis.

The Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to
one or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities
of the same issuer is suitable for the investment objectives
of two or more companies or accounts managed by you which have
available funds for investment, the available securities will
be allocated in a manner believed by you to be equitable to
each company or account. It is recognized that in some cases
this procedure may adversely affect the price paid or received
by one or more Series or the size of the position obtainable
for or disposed of by one or more Series.

In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict
your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render
services of whatever kind or nature.

You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad
faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though
also your officer, director, partner, employee or agent, who
may be or become an officer, Board member, employee or agent
of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund, to be rendering
such services to or acting solely for the Fund and not as your
officer, director, partner, employee or agent or one under
your control or direction even though paid by you.

As to each Series, this Agreement shall continue
until the date set forth opposite such Series' name on
Schedule 1 hereto (the "Reapproval Date") and thereafter shall
continue automatically for successive annual periods ending on
the day of each year set forth opposite the Series' name on
Schedule 1 hereto (the "Reapproval Day"), provided such
continuance is specifically approved at least annually by
(i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of such
Series' outstanding voting securities, provided that in either
event its continuance also is approved by a majority of the
Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting
on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series'
shares or, upon not less than 90 days' notice, by you. This
Agreement also will terminate automatically, as to the
relevant Series, in the event of its assignment (as defined in
said Act).

The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
investment advisory or other agreements with such other
entities. If you cease to act as the Fund's investment
adviser, the Fund agrees that, at your request, the Fund will
take all necessary action to change the name of the Fund to a
name not including "Prairie" in any form or combination of
words.

If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.

Very truly yours,

PRAIRIE MUNICIPAL BOND FUND, INC.

By:__________________________

Accepted:

FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY

By:______________________________

<PAGE>
<TABLE>
<CAPTION> SCHEDULE 1

Annual Fee
as a
Percentage
of Average
Daily Net Reapproval Reapproval
Name of Fund or Series Assets Date Date

<S> <C> <C> <C>
Prairie Municipal Bond
Fund, Inc. .40% December 31, 1996 December
31st

</TABLE>
<PAGE>

Exhibit 6

DISTRIBUTION AGREEMENT

PRAIRIE MUNICIPAL BOND FUND, INC.
125 West 55th Street
New York, New York 10019

March 29, 1995

Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019

Dear Sirs:

This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named investment
company (the "Fund") has agreed that you shall be, for the
period of this agreement, the distributor of (a) shares of each
series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a
"Series") or (b) if no Series are set forth on such Exhibit,
shares of the Fund. For purposes of this agreement the term
"Shares" shall mean the authorized shares of the relevant
Series, if any, and otherwise shall mean the Fund's authorized
shares.

1. Services as Distributor

1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities Act
of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the
Fund of which the Fund has notified you in writing.

1.2 You agree to use your best efforts to
solicit orders for the sale of Shares. It is contemplated that
you will enter into sales or servicing agreements with
securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will
act only on your own behalf as principal.

1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under
the Securities Exchange Act of 1934, as amended.

1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.

1.5 The Fund agrees to pay all costs and
expenses in connection with the registration of Shares under the
Securities Act of 1933, as amended, and all expenses in
connection with maintaining facilities for the issue and
transfer of Shares and for supplying information, prices and
other data to be furnished by the Fund hereunder,
and all expenses in connection with the preparation and printing
of the Fund's prospectuses and statements of additional
information for regulatory purposes and for distribution to
shareholders; provided, however, that nothing contained herein
shall be deemed to require the Fund to pay any of the costs of
advertising the sale of Shares.

1.6 The Fund agrees to execute any and all
documents and to furnish any and all information and otherwise
to take all actions which may be reasonably necessary in the
discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as
you may designate to the Fund and the Fund may approve, and the
Fund agrees to pay all expenses which may be incurred in
connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or
Federal laws and, except as otherwise specifically provided in
this agreement, all other expenses incurred by you in connection
with the sale of Shares as contemplated in this agreement.

1.7 The Fund shall furnish you from time to
time, for use in connection with the sale of Shares, such
information with respect to the Fund or any relevant Series and
the Shares as you may reasonably request, all of which shall be
signed by one or more of the Fund's duly authorized officers;
and the Fund warrants that the statements contained
in any such information, when so signed by the Fund's officers,
shall be true and correct. The Fund also shall furnish you upon
request with: (a) semi-annual reports and annual audited
reports of the Fund's books and accounts made by independent
public accountants regularly retained by the
Fund, (b) quarterly earnings statements prepared by the Fund,
(c) a monthly itemized list of the securities in the Fund's or,
if applicable, each Series' portfolio, (d) monthly balance
sheets as soon as practicable after the end of each month, and
(e) from time to time such additional information regarding the
Fund's financial condition as you may reasonably request.

1.8 The Fund represents to you that all
registration statements and prospectuses filed by the Fund with
the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares
have been carefully prepared in conformity with the requirements
of said Acts and rules and regulations of the Securities and
Exchange Commission thereunder. As used in this agreement the
terms "registration statement" and "prospectus" shall mean any
registration statement and prospectus, including the statement
of additional information incorporated by
reference therein, filed with the Securities and Exchange
Commission and any amendments and supplements thereto which at
any time shall have been filed with said Commission. The Fund
represents and warrants to you that any registration statement
and prospectus, when such registration statement becomes
effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration
statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Fund may but shall not be
obligated to propose from time to time such amendment or
amendments to any registration statement and such supplement or
supplements to any prospectus as, in the light of future
developments, may, in the opinion of the
Fund's counsel, be necessary or advisable. If the Fund shall
not propose such amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the Fund of a
written request from you to do so, you may, at your option,
terminate this agreement or decline to make
offers of the Fund's securities until such amendments are made.
The Fund shall not file any amendment to any registration
statement or supplement to any prospectus without giving you
reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.

1.9 The Fund authorizes you to use any
prospectus in the form furnished to you from time to time, in
connection with the sale of Shares. The Fund agrees to
indemnify, defend and hold you, your
several officers and directors, and any person who controls you
within the meaning of Section 15 of the Securities Act of 1933,
as amended, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims,
demands or liabilities and any counsel fees incurred in
connection therewith) which you, your officers and directors, or
any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue
statement, of a material fact contained in any
registration statement or any prospectus or arising out of or
based upon any omission, or alleged omission, to state a
material fact required to be stated in either any registration
statement or any prospectus or necessary
to make the statements in either thereof not misleading;
provided, however, that the Fund's agreement to indemnify you,
your officers or directors, and any such controlling person
shall not be deemed to cover any claims, demands, liabilities or
expenses arising out of any untrue statement or alleged untrue
statement or omission or alleged omission made
in any registration statement or prospectus in reliance upon and
in conformity with written information furnished to the Fund by
you specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by
telegram addressed to the Fund at its address set forth above
within ten days after the summons or other first legal process
shall have been served. The failure so to notify the Fund of
any such action shall not relieve the Fund from any liability
which the Fund may have to the person
against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of the Fund's indemnity
agreement contained in this paragraph 1.9. The Fund will be
entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but, in
such case, such defense shall be conducted by counsel of good
standing chosen by the Fund and approved by you. In the event
the Fund elects to assume the defense of any such suit and
retain counsel of good standing approved by
you, the defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by any of
them; but in case the Fund does not elect to assume the defense
of any such suit, or in case you do not approve of counsel
chosen by the Fund, the Fund will reimburse
you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the
fees and expenses of any counsel retained by you or them. The
Fund's indemnification agreement contained in this paragraph 1.9
and the Fund's representations and warranties in this agreement
shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any
controlling persons and their successors. The Fund agrees
promptly to notify you of the commencement of any litigation or
proceedings against the Fund or any of its officers or Board
members in connection with the issue and sale of Shares.

1.10 You agree to indemnify, defend and hold
the Fund, its several officers and Board members, and any person
who controls the Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Fund, its officers
or Board members, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common
law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its officers or
Board members, or such controlling person resulting from such
claims or demands, shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by
you to the Fund specifically for use in the Fund's registration
statement and used in the answers to any of the items of the
registration statement or in the corresponding statements made
in the prospectus, or shall arise out of or be based upon any
omission, or alleged omission, to state a
material fact in connection with such information furnished in
writing by you to the Fund and required to be stated in such
answers or necessary to make such information not misleading.
Your agreement to indemnify the Fund, its officers and Board
members, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of
any action brought against the Fund, its officers or Board
members, or any such controlling person, such notification to be
given by letter or telegram addressed to you at your address set
forth above within ten days after the
summons or other first legal process shall have been served.
You shall have the right to control the defense of such action,
with counsel of your own choosing, satisfactory to the Fund, if
such action is based solely upon such alleged misstatement or
omission on your part, and in any other
event the Fund, its officers or Board members, or such
controlling person shall each have the right to participate in
the defense or preparation of the defense of any such action.
The failure so to notify you of any such
action shall not relieve you from any liability which you may
have to the Fund, its officers or Board members, or to such
controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement
contained in this paragraph 1.10. This agreement of indemnity
will inure exclusively to the Fund's benefit, to the benefit of
the Fund's officers and Board members, and their respective
estates, and to the benefit of any controlling persons and their
successors.

You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.

1.11 No Shares shall be offered by either you
or the Fund under any of the provisions of this agreement and no
orders for the purchase or sale of such Shares hereunder shall
be accepted by the Fund if and so long as the effectiveness of
the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of
the provisions of the Securities Act of 1933, as amended, or if
and so long as a current prospectus as required by Section 10 of
said Act, as amended, is not on file with the Securities and
Exchange Commission; provided, however, that nothing contained
in this paragraph 1.11 shall in any way restrict or have an
application to or bearing upon the Fund's
obligation to repurchase any Shares from any shareholder in
accordance with the provisions of the Fund's prospectus or
charter documents.

1.12 The Fund agrees to advise you immediately
in writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the
registration
statement or prospectus then in effect or for
additional information;

(b) in the event of the issuance by
the Securities and Exchange Commission of any
stop order suspending the effectiveness of the
registration statement or prospectus then in
effect or the initiation of any proceeding for
that purpose;

(c) of the happening of any event
which makes untrue any statement of a material
fact made in the registration statement or
prospectus then in effect
or which requires the making of a change in such
registration statement or prospectus in order to
make the statements therein not misleading; and

(d) of all actions of the Securities
and Exchange Commission with respect to any
amendments to any registration statement or
prospectus which may from
time to time be filed with the Securities and
Exchange Commission.

2. Offering Price

Shares of any class of the Fund offered for sale
by you shall be offered for sale at a price per share (the
"offering price") approximately equal to (a) their net asset
value (determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any
and except to those persons set forth in the then-current
prospectus, which shall be the percentage of the offering price
of such Shares as set forth in the Fund's then-current
prospectus. The offering price, if not
an exact multiple of one cent, shall be adjusted to the nearest
cent. In addition, Shares of any class of the Fund offered for
sale by you may be subject to a contingent deferred sales charge
as set forth in the Fund's then-current prospectus. You shall
be entitled to receive any sales charge or contingent deferred
sales charge in respect of the Shares. Any
payments to dealers shall be governed by a separate agreement
between you and such dealer and the Fund's then-current
prospectus.

3. Term

This agreement shall continue until the date
(the "Reapproval Date") set forth on Exhibit A hereto (and, if
the Fund has Series, a separate Reapproval Date shall be
specified on Exhibit A for each Series), and thereafter shall
continue automatically for successive annual periods ending on
the day (the "Reapproval Day") of each year set
forth on Exhibit A hereto, provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment Company
Act of 1940) of the Shares of the Fund or the relevant Series,
as the case may be, provided that in either event its
continuance also is approved by a majority of
the Board members who are not "interested persons" (as defined
in said Act) of any party to this agreement, by vote cast in
person at a meeting called for the purpose of voting on such
approval. This agreement is terminable without penalty, on 60
days' notice, by vote of holders of a majority of
the Fund's or, as to any relevant Series, such Series'
outstanding voting securities or by the Fund's Board as to the
Fund or the relevant Series, as the case may be. This agreement
is terminable by you, upon 270 days' notice, effective on or
after the fifth anniversary of the date hereof.
This agreement also will terminate automatically, as to the Fund
or relevant Series, as the case may be, in the event of its
assignment (as defined in said Act).

4. Exclusivity

The Fund acknowledges that the persons employed
by you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates' right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.

Please confirm that the foregoing is in
accordance with your understanding and indicate your acceptance
hereof by signing below, whereupon it shall become a binding
agreement between us.
Very truly yours,

PRAIRIE MUNICIPAL BOND
FUND, INC.

By:_________________________

Accepted:

CONCORD FINANCIAL GROUP, INC.

By:________________________

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A

Name of Fund or Series Reapproval Date
Reapproval Day

<S> <C> <C>
Prairie Municipal Bond December 31, 1996
December 31st
Fund, Inc.

</TABLE>
<PAGE>

Exhibit 8(a)

CUSTODY AGREEMENT

Custody Agreement made as of January 17, 1995 between
PRAIRIE MUNICIPAL BOND FUND, INC., a business trust organized
and existing under the laws of the Commonwealth of
Massachusetts, having its principal office and place of business
at 125 West 55th Street, New York, New York 10019 (hereinafter
called the "Fund"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its
principal office and place of business at 110 Washington Street,
New York, New York 10286 (hereinafter called the "Custodian").

W I T N E S S E T H :

that for and in consideration of the mutual promises hereinafter
set forth the Fund and the Custodian agree as follows:

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have
the following meanings:

1. "Authorized Person" shall be deemed to include the
Treasurer, the Controller or any other person, whether or not
any such person is an Officer or employee of the Fund, duly
authorized by the Fund's Board to give Oral Instructions and
Written Instructions on behalf of the Fund and listed in the
Certificate annexed hereto as Appendix A or
such other Certificate as may be received by the Custodian from
time to time.

2. "Available Balance" shall mean for any given day
during a calendar year the aggregate amount of Federal Funds
held in the Fund's custody account(s) at The Bank of New York,
or its successors, as of the close of such day or, if such day
is not a business day, the close of the preceding business day.

3. "Bankruptcy" shall mean with respect to a party
such party's making a general assignment, arrangement or
composition with or for the benefit of its creditors, or
instituting or having instituted against it a proceeding seeking
a judgment of insolvency
or bankruptcy or the entry of an order for relief under the
Federal
bankruptcy law or any other relief under any bankruptcy or
insolvency law
or other similar law affecting creditors' rights, or if a
petition is
presented for the winding up or liquidation of the party or a
resolution
is passed for its winding up or liquidation, or it seeks, or
becomes
subject to, the appointment of an administrator, receiver,
trustee,
custodian or other similar official for it or for all or
substantially all
of its assets or its taking any action in furtherance of, or
indicating
its consent to approval of, or acquiescence in, any of the
foregoing.

4. "Book-Entry System" shall mean the Federal Reserve/
Treasury book-entry system for United States and Federal agency
securities, its successor or successors and its nominee or
nominees.

5. "Call Option" shall mean an exchange traded option
with
respect to Securities other than Stock Index Options, Futures
Contracts
and Futures Contract Options entitling the holder, upon timely
exercise
and payment of the exercise price, as specified therein, to
purchase from
the writer thereof the specified underlying Securities.

6. "Certificate" shall mean any notice, instruction,
or other
instrument in writing, authorized or required by this Agreement
to be
given to the Custodian, which is actually received by the
Custodian and
signed on behalf of the Fund by any two Officers of the Fund.

7. "Clearing Member" shall mean a registered
broker-dealer
which is a clearing member under the rules of O.C.C. and a
member of a
national securities exchange qualified to act as a custodian for
an
investment company, or any broker-dealer reasonably believed by
the
Custodian to be such a clearing member.

8. "Collateral Account" shall mean a segregated
account so
denominated and pledged to the Custodian as security for, and in
consideration of, the Custodian's issuance of (a) any Put Option
guarantee
letter or similar document described in paragraph 8 of Article V
herein,
or (b) any receipt described in Article V or VIII herein.

9. "Consumer Price Index" shall mean the U.S. Consumer
Price
Index, all items and all urban consumers, U.S. city average
1982-84 equals
100, as first published without seasonal adjustment by the
Bureau of Labor
Statistics, the Department of Labor, without regard to
subsequent
revisions or corrections by such Bureau.

10. "Covered Call Option" shall mean an exchange
traded option
entitling the holder, upon timely exercise and payment of the
exercise
price, as specified therein, to purchase from the writer thereof
the
specified Securities (excluding Futures Contracts) which are
owned by the
writer thereof and subject to appropriate restrictions.

11. "Depository" shall mean The Depository Trust
Company
("DTC"), a clearing agency registered with the Securities and
Exchange
Commission, its successor or successors and its nominee or
nominees,
provided the Custodian has received a certified copy of a
resolution of
the Fund's Board specifically approving deposits in DTC. The
term
"Depository" shall further mean and include any other person
authorized to
act as a depository under the Investment Company Act of 1940, as
amended,
its successor or successors and its nominee or nominees,
specifically
identified in a certified copy of a resolution of the Fund's
Board
specifically approving deposits therein by the Custodian.

12. "Federal Funds" shall mean immediately available
same day
funds.

13. "Federal Funds Rate" shall mean, for any day, the
Federal
Funds (Effective) interest rate so denominated as published in
Federal
Reserve Statistical Release H.15 (519) and applicable to such
day and each
succeeding day which is not a business day.

14. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities, including,
without
limitation, U.S. Treasury Bills, U.S. Treasury Notes, U.S.
Treasury Bonds,
domestic bank certificates of deposit, and Eurodollar
certificates of
deposit, during a specified month at an agreed upon price.

15. "Futures Contract" shall mean a Financial Futures
Contract
and/or Stock Index Futures Contracts.

16. "Futures Contract Option" shall mean an option
with
respect to a Futures Contract.

17. "Margin Account" shall mean a segregated account
in the
name of a broker, dealer, futures commission merchant or
Clearing Member,
or in the name of the Fund for the benefit of a broker, dealer,
futures
commission merchant or Clearing Member, or otherwise, in
accordance with
an agreement between the Fund, the Custodian and a broker,
dealer, futures
commission merchant or Clearing Member (a "Margin Account
Agreement"),
separate and distinct from the custody account, in which certain
Securities and/or money of the Fund shall be deposited and
withdrawn from
time to time in connection with such transactions as the Fund
may from
time to time determine. Securities held in the Book-Entry
System or the
Depository shall be deemed to have been deposited in, or
withdrawn from, a
Margin Account upon the Custodian's effecting an appropriate
entry on its books and records.

18. "Merger" shall mean with respect to a party, the
consolidation or amalgamation with, merger into, or transfer of
all or
substantially all of such party's assets to, another entity,
where such
party is not the surviving entity.

19. "Money Market Security" shall be deemed to
include,
without limitation, debt obligations issued or guaranteed as to
principal
and interest by the government of the United States or agencies
or
instrumentalities thereof, commercial paper, certificates of
deposit and
bankers' acceptances, repurchase and reverse repurchase
agreements with
respect to the same and bank time deposits, where the purchase
and sale of
such securities ordinarily requires settlement in Federal funds
on the
same date as such purchase or sale.

20. "O.C.C." shall mean Options Clearing Corporation,
a
clearing agency registered under Section 17A of the Securities
Exchange
Act of 1934, its successor or successors, and its nominee or
nominees.

21. "Officers" shall be deemed to include the
President, any
Vice President, the Secretary, the Treasurer, the Controller,
any
Assistant Secretary, any Assistant Treasurer or any other person
or
persons duly authorized by the Fund's Board to execute any
Certificate,
instruction, notice or other instrument on behalf of the Fund
and listed
in the Certificate annexed hereto as Appendix B or such other
Certificate
as may be received by the Custodian from time to time.

22. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.

23. "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from an Authorized Person or
from a
person reasonably believed by the Custodian to be an Authorized
Person.

24. "Prospectus" shall mean the last Fund prospectus
actually
received by the Custodian from the Fund with respect to which
the Fund has
indicated a registration statement under the Federal Securities
Act of
1933 has become effective, including the statement of additional
information incorporated by reference therein.

25. "Put Option" shall mean an exchange traded option
with
respect to Securities other than Stock Index Options, Futures
Contracts,
and Futures Contract Options entitling the holder, upon timely
exercise
and tender of the specified underlying Securities, to sell such
Securities
to the writer thereof for the exercise price.

26. "Reverse Repurchase Agreement" shall mean an
agreement
pursuant to which the Fund sells Securities and agrees to
repurchase such
Securities at a described or specified date and price.

27. "Security" shall be deemed to include, without
limitation,
Money Market Securities, Call Options, Put Options, Stock Index
Options,
Stock Index Futures Contracts, Stock Index Futures Contract
Options,
Financial Futures Contracts, Financial Futures Contract Options,
Reverse
Repurchase Agreements, common stock and other instruments or
rights having
characteristics similar to common stocks, preferred stocks, debt
obligations issued by state or municipal governments and by
public
authorities (including, without limitation, general obligation
bonds,
revenue bonds and industrial bonds and industrial development
bonds),
bonds, debentures, notes, mortgages or other obligations, and
any
certificates, receipts, warrants or other instruments
representing rights
to receive, purchase, sell or subscribe for the same, or
evidencing or
representing any other rights or interest therein, or any
property or assets.

28. "Segregated Security Account" shall mean an
account
maintained under the terms of this Agreement as a segregated
account, by
recordation or otherwise, within the custody account in which
certain
Securities and/or other assets of the Fund shall be deposited
and
withdrawn from time to time in accordance with Certificates
received by
the Custodian in connection with such transactions as the Fund
may from time to time determine.

29. "Series" shall mean (i) the Series of the Fund
specified
on Appendix D hereto, or, where the context requires each such
Series, or
(ii) if no Series are set forth on such Appendix, the Fund.

30. "Shares" shall mean the shares of common stock of
any
Series of the Fund, each of which is allocated to a particular
Series.

31. "Stock Index Futures Contract" shall mean a
bilateral
agreement pursuant to which the parties agree to take or make
delivery of
an amount of cash equal to a specified dollar amount times the
difference
between the value of a particular stock index at the close of
the last
business day of the contract and the price at which the futures
contract
is originally struck.

32. "Stock Index Option" shall mean an exchange traded
option
entitling the holder, upon timely exercise, to receive an amount
of cash
determined by reference to the difference between the exercise
price and
the value of the index on the date of exercise.

33. "Written Instructions" shall mean written
communications
actually received by the Custodian from an Authorized Person or
from a
person reasonably believed by the Custodian to be an Authorized
Person by
telex or any other such system whereby the receiver of such
communications
is able to verify by codes or otherwise with a reasonable degree
of
certainty the authenticity of the sender of such communication.

ARTICLE II

APPOINTMENT OF CUSTODIAN

1. The Fund hereby constitutes and appoints the
Custodian as
custodian of the Securities and moneys at any time owned by the
Fund during the period of this Agreement.

2. The Custodian hereby accepts appointment as such
custodian
and agrees to perform the duties thereof as hereinafter set
forth.

ARTICLE III

CUSTODY OF CASH AND SECURITIES

1. Except as otherwise provided in paragraph 7 of this
Article
and in Article VIII, the Fund will deliver or cause to be
delivered to the
Custodian all Securities and all moneys owned by any Series,
including
cash received for the issuance of such Series' shares, at any
time during
the period of this Agreement and shall specify the Series, if
any, to
which the same are to be specifically allocated. The Custodian
will not
be responsible for such Securities and such moneys until
actually received
by it. The Custodian will be entitled to reverse any credits
made on a
Series' behalf where such credits have been previously made and
moneys are
not finally collected. The Fund shall deliver to the Custodian
a
certified resolution of the Fund's Board approving, authorizing
and
instructing the Custodian on a continuous and on-going basis to
deposit in
the Book-Entry System all Securities eligible for deposit
therein and to
utilize the Book-Entry System to the extent possible in
connection with
its performance hereunder, including, without limitation, in
connection
with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral.

Prior to
a deposit of Securities of a Series in the Depository, the Fund
shall
deliver to the Custodian a certified resolution of the Fund's
Board
approving, authorizing and instructing the Custodian on a
continuous and
on-going basis until instructed to the contrary by a Certificate
actually
received by the Custodian to deposit in the Depository all
Securities
eligible for deposit therein and to utilize the Depository to
the extent
possible in connection with its performance hereunder,
including, without
limitation, in connection with settlements of purchases and
sales of
Securities, loans of Securities, and deliveries and returns of
Securities
collateral. Securities and moneys of such Series deposited in
either the
Book-Entry System or the Depository will be represented in
accounts which
include only assets held by the Custodian for customers,
including, but
not limited to, accounts in which the Custodian acts in a
fiduciary or
representative capacity. Prior to the Custodian's accepting,
utilizing
and acting with respect to Clearing Member confirmations for
Options and
transactions in Options as provided in this Agreement, the
Custodian shall
have received a certified resolution of the Fund's Board
approving,
authorizing and instructing the Custodian on a continuous and
on-going
basis, until instructed to the contrary by a Certificate
actually received
by the Custodian, to accept, utilize and act in accordance with
such
confirmations as provided in this Agreement.

2. The Custodian shall credit to a separate account in
the
name of the Fund for each Series all moneys received by it for
the account
of the Fund, with respect to such Series. Money credited to the
separate
account for a Series shall be disbursed by the Custodian only:

(a) In payment for Securities purchased, as provided
in Article IV hereof;

(b) In payment of dividends or distributions, as
provided in Article XI hereof;

(d) In payment for Shares redeemed by it, as provided
in Article XII hereof;

(e) Pursuant to Certificates setting forth the name
and
address of the person to whom the payment is to be made, the
Series
account from which payment is to be made and the purpose for
which payment is to be made; or

(f) In payment of the fees and in reimbursement of the
expenses and liabilities of the Custodian, as provided in
Article XV hereof.

3. Promptly after the close of business on each day,
the
Custodian shall furnish the Fund with confirmations and a
summary of all
transfers to or from the account of each Series during said day.

Where
Securities are transferred to the account of a Series, the
Custodian shall
also by book-entry or otherwise identify as belonging to such
Series a
quantity of Securities in a fungible bulk of Securities
registered in the
name of the Custodian (or its nominee) or shown on the
Custodian's account
on the books of the Book-Entry System or the Depository. At
least monthly
and from time to time, the Custodian shall furnish the Fund with
a
detailed statement of the Securities and moneys held for each
Series under
this Agreement.

4. Except as otherwise provided in paragraph 7 of this
Article
and in Article VIII, all Securities held for a Series, which are
issued or
issuable only in bearer form, except such Securities as are held
in the
Book-Entry System, shall be held by the Custodian in that form;
all other
Securities held for a Series may be registered in the name of
such Series,
in the name of any duly appointed registered nominee of the
Custodian as
the Custodian may from time to time determine, or in the name of
the Book-
Entry System or the Depository or their successor or successors,
or their
nominee or nominees. The Fund agrees to furnish to the
Custodian
appropriate instruments to enable the Custodian to hold or
deliver in
proper form for transfer, or to register in the name of its
registered
nominee or in the name of the Book-Entry System or the
Depository, any
Securities which it may hold for the account of a Series and
which may
from time to time be registered in the name of such Series. The
Custodian
shall hold all such Securities which are not held in the
Book-Entry System
or in the Depository in a separate account in the name of such
Series
physically segregated at all times from those of any other
person or persons.

5. Except as otherwise provided in this Agreement and
unless
otherwise instructed to the contrary by a Certificate, the
Custodian by
itself, or through the use of the Book-Entry System or the
Depository with
respect to Securities therein deposited, shall with respect to
all
Securities held for each Series in accordance with this
Agreement:

(a) Collect all income due or payable and, in any
event, if
the Custodian receives a written notice from the Fund specifying
that an
amount of income should have been received by the Custodian
within the
last 90 days, the Custodian will provide a conditional payment
of income
within 60 days from the date the Custodian received such notice,
unless
the Custodian reasonably concludes that such income was not due
or payable
to the Fund, provided that the Custodian may reverse any such
conditional
payment upon its reasonably concluding that all or any portion
of such
income was not due or payable, and provided further that the
Custodian
shall not be liable for failing to collect on a timely basis the
full
amount of income due or payable in respect of a "floating rate
instrument"
or "variable rate instrument" (as such terms are defined under
Rule 2a-7
under the Investment Company Act of 1940, as amended) if it has
acted in
good faith, without negligence or willful misconduct.

(b) Present for payment and collect the amount payable
upon
such Securities which are called, but only if either (i) the
Custodian
receives a written notice of such call, or (ii) notice of such
call
appears in one or more of the publications listed in Appendix C
annexed
hereto, which may be amended at any time by the Custodian upon
five business days' prior notification to the Fund;

(d) Surrender Securities in temporary form for
definitive Securities;

(e) Execute, as Custodian, any necessary declarations
or
certificates of ownership under the Federal Income Tax Laws or
the laws or
regulations of any other taxing authority now or hereafter in
effect; and

(f) Hold directly, or through the Book-Entry System or
the
Depository with respect to Securities therein deposited, for the
account
of each Series all rights and similar securities issued with
respect to
any Securities held by the Custodian hereunder.

6. Upon receipt of a Certificate and not otherwise,
the
Custodian, directly or through the use of the Book-Entry System
or the Depository, shall:

(a) Execute and deliver to such persons as may be
designated
in such Certificate proxies, consents, authorizations, and any
other
instruments whereby the authority of the Fund as owner of any
Securities may be exercised;

(b) Deliver any Securities held for the Series in
exchange for
other Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation
or
recapitalization of any corporation, or the exercise of any
conversion privilege;

(c) Deliver any Securities held for the Series to any
protective committee, reorganization committee or other person
in
connection with the reorganization, refinancing, merger,
consolidation,
recapitalization or sale of assets of any corporation, and
receive and
hold under the terms of this Agreement such certificates of
deposit,
interim receipts or other instruments or documents as may be
issued to it to evidence such delivery;

(d) Make such transfers or exchanges of the assets of
the
Series and take such other steps as shall be stated in said
order to be
for the purpose of effectuating any duly authorized plan of
liquidation,
reorganization, merger, consolidation or recapitalization of the
Fund; and

(e) Present for payment and collect the amount payable
upon
Securities not described in preceding paragraph 5(b) of this
Article which
may be called as specified in the Certificate.

7. Notwithstanding any provision elsewhere contained
herein,
the Custodian shall not be required to obtain possession of any
instrument
or certificate representing any Futures Contract, Option or
Futures
Contract Option until after it shall have determined, or shall
have
received a Certificate from the Fund stating, that any such
instruments or
certificates are available. The Fund shall deliver to the
Custodian such
a Certificate no later than the business day preceding the
availability of
any such instrument or certificate. Prior to such availability,
the
Custodian shall comply with Section 17(f) of the Investment
Company Act of
1940, as amended, in connection with the purchase, sale,
settlement,
closing out or writing of Futures Contracts, Options or Futures
Contract
Options by making payments or deliveries specified in
Certificates
received by the Custodian in connection with any such purchase,
sale,
writing, settlement or closing out upon its receipt from a
broker, dealer
or futures commission merchant of a statement or confirmation
reasonably
believed by the Custodian to be in the form customarily used by
brokers,
dealers, or futures commission merchants with respect to such
Futures
Contracts, Options or Futures Contract Options, as the case may
be,
confirming that such Security is held by such broker, dealer or
futures
commission merchant, in book-entry form or otherwise, in the
name of the
Custodian (or any nominee of the Custodian) as custodian for the
Fund,
provided, however, that payments to or deliveries from the
Margin Account
shall be made in accordance with the terms and conditions of the
Margin
Account Agreement. Whenever any such instruments or
certificates are
available, the Custodian shall, notwithstanding any provision in
this
Agreement to the contrary, make payment for any Futures
Contract, Option
or Futures Contract Option for which such instruments or such
certificates
are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures
Contract, Option
or Futures Contract Option for which such instruments or such
certificates
are available only against receipt by the Custodian of payment
therefor.
Any such instrument or certificate delivered to the Custodian
shall be
held by the Custodian hereunder in accordance with, and subject
to, the
provisions of this Agreement.

ARTICLE IV

PURCHASE AND SALE OF INVESTMENTS OF THE FUND OTHER THAN OPTIONS,
FUTURES CONTRACTS, FUTURES CONTRACT OPTIONS AND REVERSE
REPURCHASE AGREEMENTS

1. Promptly after each purchase of Securities by the
Fund,
other than a purchase of any Option, Futures Contract, Futures
Contract
Option or Reverse Repurchase Agreement, the Fund shall deliver
to the
Custodian (i) with respect to each purchase of Securities which
are not
Money Market Securities, a Certificate, and (ii) with respect to
each
purchase of Money Market Securities, a Certificate, Oral
Instructions or
Written Instructions, specifying with respect to each such
purchase: (a)
the Series to which the Securities purchased are to be
specifically
allocated; (b) the name of the issuer and the title of the
Securities; (c)
the number of shares or the principal amount purchased and
accrued
interest, if any; (d) the date of purchase and settlement; (e)
the
purchase price per unit; (f) the total amount payable upon such
purchase;
(g) the name of the person from whom or the broker through whom
the
purchase was made, and the name of the clearing broker, if any;
and
(h) the name of the broker to which payment is to be made. The
Custodian
shall, upon receipt of Securities purchased by or for such
Series, pay out
of the moneys held for the account of such Series the total
amount payable
to the person from whom, or the broker through whom, the
purchase was
made, provided that the same conforms to the total amount
payable as set
forth in such Certificate, Oral Instructions or Written
Instructions.

2. Promptly after each sale of Securities by the Fund,
other
than a sale of any Option, Futures Contract, Futures Contract
Option or
Reverse Repurchase Agreement, the Fund shall deliver to the
Custodian (i)
with respect to each sale of Securities which are not Money
Market
Securities, a Certificate, and (ii) with respect to each sale of
Money
Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each such sale: (a)
the Series
to which such Securities sold were specifically allocated; (b)
the name of
the issuer and the title of the Security; (c) the number of
shares or
principal amount sold, and accrued interest, if any; (d) the
date of sale;
(e) the sale price per unit; (f) the total amount payable to
such Series
upon such sale; (g) the name of the broker through whom or the
person to
whom the sale was made, and the name of the clearing broker, if
any; and
(h) the name of the broker to whom the Securities are to be
delivered.
The Custodian shall deliver the Securities upon receipt of the
total
amount payable to the Fund for the account of such Series upon
such sale,
provided that the same conforms to the total amount payable as
set forth
in such Certificate, Oral Instructions or Written Instructions.
Subject
to the foregoing, the Custodian may accept payment in such form
as shall
be satisfactory to it, and may deliver Securities and arrange
for payment
in accordance with the customs prevailing among dealers in
Securities.

ARTICLE V

OPTIONS

1. Promptly after the purchase of any Option by the
Fund, the
Fund shall deliver to the Custodian a Certificate specifying
with respect
to each Option purchased: (a) the Series to which the Option
purchased is
to be specifically allocated; (b) the type of Option (put or
call);
(c) the name of the issuer and the title and number of shares
subject to
such Option or, in the case of a Stock Index Option, the stock
index to
which such Option relates and the number of Stock Index Options
purchased;
(d) the expiration date; (e) the exercise price; (f) the dates
of purchase
and settlement; (g) the total amount payable by the Fund for the
account
of such Series in connection with such purchase; (h) the name of
the
Clearing Member through which such Option was purchased; and (i)
the name
of the broker to whom payment is to be made. The Custodian
shall pay,
upon receipt of a Clearing Member's statement confirming the
purchase of
such Option held by such Clearing Member for the account of the
Custodian
(or any duly appointed and registered nominee of the Custodian)
as
custodian for the Fund, out of moneys held for the account of
such Series,
the total amount payable upon such purchase to the Clearing
Member through
whom the purchase was made, provided that the same conforms to
the total
amount payable as set forth in such Certificate.

2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the
Custodian a Certificate specifying with respect to each such
sale: (a)
the Series to which the Option sold was specifically allocated;
(b) the
type of Option (put or call); (c) the name of the issuer and the
title and
number of shares subject to such Option or, in the case of a
Stock Index
Option, the stock index to which such Option relates and the
number of
Stock Index Options sold; (d) the date of sale; (e) the sale
price;
(f) the date of settlement; (g) the total amount payable to the
Fund for
the account of such Series upon such sale; and (h) the name of
the
Clearing Member through which the sale was made. The Custodian
shall
consent to the delivery of the Option sold by the Clearing
Member which
previously supplied the confirmation described in preceding
paragraph 1 of
this Article with respect to such Option against payment to the
Custodian
of the total amount payable to the Fund for the account of such
Series,
provided that the same conforms to the total amount payable as
set forth
in such Certificate.

3. Promptly after the exercise by the Fund of any Call
Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund
shall
deliver to the Custodian a Certificate specifying with respect
to such
Call Option: (a) the Series to which the Call Option exercised
was
specifically allocated; (b) the name of the issuer and the title
and
number of shares subject to the Call Option; (c) the expiration
date;
(d) the date of exercise and settlement; (e) the exercise price
per share;
(f) the total amount to be paid by the Fund for the account of
such Series
upon such exercise; and (g) the name of the Clearing Member
through which
such Call Option was exercised. The Custodian shall, upon
receipt of the
Securities underlying the Call Option which was exercised, pay
out of the
moneys held for the account of such Series the total amount
payable to the
Clearing Member through whom the Call Option was exercised,
provided that
the same conforms to the total amount payable as set forth in
such
Certificate.

4. Promptly after the exercise by the Fund of any Put
Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund
shall
deliver to the Custodian a Certificate specifying with respect
to such Put
Option: (a) the Series to which the Put Option exercised was
specifically
allocated; (b) the name of the issuer and the title and number
of shares
subject to the Put Option; (c) the expiration date; (d) the date
of
exercise and settlement; (e) the exercise price per share; (f)
the total
amount to be paid to the Fund for the account of such Series
upon such
exercise; and (g) the name of the Clearing Member through which
such Put
Option was exercised. The Custodian shall, upon receipt of the
amount
payable upon the exercise of the Put Option, deliver or direct
the
Depository to deliver the Securities, provided the same conforms
to the
amount payable to the Fund for the account of such Series as set
forth in
such Certificate.

5. Promptly after the exercise by the Fund of any
Stock Index
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund
shall deliver to the Custodian a Certificate specifying with
respect to
such Stock Index Option: (a) the Series to which the Stock
Index Option
exercised was specifically allocated; (b) the type of Stock
Index Option
(put or call); (c) the number of Options being exercised; (d)
the stock
index to which such Option relates; (e) the expiration date; (f)
the
exercise price; (g) the total amount to be received by the Fund
for the
account of such Series in connection with such exercise; and (h)
the
Clearing Member from which such payment is to be received.

6. Whenever the Fund writes a Covered Call Option, the
Fund
shall promptly deliver to the Custodian a Certificate specifying
with
respect to such Covered Call Option: (a) the Series to which
the Covered
Call Option written is to be specifically allocated; (b) the
name of the
issuer and the title and number of shares for which the Covered
Call
Option was written and which underlie the same; (c) the
expiration date;
(d) the exercise price; (e) the premium to be received by the
Fund for the
account of such Series; (f) the date such Covered Call Option
was written;
and (g) the name of the Clearing Member through which the
premium is to be
received. The Custodian shall deliver or cause to be delivered,
in
exchange for receipt of the premium specified in the Certificate
with
respect to such Covered Call Option, such receipts as are
required in
accordance with the customs prevailing among Clearing Members
dealing in
Covered Call Options and shall impose, or direct the Depository
to impose,
upon the underlying Securities specified in the Certificate such
restrictions as may be required by such receipts.
Notwithstanding the
foregoing, the Custodian has the right, upon prior written
notification to
the Fund, at any time to refuse to issue any receipts for
Securities in
the possession of the Custodian and not deposited with the
Depository
underlying a Covered Call Option.

7. Whenever a Covered Call Option written by the Fund
and
described in the preceding paragraph of this Article is
exercised, the
Fund shall promptly deliver to the Custodian a Certificate
instructing the
Custodian to deliver, or to direct the Depository to deliver,
the
Securities subject to such Covered Call Option and specifying:
(a) the
Series to which the Covered Call Option exercised was
specifically
allocated; (b) the name of the issuer and the title and number
of shares
subject to the Covered Call Option; (c) the Clearing Member to
whom the
underlying Securities are to be delivered; and (d) the total
amount
payable to the Fund for the account of such Series upon such
delivery.
Upon the return and/or cancellation of any receipts delivered
pursuant to
paragraph 6 of this Article, the Custodian shall deliver, or
direct the
Depository to deliver, the underlying Securities as specified in
the
Certificate for the amount to be received as set forth in such
Certificate.

8. Whenever the Fund writes a Put Option, the Fund
shall
promptly deliver to the Custodian a Certificate specifying with
respect to
such Put Option: (a) the Series to which the Put Option written
is to be
specifically allocated; (b) the name of the issuer and the title
and
number of shares for which the Put Option is written and which
underlie
the same; (c) the expiration date; (d) the exercise price; (e)
the premium
to be received by the Fund for the account of such Series; (f)
the date
such Put Option is written; (g) the name of the Clearing Member
through
which the premium is to be received and to whom a Put Option
guarantee
letter is to be delivered; (h) the amount of cash, and/or the
amount and
kind of Securities, if any, to be deposited in the Segregated
Security
Account; and (i) the amount of cash and/or the amount and kind
of
Securities to be deposited into the Collateral Account. The
Custodian
shall, after making the deposits into the Collateral Account
specified in
the Certificate, issue a Put Option guarantee letter
substantially in the
form utilized by the Custodian on the date hereof, and deliver
the same to
the Clearing Member specified in the Certificate against receipt
of the
premium specified in said Certificate. Notwithstanding the
foregoing, the
Custodian shall be under no obligation to issue any Put Option
guarantee
letter or similar document if it is unable to make any of the
represen-
tations contained therein.

9. Whenever a Put Option written by the Fund and
described in
the preceding paragraph is exercised, the Fund shall promptly
deliver to
the Custodian a Certificate specifying: (a) the Series to which
the Put
Option exercised was specifically allocated; (b) the name of the
issuer
and title and number of shares subject to the Put Option; (c)
the Clearing
Member from which the underlying Securities are to be received;
(d) the
total amount payable by the Fund upon such delivery; (e) the
amount of
cash and/or the amount and kind of Securities to be withdrawn
from the
Collateral Account; and (f) the amount of cash and/or the amount
and kind
of Securities, if any, to be withdrawn from the Segregated
Security
Account. Upon the return and/or cancellation of any Put Option
guarantee
letter or similar document issued by the Custodian in connection
with such
Put Option, the Custodian shall pay out of the moneys held for
the account
of such Series the total amount payable to the Clearing Member
specified
in the Certificate as set forth in such Certificate, and shall
make the
withdrawals specified in such Certificate.

10. Whenever the Fund writes a Stock Index Option, the
Fund
shall promptly deliver to the Custodian a Certificate specifying
with
respect to such Stock Index Option: (a) the Series to which the
Stock
Index Option written is to be specifically allocated; (b)
whether such
Stock Index Option is a put or a call; (c) the number of Options
written;
(d) the stock index to which such Option relates; (e) the
expiration date;
(f) the exercise price; (g) the Clearing Member through which
such Option
was written; (h) the premium to be received by the Fund for the
account of
such Series; (i) the amount of cash and/or the amount and kind
of
Securities, if any, to be deposited in the Segregated Security
Account;
(j) the amount of cash and/or the amount and kind of Securities,
if any,
to be deposited in the Collateral Account; and (k) the amount of
cash
and/or the amount and kind of Securities, if any, to be
deposited in a
Margin Account, and the name in which such account is to be or
has been
established. The Custodian shall, upon receipt of the premium
specified
in the Certificate, make the deposits, if any, into the
Segregated
Security Account specified in the Certificate, and either (1)
deliver such
receipts, if any, which the Custodian has specifically agreed to
issue,
which are in accordance with the customs prevailing among
Clearing Members
in Stock Index Options and make the deposits into the Collateral
Account
specified in the Certificate, or (2) make the deposits into the
Margin
Account specified in the Certificate.

11. Whenever a Stock Index Option written by the Fund
and
described in the preceding paragraph of this Article is
exercised, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with
respect to such Stock Index Option: (a) the Series to which the
Stock
Index Option exercised was specifically allocated; (b) such
information as
may be necessary to identify the Stock Index Option being
exercised; (c)
the Clearing Member through which such Stock Index Option is
being
exercised; (d) the total amount payable upon such exercise, and
whether
such amount is to be paid by or to the Fund for the account of
such
Series; (e) the amount of cash and/or amount and kind of
Securities, if
any, to be withdrawn from the Margin Account; and (f) the amount
of cash
and/or amount and kind of Securities, if any, to be withdrawn
from the
Segregated Security Account and the amount of cash and/or the
amount and
kind of Securities, if any, to be withdrawn from the Collateral
Account.
Upon the return and/or cancellation of the receipt, if any,
delivered
pursuant to the preceding paragraph of this Article, the
Custodian shall
pay to the Clearing Member specified in the Certificate the
total amount
payable, if any, as specified therein.

12. Whenever the Fund purchases any Option identical
to a
previously written Option described in paragraphs 6, 8 or 10 of
this
Article in a transaction expressly designated as a "Closing
Purchase
Transaction" in order to liquidate its position as a writer of
an Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying
with respect to the Option being purchased: (a) the Series to
which the
Option purchased is to be specifically allocated; (b) that the
transaction
is a Closing Purchase Transaction; (c) the name of the issuer
and the
title and number of shares subject to the Option, or, in the
case of a
Stock Index Option, the stock index to which such Option relates
and the
number of Options held; (d) the exercise price; (e) the premium
to be paid
by the Fund for the account of such Series; (f) the expiration
date; (g)
the type of Option (put or call); (h) the date of such purchase;
(i) the
name of the Clearing Member to which the premium is to be paid;
and (j)
the amount of cash and/or the amount and kind of Securities, if
any, to be
withdrawn from the Collateral Account, a specified Margin
Account or the
Segregated Security Account. Upon the Custodian's payment of
the premium
and the return and/or cancellation of any receipt issued
pursuant to para-
graphs 6, 8 or 10 of this Article with respect to the Option
being
liquidated through the Closing Purchase Transaction, the
Custodian shall
remove, or direct the Depository to remove, the previously
imposed
restrictions on the Securities underlying the Call Option.

13. Upon the expiration or exercise of, or
consummation of a
Closing Purchase Transaction with respect to, any Option
purchased or
written by the Fund and described in this Article, the Custodian
shall
delete such Option from the statements delivered to the Fund for
the
account of a Series pursuant to paragraph 3 of Article III
herein, and
upon the return and/or cancellation of any receipts issued by
the
Custodian, shall make such withdrawals from the Collateral
Account, the
Margin Account and/or the Segregated Security Account as may be
specified
in a Certificate received in connection with such expiration,
exercise, or
consummation.

ARTICLE VI

FUTURES CONTRACTS

1. Whenever the Fund shall enter into a Futures
Contract, the
Fund shall deliver to the Custodian a Certificate specifying
with respect
to such Futures Contract (or with respect to any number of
identical
Futures Contract(s)): (a) the Series to which the Futures
Contract
entered into is to be specifically allocated; (b) the category
of Futures
Contract (the name of the underlying stock index or financial
instrument);
(c) the number of identical Futures Contracts entered into; (d)
the
delivery or settlement date of the Futures Contract(s); (e) the
date the
Futures Contract(s) was (were) entered into and the maturity
date; (f)
whether the Fund is buying (going long) or selling (going short)
on such
Futures Contract(s); (g) the amount of cash and/or the amount
and kind of
Securities, if any, to be deposited in the Segregated Security
Account;
(h) the name of the broker, dealer or futures commission
merchant through
which the Futures Contract was entered into; and (i) the amount
of fee or
commission, if any, to be paid and the name of the broker,
dealer or
futures commission merchant to whom such amount is to be paid.
The
Custodian shall make the deposits, if any, to the Margin Account
in
accordance with the terms and conditions of the Margin Account
Agreement.
The Custodian shall make payment of the fee or commission, if
any,
specified in the Certificate and deposit in the Segregated
Security
Account the amount of cash and/or the amount and kind of
Securities
specified in said Certificate.

2. (a) Any variation margin payment or similar
payment
required to be made by the Fund for the account of a Series to a
broker,
dealer or futures commission merchant with respect to an
outstanding
Futures Contract shall be made by the Custodian in accordance
with the
terms and conditions of the Margin Account Agreement.

(b) Any variation margin payment or similar
payment from a
broker, dealer or futures commission merchant to the Fund with
respect to
an outstanding Futures Contract shall be received and dealt with
by the
Custodian in accordance with the terms and conditions of the
Margin
Account Agreement.

3. Whenever a Futures Contract held by the Custodian
hereunder
is retained by the Fund until delivery or settlement is made on
such
Futures Contract, the Fund shall deliver to the Custodian a
Certificate
specifying: (a) the Series to which the Futures Contract
retained is to
be specifically allocated; (b) the Futures Contract; (c) with
respect to a
Stock Index Futures Contract, the total cash settlement amount
to be paid
or received, and with respect to a Financial Futures Contract,
the
Securities and/or amount of cash to be delivered or received;
(d) the
broker, dealer or futures commission merchant to or from which
payment or
delivery is to be made or received; and (e) the amount of cash
and/or
Securities to be withdrawn from the Segregated Security Account.

The
Custodian shall make the payment or delivery specified in the
Certificate
and delete such Futures Contract from the statements delivered
to the Fund
pursuant to paragraph 3 of Article III herein.

4. Whenever the Fund shall enter into a Futures
Contract to
offset a Futures Contract held by the Custodian hereunder, the
Fund shall
deliver to the Custodian a Certificate specifying: (a) the
Series to
which the offsetting Futures Contract is to be specifically
allocated; (b)
the items of information required in a Certificate described in
para-
graph 1 of this Article, and (c) the Futures Contract being
offset. The
Custodian shall make payment of the fee or commission, if any,
specified
in the Certificate and delete the Futures Contract being offset
from the
statements delivered to the Fund for the account of such Series
pursuant
to paragraph 3 of Article III herein, and make such withdrawals
from the
Segregated Security Account as may be specified in such
Certificate. The
withdrawals, if any, to be made from the Margin Account shall be
made by
the Custodian in accordance with the terms and conditions of the
Margin
Account Agreement.

ARTICLE VII

FUTURES CONTRACT OPTIONS

1. Promptly after the purchase of any Futures Contract
Option
by the Fund, the Fund shall deliver to the Custodian a
Certificate
specifying with respect to such Futures Contract Option: (a)
the Series
to which the Futures Contract Option purchased is to be
specifically
allocated; (b) the type of Futures Contract Option (put or
call); (c) the
type of Futures Contract and such other information as may be
necessary to
identify the Futures Contract underlying the Futures Contract
Option
purchased; (d) the expiration date; (e) the exercise price; (f)
the dates
of purchase and settlement; (g) the amount of premium to be paid
by the
Fund for the account of such Series upon such purchase; (h) the
name of
the broker or futures commission merchant through which such
option was
purchased; and (i) the name of the broker or futures commission
merchant
to whom payment is to be made. The Custodian shall pay the
total amount
to be paid upon such purchase to the broker or futures
commission merchant
through whom the purchase was made, provided that the same
conforms to the
amount set forth in such Certificate.

2. Promptly after the sale of any Futures Contract
Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund
shall
promptly deliver to the Custodian a Certificate specifying with
respect to
each such sale: (a) the Series to which the Futures Contract
Option sold
was specifically allocated; (b) the type of Futures Contract
Option (put
or call); (c) the type of Futures Contract and such other
information as
may be necessary to identify the Futures Contract underlying the
Futures
Contract Option; (d) the date of sale; (e) the sale price; (f)
the date of
settlement; (g) the total amount payable to the Fund for the
account of
such Series upon such sale; and (h) the name of the broker or
futures
commission merchant through which the sale was made. The
Custodian shall
consent to the cancellation of the Futures Contract Option being
closed
against payment to the Custodian of the total amount payable to
the Fund
for the account of such Series, provided the same conforms to
the total
amount payable as set forth in such Certificate.

3. Whenever a Futures Contract Option purchased by the
Fund
pursuant to paragraph 1 is exercised by the Fund, the Fund shall
promptly
deliver to the Custodian a Certificate specifying: (a) the
Series to which
the Futures Contract Option exercised was specifically
allocated; (b) the
particular Futures Contract Option (put or call) being
exercised; (c) the
type of Futures Contract underlying the Futures Contract Option;
(d) the
date of exercise; (e) the name of the broker or futures
commission
merchant through which the Futures Contract Option is exercised;
(f) the
net total amount, if any, payable by the Fund; (g) the amount,
if any, to
be received by the Fund for the account of such Series; and (h)
the amount
of cash and/or the amount and kind of Securities to be deposited
in the
Segregated Security Account. The Custodian shall make the
payments, if
any, and the deposits, if any, into the Segregated Security
Account as
specified in the Certificate. The deposits, if any, to be made
to the
Margin Account shall be made by the Custodian in accordance with
the terms
and conditions of the Margin Account Agreement.

4. Whenever the Fund writes a Futures Contract Option,
the
Fund shall promptly deliver to the Custodian a Certificate
specifying with
respect to such Futures Contract Option: (a) the Series to
which the
Futures Contract Option written is to be specifically allocated;
(b) the
type of Futures Contract Option (put or call); (c) the type of
Futures
Contract and such other information as may be necessary to
identify the
Futures Contract underlying the Futures Contract Option; (d) the
expiration date; (e) the exercise price; (f) the premium to be
received by
the Fund for the account of such Series; (g) the name of the
broker or
futures commission merchant through which the premium is to be
received;
and (h) the amount of cash and/or the amount and kind of
Securities, if
any, to be deposited in the Segregated Security Account. The
Custodian
shall, upon receipt of the premium specified in the Certificate,
make the
deposits into the Segregated Security Account, if any, as
specified in the
Certificate. The deposits, if any, to be made to the Margin
Account shall
be made by the Custodian in accordance with the terms and
conditions of
the Margin Account Agreement.

5. Whenever a Futures Contract Option written by the
Fund
which is a call is exercised, the Fund shall promptly deliver to
the
Custodian a Certificate specifying: (a) the Series to which the
Futures
Contract Option exercised was specifically allocated; (b) the
particular
Futures Contract Option exercised; (c) the type of Futures
Contract
underlying the Futures Contract Option; (d) the name of the
broker or
futures commission merchant through which such Futures Contract
Option was
exercised; (e) the net total amount, if any, payable to the Fund
for the
account of such Series upon such exercise; (f) the net total
amount, if
any, payable by the Fund for the account of such Series upon
such
exercise; and (g) the amount of cash and/or the amount and kind
of
Securities to be deposited in the Segregated Security Account.
The
Custodian shall, upon its receipt of the net total amount
payable to the
Fund for the account of such Series, if any, specified in such
Certificate
make the payments, if any, and the deposits, if any, into the
Segregated
Security Account as specified in the Certificate. The deposits,
if any,
to be made to the Margin Account shall be made by the Custodian
in
accordance with the terms and conditions of the Margin Account
Agreement.

6. Whenever a Futures Contract Option which is written
by the
Fund and which is a Put Option is exercised, the Fund shall
promptly
deliver to the Custodian a Certificate specifying: (a) the
Series to
which the Futures Contract Option exercised was specifically
allocated;
(b) the particular Futures Contract Option exercised; (c) the
type of
Futures Contract underlying such Futures Contract Option; (d)
the name of
the broker or futures commission merchant through which such
Futures
Contract Option is exercised; (e) the net total amount, if any,
payable to
the Fund for the account of such Series upon such exercise; (f)
the net
total amount, if any, payable by the Fund for the account of
such Series
upon such exercise; and (g) the amount and kind of Securities
and/or cash
to be withdrawn from or deposited in the Segregated Security
Account, if
any. The Custodian shall, upon its receipt of the net total
amount
payable to the Fund for the account of such Series, if any,
specified in
the Certificate, make the payments, if any, and the deposits, if
any, into
the Segregated Security Account as specified in the Certificate.

The
deposits to and/or withdrawals from the Margin Account, if any,
shall be
made by the Custodian in accordance with the terms and
conditions of the
Margin Account Agreement.

7. Whenever the Fund purchases any Futures Contract
Option
identical to a previously written Futures Contract Option
described in
this Article in order to liquidate its position as a writer of
such
Futures Contract Option, the Fund shall promptly deliver to the
Custodian
a Certificate specifying with respect to the Futures Contract
Option being
purchased: (a) the Series to which the Futures Contract Option
purchased
is to be specifically allocated; (b) that the transaction is a
closing
transaction; (c) the type of Futures Contract and such other
information
as may be necessary to identify the Futures Contract underlying
the
Futures Contract Option; (d) the exercise price; (e) the premium
to be
paid by the Fund for the account of such Series; (f) the
expiration date;
(g) the name of the broker or futures commission merchant to
which the
premium is to be paid; and (h) the amount of cash and/or the
amount and
kind of Securities, if any, to be withdrawn from the Segregated
Security
Account. The Custodian shall effect the withdrawals from the
Segregated
Security Account specified in the Certificate. The withdrawals,
if any,
to be made from the Margin Account shall be made by the
Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.

8. Upon the expiration or exercise of, or consummation
of a
closing transaction with respect to, any Futures Contract Option
written
or purchased by the Fund and described in this Article, the
Custodian
shall (a) delete such Futures Contract Option from the
statements
delivered to the Fund pursuant to paragraph 3 of Article III
herein, and
(b) make such withdrawals from, and/or, in the case of an
exercise, such
deposits into, the Segregated Security Account as may be
specified in a
Certificate. The deposits to and/or withdrawals from the Margin
Account,
if any, shall be made by the Custodian in accordance with the
terms and
conditions of the Margin Account Agreement.

9. Futures Contracts acquired by the Fund through the
exercise
of a Futures Contract Option described in this Article shall be
subject to
Article VI hereof.

ARTICLE VIII

SHORT SALES

1. Promptly after any short sale, the Fund shall
deliver to
the Custodian a Certificate specifying: (a) the Series to which
the short
sale is to be specifically allocated; (b) the name of the issuer
and the
title of the Security; (c) the number of shares or principal
amount sold,
and accrued interest or dividends, if any; (d) the dates of the
sale and
settlement; (e) the sale price per unit; (f) the total amount
credited to
the Fund for the account of such Series upon such sales, if any;
(g) the
amount of cash and/or the amount and kind of Securities, if any,
which are
to be deposited in a Margin Account and the name in which such
Margin
Account has been or is to be established; (h) the amount of cash
and/or
the amount and kind of Securities, if any, to be deposited in a
Segregated
Security Account; and (i) the name of the broker through which
such short
sale was made. The Custodian shall upon its receipt of a
statement from
such broker confirming such sale and that the total amount
credited to the
Fund upon such sale, if any, as specified in the Certificate is
held by
such broker for the account of the Custodian (or any nominee of
the
Custodian) as custodian of the Fund, issue a receipt or make the
deposits
into the Margin Account and the Segregated Security Account
specified in
the Certificate.

2. In connection with the closing-out of any short
sale, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with
respect to each such closing-out: (a) the Series to which the
short sale
being closed-out was specifically allocated; (b) the name of the
issuer
and the title of the Security; (c) the number of shares or the
principal
amount, and accrued interest or dividends, if any, required to
effect such
closing-out to be delivered to the broker; (d) the dates of the
closing-
out and settlement; (e) the purchase price per unit; (f) the net
total
amount payable to the Fund for the account of such Series upon
such
closing-out; (g) the net total amount payable to the broker upon
such
closing-out; (h) the amount of cash and the amount and kind of
Securities
to be withdrawn, if any, from the Margin Account; (i) the amount
of cash
and/or the amount and kind of Securities, if any, to be
withdrawn from the
Segregated Security Account; and (j) the name of the broker
through which
the Fund is effecting such closing-out. The Custodian shall,
upon receipt
of the net total amount payable to the Fund for the account of
such Series
upon such closing-out and the return and/or cancellation of the
receipts,
if any, issued by the custodian with respect to the short sale
being
closed-out, pay out of the moneys held for the account of the
Series to
the broker the net total amount payable to the broker, and make
the
withdrawals from the Margin Account and the Segregated Security
Account,
as the same are specified in the Certificate.

ARTICLE IX

REVERSE REPURCHASE AGREEMENTS

1. Promptly after the Fund, on behalf of a Series,
enters into
a Reverse Repurchase Agreement with respect to Securities and
money held
by the Custodian hereunder, the Fund shall deliver to the
Custodian a
Certificate or in the event such Reverse Repurchase Agreement is
a Money
Market Security, a Certificate, Oral Instructions or Written
Instructions
specifying: (a) the Series to which the Reverse Repurchase
Agreement is
to be specifically allocated; (b) the total amount payable to
the Fund for
the account of such Series in connection with such Reverse
Repurchase
Agreement; (c) the broker or dealer through or with which the
Reverse
Repurchase Agreement is entered; (d) the amount and kind of
Securities to
be delivered by the Fund to such broker or dealer; (e) the date
of such
Reverse Repurchase Agreement; and (f) the amount of cash and/or
the amount
and kind of Securities, if any, to be deposited in a Segregated
Security
Account in connection with such Reverse Repurchase Agreement.
The
Custodian shall, upon receipt of the total amount payable to the
Fund
specified in the Certificate, Oral Instructions or Written
Instructions
make the delivery to the broker or dealer, and the deposits, if
any, to
the Segregated Security Account, specified in such Certificate,
Oral
Instructions or Written Instructions.

2. Upon the termination of a Reverse Repurchase
Agreement
described in paragraph 1 of this Article, the Fund shall
promptly deliver
a Certificate or, in the event such Reverse Repurchase Agreement
is a
Money Market Security, a Certificate, Oral Instructions or
Written
Instructions to the Custodian specifying: (a) the Series to
which the
Reverse Repurchase Agreement terminated was specifically
allocated; (b)
the Reverse Repurchase Agreement being terminated; (c) the total
amount
payable by the Fund for the account of such Series in connection
with such
termination; (d) the amount and kind of Securities to be
received by the
Fund for the account of such Series in connection with such
termination;
(e) the date of termination; (f) the name of the broker or
dealer with or
through which the Reverse Repurchase Agreement is to be
terminated; and
(g) the amount of cash and/or the amount and kind of Securities
to be
withdrawn from the Segregated Security Account. The Custodian
shall, upon
receipt of the amount and kind of Securities to be received by
the Fund
specified in the Certificate, Oral Instructions or Written
Instructions,
make the payment to the broker or dealer, and the withdrawals,
if any,
from the Segregated Security Account, specified in such
Certificate, Oral
Instructions or Written Instructions.

ARTICLE X

CONCERNING MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS

1. The Custodian shall, from time to time, make such
deposits
to, or withdrawals from, a Segregated Security Account as
specified in a
Certificate received by the Custodian. Such Certificate shall
specify the
amount of cash and/or the amount and kind of Securities to be
deposited
in, or withdrawn from, the Segregated Security Account. In the
event that
the Fund fails to specify in a Certificate the designated
Series, the name
of the issuer, the title and the number of shares or the
principal amount
of any particular Securities to be deposited by the Custodian
into, or
withdrawn from, a Segregated Securities Account, the Custodian
shall be
under no obligation to make any such deposit or withdrawal and
shall so
notify the Fund.

2. The Custodian shall make deliveries or payments
from a
Margin Account to the broker, dealer, futures commission
merchant or
Clearing Member in whose name, or for whose benefit, the account
was
established as specified in the Margin Account Agreement.

3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account
shall be dealt with in accordance with the terms and conditions
of the
Margin Account Agreement.

4. The Custodian shall have a continuing lien and
security
interest in and to any property at any time held by the
Custodian in any
Collateral Account described herein. In accordance with
applicable law,
the Custodian may enforce its lien and realize on any such
property
whenever the Custodian has made payment or delivery pursuant to
any Put
Option guarantee letter or similar document or any receipt
issued
hereunder by the Custodian. In the event the Custodian should
realize on
any such property net proceeds which are less than the
Custodian's
obligations under any Put Option guarantee letter or similar
document or
any receipt, such deficiency shall be a debt owed the Custodian
by the
Fund within the scope of Article XIII herein.

5. On each business day, the Custodian shall furnish
the Fund
with respect to each Series a statement with respect to each
Margin
Account in which money or Securities are held specifying as of
the close
of business on the previous business day: (a) the name of the
Margin
Account; (b) the amount and kind of Securities held therein; and
(c) the
amount of money held therein. The Custodian shall make
available upon
request to any broker, dealer or futures commission merchant
specified in
the name of a Margin Account a copy of the statement furnished
the Fund
with respect to such Margin Account.

6. Promptly after the close of business on each
business day
in which cash and/or Securities are maintained in a Collateral
Account,
the Custodian shall furnish the Fund with a Statement with
respect to such
Collateral Account specifying the amount of cash and/or the
amount and
kind of Securities held therein. No later than the close of
business next
succeeding the delivery to the Fund of such statement, the Fund
shall
furnish to the Custodian a Certificate or Written Instructions
specifying
the then market value of the securities described in such
statement. In
the event such then market value is indicated to be less than
the
Custodian's obligation with respect to any outstanding Put
Option,
guarantee letter or similar document, the Fund shall promptly
specify in a
Certificate the additional cash and/or Securities to be
deposited in such
Collateral Account to eliminate such deficiency.

ARTICLE XI

PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

1. For each Series, the Fund shall furnish to the
Custodian a
copy of the resolution of the Fund's Board, certified by the
Secretary or
any Assistant Secretary, either (i) setting forth the date of
the
declaration of a dividend or distribution, the date of payment
thereof,
the record date as of which shareholders entitled to payment
shall be
determined, the amount payable per share to the shareholders of
record as
of that date and the total amount payable to the Dividend Agent
of the
Fund on the payment date, or (ii) authorizing the declaration of
dividends
and distributions on a daily basis and authorizing the Custodian
to rely
on Oral Instructions, Written Instructions or a Certificate
setting forth
the date of the declaration of such dividend or distribution,
the date of
payment thereof, the record date as of which shareholders
entitled to
payment shall be determined, the amount payable per share to the
shareholders of record as of that date and the total amount
payable to the
Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution,
Oral
Instructions, Written Instructions or Certificate, as the case
may be, the
Custodian shall pay out of the moneys held for the account of
the Series
the total amount payable to the Dividend Agent of the Fund.

ARTICLE XII

SALE AND REDEMPTION OF SHARES

1. Whenever the Fund shall sell any Series' Shares,
the Fund
shall deliver to the Custodian a Certificate duly specifying:

(a) The number of Shares sold, trade date, and price;
and

(b) The amount of money to be received by the
Custodian for
the sale of such Shares.

2. Upon receipt of such money from the Transfer Agent,
the
Custodian shall credit such money to the account of such Series.

3. Upon issuance of any Series' Shares in accordance
with the
foregoing provisions of this Article, the Custodian shall pay,
out of the
money held for the account of such Series, all original issue or
other
taxes required to be paid by the Fund for the account of such
Series in
connection with such issuance upon the receipt of a Certificate
specifying
the amount to be paid.

4. Except as provided hereinafter, whenever the Fund
shall
hereafter redeem any Series' Shares, the Fund shall furnish to
the
Custodian a Certificate specifying:

(a) The number of Shares redeemed; and

(b) The amount to be paid for the Shares redeemed.

5. Upon receipt from the Transfer Agent of an advice
setting
forth the number of a Series' Shares received by the Transfer
Agent for
redemption and that such Shares are valid and in good form for
redemption,
the Custodian shall make payment to the Transfer Agent out of
the moneys
held for the account of such Series of the total amount
specified in the
Certificate issued pursuant to the foregoing paragraph 4 of this
Article.

6. Notwithstanding the above provisions regarding the
redemption of any of Series' Shares, whenever a Series' Shares
are
redeemed pursuant to any check redemption privilege which may
from time to
time be offered by the Fund, the Custodian, unless otherwise
instructed by
a Certificate, shall, upon receipt of an advice from the Fund or
its agent
setting forth that the redemption is in good form for redemption
in
accordance with the check redemption procedure, honor the check
presented
as part of such check redemption privilege out of the money held
in the
account of the Fund for such purposes.

ARTICLE XIII

OVERDRAFTS OR INDEBTEDNESS

1. If the Custodian should in its sole discretion
advance
funds on behalf of a Series which results in an overdraft
because the
moneys held by the Custodian for the account of such Series
shall be
insufficient to pay the total amount payable upon a purchase of
Securities
as set forth in a Certificate or Oral Instructions issued
pursuant to
Article IV, or which results in an overdraft in the account for
such
Series for some other reason, or if a Series is for any other
reason
indebted to the Custodian (except a borrowing for investment or
for
temporary or emergency purposes using Securities as collateral
pursuant to
a separate agreement and subject to the provisions of paragraph
2 of this
Article XIII), such overdraft or indebtedness shall be deemed to
be a loan
made by the Custodian to such Series payable on demand and shall
bear
interest from the date incurred at a rate per annum (based on a
360-day
year for the actual number of days involved) equal to the
Federal Funds
Rate plus l/2%, such rate to be adjusted on the effective date
of any
change in such Federal Funds Rate but in no event to be less
than 6% per
annum, except that any overdraft resulting from an error by the
Custodian
shall bear no interest. Any such overdraft or indebtedness
shall be
reduced by an amount equal to the total of all amounts due such
Series
which have not been collected by the Custodian on behalf of such
Series
when due because of the failure of the Custodian to make timely
demand or
presentment for payment. In addition, the Fund hereby agrees
that the
Custodian shall have a continuing lien and security interest in
and to any
property at any time held by it for the benefit of such Series
or in which
such Series may have an interest which is then in the
Custodian's
possession or control or in possession or control of any third
party
acting in the Custodian's behalf. The Fund authorizes the
Custodian, in
its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any
balance of
account standing to such Series' credit on the Custodian's
books. For
purposes of this Section 1 of Article XIII, "overdraft" shall
mean a
negative Available Balance.

2. The Fund will cause to be delivered to the
Custodian by any
bank (including, if the borrowing is pursuant to a separate
agreement, the
Custodian) from which it borrows money for investment or for
temporary or
emergency purposes using Securities in a Series' portfolio as
collateral
for such borrowings, a notice or undertaking in the form
currently
employed by any such bank setting forth the amount which such
bank will
loan to the Fund against delivery of a stated amount of
collateral. The
Fund shall promptly deliver to the Custodian a Certificate
specifying with
respect to each such borrowing: (a) the Series to which the
borrowing
relates; (b) the name of the bank; (c) the amount and terms of
the
borrowing, which may be set forth by incorporating by reference
an
attached promissory note, duly endorsed by the Fund, or other
loan
agreement; (d) the time and date, if known, on which the loan is
to be
entered into; (e) the date on which the loan becomes due and
payable; (f)
the total amount payable to the Fund for the account of such
Series on the
borrowing date; (g) the market value of Securities to be
delivered as
collateral for such loan, including the name of the issuer, the
title and
the number of shares or the principal amount of any particular
Securities;
and (h) a statement specifying whether such loan is for
investment
purposes or for temporary or emergency purposes and that such
loan is in
conformance with the Investment Company Act of 1940, as amended,
and the
Fund's prospectus. The Custodian shall deliver on the borrowing
date
specified in a Certificate the specified collateral and the
executed
promissory note, if any, against delivery by the lending bank of
the total
amount of the loan payable, provided that the same conforms to
the total
amount payable as set forth in the Certificate. The Custodian
may, at the
option of the lending bank, keep such collateral in its
possession, but
such collateral shall be subject to all rights therein given the
lending
bank by virtue of any promissory note or loan agreement. The
Custodian
shall deliver such Securities as additional collateral as may be
specified
in a Certificate to collateralize further any transaction
described in
this paragraph. The Fund shall cause all Securities released
from
collateral status to be returned directly to the Custodian, and
the
Custodian shall receive from time to time such return of
collateral as may
be tendered to it. In the event that the Fund fails to specify
in a
Certificate the Series, the name of the issuer, the title and
number of
shares or the principal amount of any particular Securities to
be
delivered as collateral by the Custodian, the Custodian shall
not be under
any obligation to deliver any Securities.

ARTICLE XIV

LOAN OF PORTFOLIO SECURITIES OF THE FUND

1. If the Fund is permitted by the terms of its
organization
documents and as disclosed in its most recent and currently
effective
prospectus to lend the portfolio Securities of a Series, within
24 hours
after each loan of portfolio Securities the Fund shall deliver
or cause to
be delivered to the Custodian a Certificate specifying with
respect to
each such loan: (a) the Series to which the Securities to be
loaned are
specifically allocated; (b) the name of the issuer and the title
of the
Securities; (c) the number of shares or the principal amount
loaned; (d)
the date of loan and delivery; (e) the total amount to be
delivered to the
Custodian against the loan of the Securities, including the
amount of cash
collateral and the premium, if any, separately identified; and
(f) the
name of the broker, dealer or financial institution to which the
loan was
made. The Custodian shall deliver the Securities thus
designated to the
broker, dealer or financial institution to which the loan was
made upon
receipt of the total amount designated as to be delivered
against the loan
of Securities. The Custodian may accept payment in connection
with a
delivery otherwise than through the Book-Entry System or
Depository only
in the form of a certified or bank cashier's check payable to
the order of
the Fund or the Custodian drawn on New York Clearing House funds
and may
deliver Securities in accordance with the customs prevailing
among dealers
in securities.

2. Promptly after each termination of the loan of
Securities
by the Fund, the Fund shall deliver or cause to be delivered to
the
Custodian a Certificate specifying with respect to each such
loan
termination and return of Securities: (a) the Series to which
the
Securities to be returned are specifically allocated; (b) the
name of the
issuer and the title of the Securities to be returned; (c) the
number of
shares or the principal amount to be returned; (d) the date of
termination; (e) the total amount to be delivered by the
Custodian
(including the cash collateral for such Securities minus any
offsetting
credits as described in said Certificate); and (f) the name of
the broker,
dealer or financial institution from which the Securities will
be
returned. The Custodian shall receive all Securities returned
from the
broker, dealer, or financial institution to which such
Securities were
loaned and upon receipt thereof shall pay, out of the moneys
held for the
account of the Series specified in the Certificate, the total
amount
payable upon such return of Securities as set forth in the
Certificate.

ARTICLE XV

DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES

1. The Custodian is authorized and instructed to
employ, as
sub-custodian for each Series' Foreign Securities (as such term
is defined
in paragraph (c)(1) of Rule 17f-5 under the Investment Company
Act of
1940, as amended) and other assets, the foreign banking
institutions and
foreign securities depositories and clearing agencies designated
on
Schedule I hereto ("Foreign Sub-Custodians") to carry out their
respective
responsibilities in accordance with the terms of the
sub-custodian
agreement between each such Foreign Sub-Custodian and the
Custodian,
copies of which have been previously delivered to the Fund and
receipt of
which is hereby acknowledged (each such agreement, a "Foreign
Sub-
Custodian Agreement"). Upon receipt of a Certificate, together
with a
certified resolution substantially in the form attached as
Exhibit E of
the Fund's Board, the Fund may designate any additional foreign
sub-
custodian with which the Custodian has an agreement for such
entity to act
as the Custodian's agent, as its sub-custodian and any such
additional
foreign sub-custodian shall be deemed added to Schedule I. Upon
receipt
of a Certificate from the Fund, the Custodian shall cease the
employment
of any one or more Foreign Sub-Custodians for maintaining
custody of the
Fund's assets and such Foreign Sub-Custodian shall be deemed
deleted from
Schedule I.

2. Each Foreign Sub-Custodian Agreement shall be
substantially in the form previously delivered to the Fund and
will not be
amended in a way that materially adversely affects a Series
without the
Fund's prior written consent.

3. The Custodian shall identify on its books as
belonging to
each Series of the Fund the Foreign Securities of such Series
held by each
Foreign Sub-Custodian. At the election of the Fund, it shall be
entitled
to be subrogated to the rights of the Custodian with respect to
any claims
by the Fund or any Series against a Foreign Sub-Custodian as a
consequence
of any loss, damage, cost, expense, liability or claim sustained
or
incurred by the Fund or any Series if and to the extent that the
Fund or
such Series has not been made whole for any such loss, damage,
cost,
expense, liability or claim.

4. Upon request of the Fund, the Custodian will,
consistent
with the terms of the applicable Foreign Sub-Custodian
Agreement, use
reasonable efforts to arrange for the independent accountants of
the Fund
to be afforded access to the books and records of any Foreign
Sub-
Custodian insofar as such books and records relate to the
performance of
such Foreign Sub-Custodian under its agreement with the
Custodian on
behalf of the Fund.

5. The Custodian will supply to the Fund from time to
time,
as mutually agreed upon, statements in respect of the securities
and other
assets of each Series held by Foreign Sub-Custodians, including,
but not
limited to, an identification of entities having possession of
each
Series' Foreign Securities and other assets, and advices or
notifications
of any transfers of Foreign Securities to or from each custodial
account
maintained by a Foreign Sub-Custodian for the Custodian on
behalf of the
Series.

6. The Custodian shall furnish annually to the Fund,
as
mutually agreed upon, information concerning the Foreign
Sub-Custodians
employed by the Custodian. Such information shall be similar in
kind and
scope to that furnished to the Fund in connection with the
Fund's initial
approval of such Foreign Sub-Custodians and, in any event, shall
include
information pertaining to (i) the Foreign Custodians' financial
strength,
general reputation and standing in the countries in which they
are located
and their ability to provide the custodial services required,
and (ii)
whether the Foreign Sub-Custodians would provide a level of
safeguards for
safekeeping and custody of securities not materially different
form those
prevailing in the United States. The Custodian shall monitor
the general
operating performance of each Foreign Sub-Custodian, and at
least annually
obtain and review the annual financial report published by such
Foreign
Sub-Custodian to determine that it meets the financial criteria
of an
"Eligible Foreign Custodian" under Rule 17f-5(c)(2)(i) or (ii).
The
Custodian will promptly inform the Fund in the event that the
Custodian
learns that a Foreign Sub-Custodian no longer satisfies the
financial
criteria of an "Eligible Foreign Custodian" under such Rule.
The
Custodian agrees that it will use reasonable care in monitoring
compliance
by each Foreign Sub-Custodian with the terms of the relevant
Foreign Sub-
Custodian Agreement and that if it learns of any breach of such
Foreign
Sub-Custodian Agreement believed by the Custodian to have a
material
adverse effect on the Fund or any Series it will promptly notify
the Fund
of such breach. The Custodian also agrees to use reasonable and
diligent
efforts to enforce its rights under the relevant Foreign
Sub-Custodian
Agreement.

7. The Custodian shall transmit promptly to the Fund
all
notices, reports or other written information received
pertaining to the
Fund's Foreign Securities, including without limitation, notices
of
corporate action, proxies and proxy solicitation materials.

8. Notwithstanding any provision of this Agreement to
the
contrary, settlement and payment for securities received for the
account
of any Series and delivery of securities maintained for the
account of
such Series may be effected in accordance with the customary or
established securities trading or securities processing
practices and
procedures in the jurisdiction or market in which the
transaction occurs,
including, without limitation, delivery of securities to the
purchaser
thereof or to a dealer therefor (or an agent for such purchaser
or dealer)
against a receipt with the expectation of receiving later
payment for such
securities from such purchaser or dealer.

9. Notwithstanding any other provision in this
Agreement to
the contrary, with respect to any losses or damages arising out
of or
relating to any actions or omissions of any Foreign
Sub-Custodian the sole
responsibility and liability of the Custodian shall be to take
appropriate
action at the Fund's expense to recover such loss or damage from
the
Foreign Sub-Custodian. It is expressly understood and agreed
that the
Custodian's sole responsibility and liability shall be limited
to amounts
so recovered from the Foreign Sub-Custodian. It is agreed that
the Fund
shall be entitled to amounts recovered by the Custodian under
indemnities
afforded the Custodian under the Foreign Sub-Custodian
Agreements to the
extent the same relate to losses, damages, costs, judgments or
expenses
incurred by the Fund and within the scope of such indemnities.

ARTICLE XVI

CONCERNING THE CUSTODIAN

1. Except as hereinafter provided, or as provided in
Article
XV, neither the Custodian nor its nominee shall be liable for
any loss or
damage, including counsel fees, resulting from its action or
omission to
act or otherwise, either hereunder or under any Margin Account
Agreement,
except for any such loss or damage arising out of its own
negligence or
willful misconduct. The Custodian may, with respect to
questions of law
arising hereunder or under any Margin Account Agreement, apply
for and
obtain the advice and opinion of counsel to the Fund or of its
own
counsel, at the expense of the Fund, and shall be fully
protected with
respect to anything done or omitted by it in good faith in
conformity with
such advice or opinion. The Custodian shall be liable to the
Fund for any
loss or damage resulting from the use of the Book-Entry System
or any
Depository arising by reason of any negligence, misfeasance or
willful
misconduct on the part of the Custodian or any of its employees
or agents.

2. Without limiting the generality of the foregoing,
the
Custodian shall be under no obligation to inquire into, and
shall not be
liable for:

(a) The validity of the issue of any Securities
purchased,
sold or written by or for the Fund, the legality of the
purchase, sale or
writing thereof, or the propriety of the amount paid or received
therefor;

(b) The legality of the issue or sale of any of the
Fund's
Shares, or the sufficiency of the amount to be received
therefor;

(d) The legality of the declaration or payment of any
dividend
by the Fund;

(e) The legality of any borrowing by the Fund using
Securities
as collateral;

(f) The legality of any loan of portfolio Securities
pursuant
to Article XIV of this Agreement, nor shall the Custodian be
under any
duty or obligation to see to it that any cash collateral
delivered to it
by a broker, dealer or financial institution or held by it at
any time as
a result of such loan of portfolio Securities of the Fund is
adequate
collateral for the Fund against any loss it might sustain as a
result of
such loan. The Custodian specifically, but not by way of
limitation,
shall not be under any duty or obligation periodically to check
or notify
the Fund that the amount of such cash collateral held by it for
the Fund
is sufficient collateral for the Fund, but such duty or
obligation shall
be the sole responsibility of the Fund. In addition, the
Custodian shall
be under no duty or obligation to see that any broker, dealer or
financial
institution to which portfolio Securities of the Fund are lent
pursuant to
Article XIV of this Agreement makes payment to it of any
dividends or
interest which are payable to or for the account of the
applicable Series
of the Fund during the period of such loan or at the termination
of such
loan, provided, however, that the Custodian shall promptly
notify the Fund
in the event that such dividends or interest are not paid and
received
when due; or

(g) The sufficiency or value of any amounts of money
and/or
Securities held in any Margin Account, Segregated Security
Account or
Collateral Account in connection with transactions by the Fund.
In
addition, the Custodian shall be under no duty or obligation to
see that
any broker, dealer, futures commission merchant or Clearing
Member makes
payment to the Fund of any variation margin payment or similar
payment
which the Fund may be entitled to receive from such broker,
dealer,
futures commission merchant or Clearing Member, to see that any
payment
received by the Custodian from any broker, dealer, futures
commission
merchant or Clearing Member is the amount the Fund is entitled
to receive,
or to notify the Fund of the Custodian's receipt or non-receipt
of any
such payment; provided however that the Custodian, upon the
Fund's written
request, shall, as Custodian, demand from any broker, dealer,
futures
commission merchant or Clearing Member identified by the Fund
the payment
of any variation margin payment or similar payment that the Fund
asserts
it is entitled to receive pursuant to the terms of a Margin
Account
Agreement or otherwise from such broker, dealer, futures
commission
merchant or Clearing Member.

3. The Custodian shall not be liable for, or
considered to be
the Custodian of, any money, whether or not represented by any
check,
draft or other instrument for the payment of money, received by
it on
behalf of the Fund until the Custodian actually receives and
collects such
money directly or by the final crediting of the account
representing the
Fund's interest at the Book-Entry System or the Depository.

4. The Custodian shall have no responsibility and
shall not be
liable for ascertaining or acting upon any calls, conversions,
exchange,
offers, tenders, interest rate changes or similar matters
relating to
Securities held in the Depository, unless the Custodian shall
have
actually received timely notice from the Depository. In no
event shall
the Custodian have any responsibility or liability for the
failure of the
Depository to collect, or for the late collection or late
crediting by the
Depository of any amount payable upon Securities deposited in
the
Depository which may mature or be redeemed, retired, called or
otherwise
become payable. However, upon receipt of a Certificate from the
Fund of
an overdue amount on Securities held in the Depository, the
Custodian
shall make a claim against the Depository on behalf of the Fund,
except
that the Custodian shall not be under any obligation to appear
in,
prosecute or defend any action, suit or proceeding in respect to
any
Securities held by the Depository which in its opinion may
involve it in
expense or liability, unless indemnity satisfactory to it
against all
expense and liability be furnished as often as may be required.

5. The Custodian shall not be under any duty or
obligation to
take action to effect collection of any amount due to the Fund
from the
Transfer Agent of the Fund nor to take any action to effect
payment or
distribution by the Transfer Agent of the Fund of any amount
paid by the
Custodian to the Transfer Agent of the Fund in accordance with
this
Agreement.

6. The Custodian shall not be under any duty or
obligation to
take action to effect collection of any amount, if the
Securities upon
which such amount is payable are in default, or if payment is
refused
after due demand or presentation, unless and until (i) it shall
be
directed to take such action by a Certificate and (ii) it shall
be assured
to its satisfaction of reimbursement of its costs and expenses
in
connection with any such action.

7. The Custodian shall not be under any duty or
obligation to
ascertain whether any Securities at any time delivered to or
held by it
for the account of the Fund are such as properly may be held by
the Fund
under the provisions of its organization documents.

8. The Custodian shall be entitled to receive and the
Fund
agrees to pay to the Custodian all reasonable out-of-pocket
expenses and
such compensation and fees as are specified on Schedule A
hereto. The
Custodian shall not deem amounts payable in respect of foreign
custodial
services to be out-of-pocket expenses, it being the parties'
intention
that all fees for such services shall be as set forth on
Schedule B hereto
and shall be provided for the term of this Agreement without any
automatic
or unilateral increase. The Custodian may charge such
compensation and
any expenses incurred by the Custodian in the performance of its
duties
pursuant to such agreement against any money held by it for the
account of
the Fund. The Custodian shall also be entitled to charge
against any
money held by it for the account of the Fund the amount of any
loss,
damage, liability or expense, including counsel fees, for which
it shall
be entitled to reimbursement under the provisions of this
Agreement. The
expenses which the Custodian may charge against the account of
the Fund
include, but are not limited to, the expenses of Sub-Custodians
and
foreign branches of the Custodian incurred in settling outside
of New York
City transactions involving the purchase and sale of Securities
of the
Fund.

9. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the
Custodian and reasonably believed by the Custodian to be a
Certificate.
The Custodian shall be entitled to rely upon any Oral
Instructions and any
Written Instructions actually received by the Custodian pursuant
to
Article IV or XI hereof. The Fund agrees to forward to the
Custodian a
Certificate or facsimile thereof, confirming such Oral
Instructions or
Written Instructions in such manner so that such Certificate or
facsimile
thereof is received by the Custodian, whether by hand delivery,
telex or
otherwise, by the close of business of the same day that such
Oral
Instructions or Written Instructions are given to the Custodian.

The Fund
agrees that the fact that such confirming instructions are not
received by
the Custodian shall in no way affect the validity of the
transactions or
enforceability of the transactions hereby authorized by the
Fund. The
Fund agrees that the Custodian shall incur no liability to the
Fund in
acting upon Oral Instructions given to the Custodian hereunder
concerning
such transactions, provided such instructions reasonably appear
to have
been received from an Authorized Person.

10. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably
believed by the Custodian to be given in accordance with the
terms and
conditions of any Margin Account Agreement. Without limiting the
generality of the foregoing, the Custodian shall be under no
duty to
inquire into, and shall not be liable for, the accuracy of any
statements
or representations contained in any such instrument or other
notice
including, without limitation, any specification of any amount
to be paid
to a broker, dealer, futures commission merchant or Clearing
Member.

11. The books and records pertaining to the Fund which
are in
the possession of the Custodian shall be the property of the
Fund. Such
books and records shall be prepared and maintained as required
by the
Investment Company Act of 1940, as amended, and other applicable
securities laws and rules and regulations. The Fund, or the
Fund's
authorized representatives, shall have access to such books and
records
during the Custodian's normal business hours. Upon the
reasonable request
of the Fund, copies of any such books and records shall be
provided by the
Custodian to the Fund or the Fund's authorized representative at
the
Fund's expense.

12. The Custodian shall provide the Fund with any
report
obtained by the Custodian on the system of internal accounting
control of
the Book-Entry System or the Depository, or O.C.C., and with
such reports
on its own systems of internal accounting control as the Fund
may
reasonably request from time to time.

13. The Fund agrees to indemnify the Custodian against
and
save the Custodian harmless from all liability, claims, losses
and demands
whatsoever, including attorney's fees, howsoever arising or
incurred
because of or in connection with the Custodian's payment or
non-payment of
checks pursuant to paragraph 6 of Article XII as part of any
check
redemption privilege program of the Fund, except for any such
liability,
claim, loss and demand arising out of the Custodian's own
negligence or
willful misconduct.

14. Subject to the foregoing provisions of this
Agreement, the
Custodian may deliver and receive Securities, and receipts with
respect to
such Securities, and arrange for payments to be made and
received by the
Custodian in accordance with the customs prevailing from time to
time
among brokers or dealers in such Securities.

15. The Custodian shall have no duties or
responsibilities
whatsoever except such duties and responsibilities as are
specifically set
forth in this Agreement, and no covenant or obligation shall be
implied in
this Agreement against the Custodian.

ARTICLE XVII

TERMINATION

1. (a) Any termination may be effected only by the
terminating party giving to the other party a notice in writing
specifying
the date of such termination, which shall be not less than two
hundred
seventy (270) days after the date of giving of such notice.

(b) The Fund may at any time terminate this
Agreement if
the Custodian has materially breached its obligations under this
Agreement
and such breach has remained uncured for a period of thirty days
after the
Custodian's receipt from the Fund of written notice specifying
such
breach.

(c) Either party, immediately upon written notice
to the
other party, may terminate this Agreement upon the Merger or
Bankruptcy of
the other party.

In the event notice of termination is given by the
Fund, it
shall be accompanied by a copy of a resolution of the Fund's
Board,
certified by the Secretary or any Assistant Secretary, electing
to
terminate this Agreement and designating a successor custodian
or
custodians, each of which shall be a bank or trust company
having not less
than $2,000,000 aggregate capital, surplus and undivided
profits. In the
event notice of termination is given by the Custodian, the Fund
shall, on
or before the termination date, deliver to the Custodian a copy
of a
resolution of its Board, certified by the Secretary or any
Assistant
Secretary, designating a successor custodian or custodians. In
the
absence of such designation by the Fund, the Custodian may
designate a
successor custodian which shall be a bank or trust company
having not less
than $2,000,000 aggregate capital, surplus and undivided
profits. Upon
the date set forth in such notice, this Agreement shall
terminate and the
Custodian shall, upon receipt of a notice of acceptance by the
successor
custodian, on that date deliver directly to the successor
custodian all
Securities and moneys then owned by the Fund and held by it as
Custodian,
after deducting all fees, expenses and other amounts for the
payment or
reimbursement of which it shall then be entitled.

2. If a successor custodian is not designated by the
Fund or
the Custodian in accordance with the preceding paragraph, the
Fund shall,
upon the date specified in the notice of termination of this
Agreement and
upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be
delivered to the
Fund) and moneys then owned by the Fund, be deemed to be its own
custodian, and the Custodian shall thereby be relieved of all
duties and
responsibilities pursuant to this Agreement, other than the duty
with
respect to Securities held in the Book-Entry System, in any
Depository or
by a Clearing Member which cannot be delivered to the Fund, to
hold such
Securities hereunder in accordance with this Agreement.

ARTICLE XVIII

MISCELLANEOUS

1. Annexed hereto as Appendix A is a Certificate
setting forth
the names of the present Authorized Persons. The Fund agrees to
furnish
to the Custodian a new Certificate in similar form in the event
that any
such present Authorized Person ceases to be an Authorized Person
or in the
event that other or additional Authorized Persons are elected or
appointed. Until such new Certificate shall be received, the
Custodian
shall be fully protected in acting under the provisions of this
Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as
set forth in the last delivered Certificate.

2. Annexed hereto as Appendix B is a Certificate
signed by two
of the present Officers of the Fund setting forth the names of
the present
Officers of the Fund. The Fund agrees to furnish to the
Custodian a new
Certificate in similar form in the event any such present
Officer ceases
to be an Officer of the Fund, or in the event that other or
additional
Officers are elected or appointed. Until such new Certificate
shall be
received, the Custodian shall be fully protected in acting under
the
provisions of this Agreement upon the signatures of the Officers
as set
forth in the last delivered Certificate.

3. Any notice or other instrument in writing,
authorized or
required by this Agreement to be given to the Custodian, shall
be
sufficiently given if addressed to the Custodian and mailed or
delivered
to it at its offices at 110 Washington Street, 13th Floor, New
York, New
York 10286, or at such other place as the Custodian may from
time to time
designate in writing.

4. Any notice or other instrument in writing,
authorized or
required by this Agreement to be given to the Fund, shall be
sufficiently
given if addressed to the Fund and mailed or delivered to it at
its
offices at 125 West 55th Street, New York, New York 10019, or at
such
other place as the Fund may from time to time designate in
writing.

5. This Agreement may not be amended or modified in
any manner
except by a written agreement executed by both parties with the
same
formality as this Agreement and approved by a resolution of the
Fund's
Board.

6. This Agreement shall extend to and shall be binding
upon
the parties hereto, and their respective successors and assigns;
provided,
however, that this Agreement shall not be assignable by the Fund
without
the written consent of the Custodian, or by the Custodian
without the
written consent of the Fund, authorized or approved by a
resolution of its
Board.

7. This Agreement shall be construed in accordance
with the
laws of the State of New York.

8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such
counterparts shall, together, constitute only one instrument.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized, as of the day and year first above written.

PRAIRIE MUNICIPAL BOND FUND, INC.

By:

Attest:

THE BANK OF NEW YORK

By:

Attest:

<PAGE>
Appendix A

AUTHORIZED SIGNATORIES

Primary Funds Service Corp.
Putnam Investor Services, Inc.
Putnam Fiduciary Trust Company

Cathy Alessi
Maryellen Cartwright
Joy Daoulaband
Donna Gorman
Timothy Griesmer
Maureen Hansen
Shari MacGray
Julie Malloy
Michelle Stuckey

Concord Financial Group, Inc.

Alex Bogaenko
Emanuel Bratton
Karen Collins
Marlea Durand
Carol Hartmann
Lester Lay
Wendy Mui
Joy Young

First Chicago Investment Management Company

Mary Engen
Steve Haldi
Frank Hemeter
Terrall Janeway
Mark Quinn

<PAGE>
Appendix B

The undersigned Officers of the Fund do hereby certify
that the
following individuals, whose specimen signatures are on file
with The Bank
of New York, have been duly elected or appointed by the Fund's
Board to
the position set forth opposite their names and have qualified
therefor:

Name Position

Joseph F. Kissel President

Ann E. Bergin Vice President

Stephen A. Smith Vice President

Richard A. Fabietti Treasurer

Martin G. Flanigan Assistant Treasurer

Domenick Pugliese Secretary

Anne E. Bergin, Domenick Pugliese,
Vice President Secretary

<PAGE>

Appendix C

The following are designated publications for purposes
of paragraph 5(b) of Article III:

The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
The New York Times
Standard & Poor's Called Bond Record
The Wall Street Journal

<PAGE>

Appendix D

Name of Series

<PAGE>

Schedule A

The fees payable to the Custodian with respect to
securities held in domestic custody are annexed hereto.

<PAGE>
DOMESTIC CUSTODIAN FEE SCHEDULE
CONCORD FINANCIAL GROUP, INC.
FOR
PRAIRIE FUND FAMILY
PER PORTFOLIO/PER ANNUM

Safekeeping/Income Collection/All Reporting, DTC-ID Affirmations

2 basis points per annum on the first $50MM of each

portfolio's
net assets.

1 basis point on the next $250MM.

o of a basis point on the excess.

Security Transaction Charges/Paydowns

$10 DTC/FRB/PTC
$20 Physicals, options, and futures
$40 Euro Dollar C/Ds

Miscellaneous Transaction Charges

$ 8 Federal Reserve wires not related to securities

transactions,
and official check requests for payment of Fund

expenses.

Earnings Credit on Balances/Interest on Overdrafts

We will provide an earnings credit to each Fund on 100% of the
daily
available balance in the domestic custodian account after
reduction for
Federal Reserve requirements, computed at the 90-day T-bill rate
on the
day of the balance.

Overdrafts, excluding bank errors, will cause a reduction of the
earnings
credit computed at 1% above the Federal Funds rate on the day of
the
overdraft.

FDIC charges shall be assessed on the ledger balance as of the
last
business day of the quarter computed at the rate assessed by the
FDIC.
The charges shall be netted against the earnings credits or
overdraft charges.

Credits and debits will be accumulated daily and offset monthly
against
the Bank's domestic custodian fees. To the extent a net debit
is
accumulated, each Fund will be billed for the expense. To the
extent a
net earnings credit is generated, such excess credit can be
carried
forward to the next succeeding month. However, no earnings
credit will be
carried forward after year-end.

<PAGE>
DOMESTIC CUSTODIAN FEE SCHEDULE
CONCORD FINANCIAL GROUP, INC.
FOR
PRAIRIE FUND FAMILY
PER PORTFOLIO/PER ANNUM

Additional Charges

These charges traditionally include, but are not limited to,
Federal
Reserve charges for security transactions, postage and insurance
on physical transfer items, etc.

Billing Cycle

The above fees are billed monthly.

Concord Financial Group, Inc. The Bank of New York

Approved by:_________________ Submitted by:_______________
Ira R. Rosner
Vice President

Title:________________________

Date:____________________Date:__________________

<PAGE>

FUND ACCOUNTING AND PORTFOLIO PRICING FEE SCHEDULE
CONCORD FINANCIAL GROUP, INC.
FOR
PRAIRIE FUND FAMILY

Fund Accounting and Portfolio Pricing

$35,000 per annum, per portfolio

Additional Charges

The cost of obtaining prices for daily security evaluations and
mark to
market quotations for money market funds will be in addition to
the stated fees.

Multiple Class Charges

$300 per month for each additional class, per
portfolio.

Billing Cycle

The above fees will be billed on a monthly basis.

Concord Financial Group, Inc. The Bank of New York

Approved by:_________________ Submitted by:_______________
Ira R. Rosner
Vice President

Title:________________________

Date:____________________Date:__________________

<PAGE>
SCHEDULE B

The fees payable to the Custodian with respect to
securities held in foreign custody are annexed hereto.

<PAGE>
THE BANK OF NEW YORK
GLOBAL CUSTODY FEE SCHEDULE
17f-5 QUALIFIED SUB-CUSTODIANS
PRAIRIE FUNDS

COUNTRIES GLOBAL
SAFEKEEPING FEE

Transaction Fee
(in basis points)

(U.S. Dollars)

<S> <C>

<C>
Argentina 34.50

90
Australia 4.00

70
Austria 6.00

85
Bangladesh 50.00

185
Belgium (reg. bds) 2.50

85
Belgium (equities and Coupon bonds) 4.00

85
Brazil 55.00

85
Canada 2.00

17
Chile 80.00

100
China 31.00

60
Colombia 75.00

125
Czech Republic 23.00

50
Denmark 3.50

105
Euromarket 3.00

15
Finland 12.50

70
France 5.00

85
Germany 2.00

35
Greece 37.50

165
Hong Kong 11.00

90
Hungary 50.00

150
India 55.00

175
Indonesia 13.50

140
Ireland 3.50

50
Israel 75.00

55
Italy 9.00

60
Japan (bonds) 4.00

10
Japan (equities) 3.00

10
Luxembourg 8.00

80
Malaysia 15.00

140
Mexico (bonds) 8.00

70
Mexico (equities) 15.00

70
Netherlands 6.00

12
New Zealand 3.50

85
Norway 2.00

85
Pakistan 40.00

165
Peru 75.00

190
Philippines 14.50

140
Poland 60.00

165
Portugal 31.00

240
Singapore 15.00

135
South Africa 1.50

35
South Korea 13.00

25
Spain 6.00

30
Sri Lanka 20.00

70
Sweden 3.00

60
Switzerland 3.50

125
Taiwan 17.00

135
Thailand 15.00

85
Turkey 30.00

100
United Kingdom 3.00

35
United Kingdom (gilts) 4.00

55
Uruguay 55.00

85
Venezuela 41.50

</TABLE>

* Fee expressed in basis points per annum is
calculated based upon month end market value.

Minimum fee for use of our global network
$500 per month, per portfolio

Minimum charges imposed by Agent Banks/Local
Administrators
Chile - USD 5,000 per annum.
Colombia - USD 600 per month.

Additional Charges

Charges incurred by The Bank of New York for local taxes,
stamp duties or other local duties and assessments, stock
exchange fees, postage and insurance for shipping,
extraordinary telecommunication fees or other unusual expenses
which are unique to a country in which our client is investing
will be in addition to the stated fees.

<PAGE>

Exhibit 9(a)

ADMINISTRATION AGREEMENT

PRAIRIE MUNICIPAL BOND FUND, INC.
125 West 55th Street
New York, New York 10019

January 1, 1995

First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670

Dear Sirs:

In this connection it is understood that from time to
time you will employ or associate with itself such person or
persons as you may believe to be particularly fitted to assist
it in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect. We have discussed and
concur in your employing on
this basis Concord Holding Corporation (the "Sub-
Administrator").

Pursuant to this agreement and subject to the
supervision and control of the Fund's Board, you will assist
in supervising all aspects of the Fund's operations, except
investment management of the Series' portfolios. It is
understood that, pursuant to this Agreement, you shall not act
and shall not be required to act as an investment adviser or
have any authority to supervise the investment or reinvestment
of the cash, securities or other property comprising the
Series' assets or to determine what securities or other
property may be purchased or sold by the Fund.

You will supply office facilities (which may be in
your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and
legal services, internal executive and administrative
services, and stationery and office supplies; prepare reports
to each Series' stockholders, tax returns, reports to and
filings with the Securities and Exchange Commission and state
Blue Sky authorities; calculate the net asset value of each
Series' shares; and generally assist in all aspects of the
Fund's operations.

You shall exercise your best judgment in rendering
the services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that
neither you nor the Sub-Administrator shall be liable
hereunder for any error of judgment or mistake of law or for
any loss suffered by one or more Series, provided that nothing
herein shall be deemed to protect or purport to protect you or
the Sub-Administrator against any liability to the Fund or a
Series or to its security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of your duties hereunder,
or by reason of your reckless disregard of your obligations
and duties hereunder, or to which the Sub-Administrator would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties
under the agreement by which you engage it (the "Master Sub-
Administration Agreement"), or by reason of its reckless
disregard of its obligations and duties under such agreement.

In consideration of the services rendered pursuant to
this Agreement, the Fund will pay you on the first business
day of each month a fee at the rate set forth opposite each
Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described
in the Fund's then-current Prospectus and Statement of
Additional Information. The fee for the period from the date
of the commencement of the public sale of a Series' shares to
the end of the month during which such sale shall have been
commenced shall be pro-rated according to the proportion which
such period bears to the full monthly period, and upon any
termination of this Agreement before the end of any month, the
fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.

You will bear all expenses in connection with the
performance of your services under this Agreement and will pay
all fees of the Sub-Administrator in connection with its
duties in respect of the Series. All other expenses to be
incurred in the operation of the Fund will be borne by the
Fund, except to the extent specifically assumed by you. The
expenses to be borne by the Fund include, without limitation,
the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of
Board members, Securities and Exchange Commission fees and
state Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Series' existence, costs
attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing stockholders, costs of stockholders'
reports and corporate meetings, and any extraordinary
expenses.

The Fund understands that, from time to time
hereafter, you may act as administrator to one or more other
investment companies and fiduciary or other managed accounts,
and the Fund has no objection to your so acting. In addition,
it is understood that the persons employed by you to assist in
the performance of your duties hereunder will not devote their
full time to such service and nothing contained herein shall
be deemed to limit or restrict your right or the right of any
of your affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or
nature.

Neither you nor the Sub-Administrator shall be liable
for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which
this Agreement or the Master Sub-Administration Agreement
relates, except, in the case of you, for a loss resulting from
willful misfeasance, bad faith or gross negligence on your
part in the performance of your duties or from reckless
disregard by you of your obligations and duties under this
Agreement and, in the case of the Sub-Administrator, for a
loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties
under the Master Sub-Administration Agreement. Any person,
even though also your officer, Board member, partner, employee
or agent, who may be or become an officer, Board member,
partner, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of
the Fund, to be rendering such services to or acting solely
for the Fund and not as your officer, Board member, partner,
employee, or agent or one under your control or direction even
though paid by you.

As to each Series, this Agreement shall continue
until the date set forth opposite such Series' name on
Schedule 1 hereto (the "Reapproved Date"), and thereafter
shall continue automatically for successive annual periods
ending on the day of each year set forth opposite the Series'
name on Schedule 1 hereto (the "Reapproval Day"), provided
such continuance is specifically approved at least annually by
(i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940, as amended) of such
Series' outstanding voting securities, provided that in either
event its continuance also is approved by a majority of the
Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting
on such approval. As to each Series, after the Reapproval
Date, this Agreement is terminable without penalty, on 60
days' notice, by the Fund's Board or by vote of holders of a
majority of such Series' shares or, upon not less than 90
days' notice, by you. This Agreement also will terminate
automatically, as to the relevant Series, in the event of its
assignment (as defined in said Act).

The Fund is agreeing to the provisions of this
Agreement that limit the Sub-Administrator's liability and
other provisions relating to the Sub-Administrator so as to
induce the Sub-Administrator to enter into the Master Sub-
Administration Agreement with you and to perform its
obligations thereunder. The Sub-Administrator is expressly
made a third party beneficiary of this Agreement with rights
as respects the Fund to the same extent as if it had been a
party hereto.

The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
administration or other agreements with such other entities.
If you cease to act as the Fund's administrator, the Fund
agrees that, at your request, the Fund will take all necessary
action to change the name of the Fund to a name not including
"Prairie" in any form or combination of words.

If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.

Very truly yours,

PRAIRIE MUNICIPAL BOND FUND, INC.

By:

Accepted:

FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY

By:

<PAGE>

<TABLE>
SCHEDULE 1

Annual Fee
as a
Percentage
of Average
Daily Net Reapproval Reapproval
Name of Fund or Series Assets Date Date

<S> <C> <C> <C>
Prairie Municipal Bond .15% December 31, 1996 December
31st
Fund, Inc.

</TABLE>
<PAGE>

Exhibit 9(b)

MASTER SUB-ADMINISTRATION AGREEMENT

This Master Sub-Administration Agreement is made as
of this 31st day of January 1995 between FIRST CHICAGO
INVESTMENT MANAGEMENT COMPANY, a Delaware corporation, with a
principal place of business at Three First National Plaza,
Chicago, Illinois 60670 (herein called the "FCIMCO"), and
CONCORD HOLDING CORPORATION, a Delaware corporation with a
principal place of business at 125 West 55th Street New York, NY
10019 (herein called "Concord").

WHEREAS, FCIMCO serves as investment adviser and
administrator to the Prairie Funds, Prairie Institutional Funds,
Prairie Intermediate Bond Fund, Prairie Municipal Bond Fund,
First Prairie Money Market Fund, First Prairie Municipal Money
Market Fund and First Prairie Diversified Asset Fund
(individually each a "Fund" and collectively, the "Funds"), each
an open-end, management investment company registered under the
Investment Company Act of 1940, as amended, and consisting of
the investment portfolios set forth on Schedule I hereto, as
such Schedule may be revised from time to time (individually,
each a "Portfolio" and collectively, the "Portfolios"); and

WHEREAS, pursuant to the terms of an administration
agreement between FCIMCO and each Fund (collectively the
"Administration Agreement"), FCIMCO may employ Concord to assist
it in performing its obligations under the Administration
Agreement; and

WHEREAS, each Fund offers for sale shares of
beneficial interest of its Portfolio(s), with or without par
value as may be determined from time to time by each Fund's
Board of Trustees (herein collectively called "Shares"); and

WHEREAS, pursuant to a Distribution Agreement
(collectively the "Distribution Agreement") between each Fund
and Concord Financial Group, Inc. ("CFG"), each Fund has
retained CFG as its distributor to provide for the sale and
distribution of the Shares; and

WHEREAS, FCIMCO desires to employ Concord to assist
it in performing its obligations pursuant to the Administration
Agreement as more fully described herein, and Concord is willing
to render such services under the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the foregoing,
and for other good and valuable consideration, the sufficiency
and receipt whereof are hereby acknowledged, the parties hereto
agree as follows:

I. DELIVERY OF DOCUMENTS

FCIMCO has delivered to Concord copies of each of the
following documents and will deliver to it all future amendments
and supplements thereto, if any:

(a) The Funds' Declarations of Trust and all
amendments thereto (each such Declaration of Trust, as presently
in effect and as it shall from time to time be amended (herein
called collectively the "Declaration of Trust");

(b) The by-laws of each Fund, if any (such by-laws
as presently in effect and as they shall from time to time be
amended, herein called the "By-Laws");

(d) Each Fund's most recent Registration Statement
under the Securities Act of 1933, as amended (the "1933 Act"),
and/or the Investment Company Act of 1940, as amended (the "1940
Act"), on Form N-1A, Form N-14 or other applicable form, as
filed with the Securities and Exchange Commission (the
"Commission") relating to the Shares and any amendment thereto;

(e) Notification of registration of each Fund under
the 1940 Act on Form N-8A as filed with the Commission; and

(f) Prospectuses and statements of additional
information of each Fund with respect to each of the Portfolios
(such prospectuses and statements of additional information, as
presently in effect and as they shall from time to time be
amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").

(g) The Administration Agreement.

II. SUB-ADMINISTRATION SERVICES

1. Engagement as Sub-Administrator. FCIMCO hereby
engages Concord to serve as Sub-Administrator for each of the
Portfolios, and Concord hereby accepts such appointment, under
the terms and conditions set forth herein. FCIMCO understands
and agrees that Concord currently acts and will in the future
continue to act as administrator or sub-administrator of various
investment companies which may be unaffiliated with the Funds
and as fiduciary of other managed accounts. In addition, it is
understood that the persons employed by Concord to assist in the
performance of its duties hereunder will not devote their full
time to such services and may in fact devote a substantial
portion of their time in the performance of duties relating to
Concord's provision of services to other investment companies or
fiduciary accounts and nothing herein shall be deemed to limit
or restrict the right of Concord, its affiliates, and their
respective employees to engage in and devote time and attention
to other businesses or to render services of whatever kind or
nature to Concord's other clients.

2. Services and Duties.

(a) As Sub-Administrator, and subject to the
supervision and control of FCIMCO, Concord will provide those
facilities, equipment, statistical and research data, clerical
services, internal compliance services relating to legal matters
(and personnel to carry out such administrative services) as are
specifically described in paragraph (b) of this paragraph 2
below. FCIMCO represents and warrants to Concord that the
Administration Agreement sets forth all of its duties and
obligations to the Funds as administrator and that it has
entered into no other agreements or understandings with the
Funds with respect to the matters set forth therein. Concord
represents that the services to be performed by it pursuant to
this Agreement are all the administrative services necessary to
permit FCIMCO to discharge fully its obligations to each Fund
under the Administration Agreement (collectively the "Necessary
Services"). Concord agrees to amend this Agreement to add any
additional services legally necessary in order for FCIMCO to
perform its obligations under the Administration Agreement, and
such additional services shall be included as Necessary Services
and shall be provided at no additional cost. FCIMCO understands
and agrees that from time to time Concord may develop and/or
provide to third parties services which may be different from,
or in addition to, the Necessary Services. Concord is not
obligated to provide FCIMCO or the Funds with any services which
are not Necessary Services without further agreement as to
services and additional cost. Concord represents that it has
sufficient personnel and experience to perform the services to
be performed by it hereunder, and agrees to perform such
services in accordance with industry standards for mutual fund
administrators.

(b) Concord shall provide the following services
teach Fund and its Portfolios.

(i) Advertising and Sales Literature
Support

1. Review and approve for all applicable Securities and
Exchange Commission, NASD (defined below) and all
state compliance requirements all advertising and
sales material prepared by the Fund or its
distributor. It is understood and agreed that
Concord shall not be responsible for the truth or
accuracy of any statements contained in material
which was not prepared by Concord.
2. File all advertising and sales material with the
National Association of Securities Dealers, Inc.
(NASD).
3. Maintain and update the Fund's advertising and sales
literature files.
4. Update advertising logs for all Portfolios.
5. Retain final copies of advertising and sales
materials for the Fund's files.
6. Respond to all NASD or other regulator comments and
provide any necessary contact person for interface
with NASD/other regulator.

(ii) Fund Officers

1. Provide officers to the Fund

(iii) Fund Compliance

1. Maintain files of all Board and shareholder meeting
materials.
2. Prepare quarterly Board meeting responsibility chart.
3. Maintain annual filing calendar and follow up with
responsible parties.
4. Review, as requested, investment adviser's reports to
be submitted to the Board pursuant to applicable Fund
procedures.
5. Monitor compliance by the Fund with various
conditions imposed by exemptive orders relating to
multiple classes of shares.
6. Quarterly review of securities transactions by
persons designated as access persons by the
investment adviser for purposes of determining
compliance with Fund's Code of Ethics.
7. Review monthly Prospectus compliance reports prepared
by the investment adviser.
8. Negotiate D&O/E&O insurance matters and annual
renewals on behalf of the Fund.
9. Monitor fidelity bond coverage for the Fund.
10. Maintain insurance files for the Fund.
11. Review Prospectuses, as prepared by counsel to the
Fund.
12. Review periodic supplements to Prospectuses, as
prepared by counsel to the Fund.
13. Prepare operating manual for the Fund.
14. Prepare Board agendas and Board books.
15. Review material and reports prepared by Fund
auditors, and material prepared by counsel to the
Fund which is submitted to Concord.

(iv) Blue Sky

1. Register the Shares with appropriate state blue sky
authorities.
2. Work with counsel to the Fund to address comments
during the registration process.
3. Obtain all sales permits required by relevant state
authorities in order to permit the sale of Shares in
the state.
4. Amend and renew sales permits obtained pursuant to
paragraph 2(b)(iv)(3) as may be required from time to
time.
5. Monitor the sale of Shares in individual states on a
daily basis.
6. File all registration statements, Prospectuses, proxy
statements, Rule 24f-2 Notices and other Fund reports
and documents as required by states' law.
7. Maintain Fund blue sky calendars.
8. Respond to all blue sky audit and examination issues.

(v) Corporate Counsel

1. Provide support for administrative functions
described in paragraph (b)(i) above.
2. Review Fund distribution agreements.
3. Review Fund administration agreements.
4. Review Prospectuses, amendments, and proxy statements
prepared by counsel to the Fund.
5. Provide, as needed, support to blue sky compliance,
i.e., assist in responding to comment letters, on
Fund compliance and as requested by project managers.
6. Maintain files of Prospectuses, Fund contracts, Fund
proxies and other similar Fund documents.
7. Attend Board and Shareholder Meetings, as requested
by the Fund or FCIMCO.
8. Prepare resolutions for Board Meetings.
9. Prepare and run shareholder meetings.
10. Prepare and maintain corporate records of the Fund
(minute book, etc.)
11. Assist in preparing for and complying with any
regulatory examinations of or involving the Fund.

(vi) Fund Accounting

A. Treasurer

1. Perform the functions of Fund Treasurer.

B. Accounts Payable Functions

2. Review invoices directed to the Fund and authorize
payments as appropriate.
3. Prepare and file form 1099-MISC for Fund expense
payments, including Trustees' fees.

C. Oversight Functions: Oversight of required books and
records for the Fund, as maintained by Bank of New
York (BONY), or its successor, and oversight and
maintenance of any required books and records for the
Fund as required by Rule 31(a)-1 of the 1940 Act
which are not maintained by BONY.

4. Daily review of net asset value and dividend
calculations.
5. Review of daily ledgers and trial balances.
6. Review of monthly closing packages and related
reports.
7. Daily net asset value calculation for all Portfolios.
8. Compliance with Fund and investment adviser policies
on valuing (pricing) all Fund assets.

D. Reporting Functions:

9. Calculate dividends, as required (daily for money
market funds, etc.).
10. Calculate fee-based expenses, such as advisory fees,
administration fees and 12b-1 fees.
11. Monitor expense accruals for adequacy, and make
adjustments as needed.
l2. Prepare the following financial reports, as required:
* Annual report to shareholders
* Semi-annual report to shareholders
* Quarterly reports to Board of Trustees
* Monthly portfolios of investments
13. Prepare or assist in preparation of the following
regulatory filings:
* Form N-SAR (prepare)
* Form N-1A (assist)
* Proxy materials (assist)
14. Prepare IRS Qualification Tests.
* Income diversification
* Asset diversification
15. Prepare or oversee the preparation of the following
performance calculations:
* Total return
* SEC yield
* Distribution yield
* Total return at varying sales charges
16. Respond to surveys from industry publications
including, but not limited to Lipper, Donoghues,
Moringstar, Dalbar, Investment Company Institute,
Standard & Poor's
17. Prepare (or assist Fund auditors in preparing) and
file tax returns, including, but not limited to:
Form 1120-RIC, state and local filings, excise tax
returns.
18. Identify and track book-tax differences, including,
but not limited to: taxability of dividends, income
by state, income by source (US Treasury, Govt Agency,
etc.), dividends received, deduction information,
Alternative Minimum Tax information.

(vii) Operations

A. Administration

1. Assist with management/implementation of DDA Sweep.
2. Coordinate use of outside vendors by Fund.
3. Provide a designated project manager for routine
ongoing projects.
4. Coordinate the printing and distribution of
Prospectuses, annual and semi-annual reports.

B. Systems

5. If specifically agreed between Concord and FCIMCO
from time to time, research and analysis on specific
technical and systems needs of FCIMCO and the Fund.
Such research and analysis may include, feasibility
studies, the creation of systems specifications and
implementation plans, design and testing, and support
in implementation. In addition to the compensation
paid to Concord under paragraph 5 hereof, such
support shall be billed at a rate of $1,500 per day
plus expenses for systems support personnel.

(viii) Relationship Manager

1. Provide a designated individual to serve as a primary
contact for FCIMCO and the Fund on matters relating
to this Agreement.

(ix) Consultative Service

1. Provide limited internal asset gathering consulting
through the relationship manager, as supported by the
project manager.

2. Provide internal sale and educational support
relating to DDA sweep.

(c) In performing its duties herein, Concord
warrants that it will act in conformity with the Declaration of
Trust, By-Laws, and Prospectuses and in accordance with the
instructions and directions of FCIMCO and the Board of Trustees
of each Fund and agrees and warrants that it will conform to and
comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.

(d) Where Concord is required to review or approve
any document, it shall maintain a record of its approval.

3. Subcontractors. It is understood that Concord
may from time to time employ or associate with itself such
person or persons ("Subcontractors") as Concord may believe to
be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such
Subcontractors shall be paid by Concord and that Concord shall
be as fully responsible to the Funds and FCIMCO for the acts and
omissions of any Subcontractor as it is for its own acts and
omissions.

4. Expenses Assumed as Sub-Administrator. Except
as otherwise set forth in this paragraph 4, Concord shall pay
all expenses incurred by it in performing its services and
duties as described herein, including the cost of providing
office facilities, equipment and personnel related to such
services and duties. Other expenses incurred in the operation
of each Fund and the Portfolios (other than those borne by the
Funds' investment adviser or administrator) including taxes,
interest, brokerage fees and commissions, if any, fees of
Trustees who are not officers, directors, partner, employees or
holders of 5 percent or more of the outstanding voting
securities of the Funds' investment adviser or Concord or any of
their affiliates, Securities and Exchange Commission fees and
state blue sky registration or qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, fund accounting agents' fees, fidelity bond and
Directors and officers' errors and omissions insurance premiums,
outside auditing and legal expenses, costs of maintaining
corporate existence, costs attributable to shareholder services,
including without limitation telephone and personnel expenses,
costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders, costs of
shareholders' reports and each Fund's meetings and any
extraordinary expenses will be borne by the respective Fund.
The parties hereto further acknowledge and agree that nothing in
this paragraph 4 shall be deemed to impose any obligation on
Concord to pay any expenses not incurred by it or to pay any
expenses incurred by it on behalf of any Fund not directly
associated with Concord's provision of sub-administration
services as described herein.

6. During normal business hours, Concord shall
allow FCIMCO, its auditors, the Funds and the Funds' auditors,
and the Commission, the Comptroller of the Currency and other
appropriate regulators reasonable access to all data, records,
information and personnel relating to Concord's services under
this Agreement.

III. CONFIDENTIALITY

Concord will treat as confidential and as proprietary
information all records and other information of each Fund and
the Portfolios and their prior or present shareholders or those
persons or entities who respond to CFG's inquiries concerning
investment in each Fund, and except as provided below, will not
use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, or the
performance of its responsibilities and duties with regard to
any other Portfolio which may be added to any Fund in the
future. Any other use by Concord of the information and records
referred to above of a Fund may be made only after prior
notification to and approval in writing by that Fund. The
Parties hereto acknowledge and agree that, notwithstanding
anything in the foregoing to the contrary, Concord may release
the information described above, upon prior notice to FCIMCO and
the Fund, if (i) on the written advice of its counsel its
failure to release such information would expose it to civil or
criminal contempt proceedings for failure to release such
information, or (ii) such release is required by law.

IV. LIMITATION OF LIABILITY, SURVIVAL; INDEMNIFICATION

1. Concord shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the
FCIMCO or the Funds in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from its reckless disregard of its
obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of
Concord, who may be or become an officer, director, employee or
agent of any Fund, shall be deemed, when rendering services to
the Fund or acting on any business of the Fund (other than
services or business in connection with Concord's duties
hereunder) to be rendering such services to or acting solely for
the Fund and not as an officer, director, partner, employee or
agent or one under the control or direction of Concord even
though paid by Concord.

2. Concord hereby indemnifies FCIMCO against, and
agrees to hold it harmless from any and all damage, loss,
liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and
expenses) in connection with any action, suit or proceeding
brought against FCIMCO or any of its affiliates, incurred or
suffered by FCIMCO or any of its affiliates arising out of or
resulting from Concord's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement
or from its reckless disregard of its obligations and duties
under this Agreement.

3. FCIMCO hereby indemnifies Concord against and
agrees to hold it harmless from any and all damage, loss,
liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and
expenses) (collectively "Damages") in connection with any
action, suit or proceeding brought against Concord and/or any of
its affiliates, incurred or suffered by Concord or any of its
affiliates arising out of or resulting from FCIMCO's willful
misfeasance, bad faith or gross negligence in the performance of
its duties as Investment Adviser and Administrator of any Fund
or from its reckless disregard of its obligations and duties to
any Fund except that FCIMCO shall not indemnify Concord or its
affiliates for Damages arising out of or resulting from
services, obligations and duties undertaken by Concord as
provided in this Agreement.

4. The party seeking indemnification under this
Article IV (the "Indemnified Party") agrees to give prompt
notice to the party from whom indemnity is sought (the
"Indemnifying Party") of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of
which Indemnifying Party may be liable under this Article IV.
The Indemnifying Party may, and at the request of the
Indemnified Party shall, participate in and control the defense
of any such suit, action or proceeding at its own expense. The
Indemnifying Party shall not be liable under this Article IV for
any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be
sought hereunder.

5. The liability and obligations of either party
hereto arising pursuant to the provisions of this ARTICLE IV
shall survive the termination of this Agreement.

V. DURATION AND TERMINATION

1. This Agreement shall become effective as of the
date first above written and shall continue until February 1,
1998. Thereafter, if not terminated, this Agreement shall
continue automatically as to a particular Portfolio for
successive terms of one year. Other than an "assignment" of
this Agreement by Concord to The BISYS Group, Inc. or an
affiliate thereof ("BISYS") this Agreement will automatically
and immediately terminate in the event of its "assignment." As
used in this Agreement, the term "assignment" shall have the
same meaning as such term has in the 1940 Act. If this
Agreement is assigned to BISYS then the term "Concord" shall
refer to BISYS which shall assume all duties, obligations and
responsibilities of Concord hereunder. FCIMCO may terminate
this contract in the event Concord is declared insolvent,
bankrupt, or an assignment is made for the benefit of its
creditors.

2. Anything in this Agreement to the contrary
notwithstanding:

(a) On or after February 1, 1997 FCIMCO may
terminate this Agreement by three months prior written notice to
Concord provided that:

(i) as of the termination date provided in such
notice ("Early Termination Date") all or
substantially all of Concord's duties and
responsibilities under this Agreement will be
performed by FCIMCO or another direct or indirect
subsidiary of First Chicago Corporation and

(ii) as of the Early Termination Date FCIMCO shall
pay Concord a termination fee equal to four times the
fee payable to Concord pursuant to Article II,
paragraph 5 of this Agreement for the month which
immediately proceeds the month in which the Early
Termination Date occurs.

(b) On or after February 1, 1998, in addition to
the method of termination by FCIMCO provided in paragraph 2(a)
immediately above, including the requirements of paragraphs
2(a)(i) and 2(a)(ii), either party hereto may terminate this
Agreement by six months prior written to the other party hereto.

(c) FCIMCO shall have the right to terminate this
Agreement upon 45 days written notice if Concord materially
breaches this Agreement. A material breach means the failure to
perform the terms of this Agreement, whether in one act or
omission or a series of acts or omissions, whether or not
related, which (i) results or reasonably could be expected to
result in loss or damage, including expenses, to FCIMCO and/or
the Funds exceeding $50,000 in the aggregate, (ii) results in
the institution of civil or criminal proceedings by the
Commission or other regulator, other than a regular audit or
examination, (iii) constitutes negligence, bad faith or willful
misconduct, (iv) constitutes a violation of any law, rule or
regulation applicable to the Funds, FCIMCO or Concord or any of
its affiliates as to which Concord was required to comply under
the terms of the Agreement where the consequences of such
violation could reasonably be expected to result in the
institution of civil or criminal proceedings by the Commission
or other governmental authorities against the Funds or FCIMCO or
any of its affiliates, or (v) evidences a quantifiable and
material decline in the overall quality of services, provided
that Concord shall have the right to cure the breach set forth
in this clause (v) within 30 days after a written notice setting
forth in detail the nature of the breach, has been delivered to
Concord; provided Concord shall have the right to cure a breach
set forth in this clause (v) if and only if no more than two
other quantifiable and material breaches under this clause (v)
have occurred within the 12 months prior to the delivery of such
notice of the breach of this clause (v). In addition, FCIMCO
shall have the right to terminate this Agreement upon 45 days
written notice if Concord or its affiliates provide or propose
to provide mutual fund administration or distribution services
similar to the Necessary Services to one or more investment
companies whose investment adviser is (i) Stien, Roe and Farnham
or one of its affiliates or (ii) a bank or affiliate thereof,
other than FCIMCO or Bank of America Illinois, having its
principal place of business in the Chicago metropolitan area;
provided, however, that the foregoing termination right shall
not apply in the following two circumstances: (i) Concord or
its affiliates may provide fund administration or distribution
services similar to the Necessary Services to one or more
investment companies whose investment adviser is a bank, or
affiliate thereof, having a principal place of business in the
Chicago metropolitan area (a "Chicago Bank Advised Fund")
provided that such bank or affiliate has, since the date of this
Agreement, merged with, been acquired by, or is otherwise
affiliated with, another bank which acts as investment adviser
to an investment company for which Concord or its affiliates
currently acts as administrator, sub-administrator or
distributor, and (ii) Concord or its affiliates may provide one
or more of the Necessary Services, and may provide fund
accounting and transfer agency services, to Chicago Bank-Advised
Funds and other unaffiliated third parties, provided that
Concord or an affiliate of Concord is not named as administrator
or sub-administrator or any other title which may reflect or
imply that Concord is providing the totality of Necessary
Services to such Chicago Bank-Advised Funds.

3. In the event of the termination of this
Agreement, Concord shall use its best efforts to assist in the
transfer of its responsibilities hereunder to FCIMCO or any
successor administrator or sub-administrator and Concord without
compensation shall remain responsible, which responsibility
shall survive termination of this Agreement, for all regulatory
filings, tax returns and other reports which relate to periods
which concluded prior to the termination.

VI. AMENDMENT OF THIS AGREEMENT

No provision of this Agreement may be changed,
waived, discharged or terminated, except by an instrument in
writing signed by both parties hereto.

VII. NOTICES

Notices of any kind to be given to FCIMCO hereunder
by Concord shall be in writing and shall be duly given if
mailed, faxed or delivered to FCIMCO, Three First National
Plaza, Suite 0334, Chicago, Illinois 60670, Attention: Marco
Hanig or such other address or to such individual as shall be so
specified in writing by FCIMCO to Concord. Notices of any kind
to be given to Concord hereunder by FCIMCO shall be in writing
and shall be duly given if mailed, faxed or delivered to Concord
at 125 West 55th Street, New York New York 10019, Attention:
Richard E. Stierwalt, Chief Executive Officer, or at such other
address or to such individual as Concord shall specify in
writing to FCIMCO.

VIII. MISCELLANEOUS

1. Construction. The captions in this Agreement
are included for convenience of reference only and in no way
define or limit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of
Article V hereof, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and shall be governed by Illinois law; provided,
however, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the
Commission thereunder.

IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.

FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY

By:________________________
President

CONCORD HOLDING CORPORATION

By:_________________________

<PAGE>
SCHEDULE I

PRAIRIE FUNDS:

Bond Fund
Equity Income Fund
Growth Fund
Intermediate Municipal Bond Fund
International Bond Fund
International Equity Fund
Managed Assets Fund
Managed Assets Income Fund
Money Market Fund
Municipal Money Market Fund
Special Opportunities Fund
U.S. Government Money Market Fund
Municipal Bond Fund
Intermediate Bond Fund

PRAIRIE INSTITUTIONAL FUNDS:

Cash Management Fund
Municipal Cash Management Fund
Treasury Prime Cash Management Fund
U.S. Government Securities Cash Management Fund

FIRST PRAIRIE:

First Prairie Diversified Assets Fund
First Prairie Money Market Funds
Money Market Series
Government Series
First Prairie Municipal Money
Market Fund

<PAGE>

Exhibit 11

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm
under the captions "Condensed Financial Information" in the
Prospectus and
"Counsel and Independent Auditors" in the Statement of
Additional
Information and to the use of our reports, dated December 9,
1994,
February 10, 1995, March 15, 1995, April 21, 1995, February 7,
1995 and
February 3, 1995, in this Registration Statement (Form N-1A No.
33-18954)
of Prairie Municipal Bond Fund, Inc.

ERNST & YOUNG LLP

New York, New York
June 1, 1995

<PAGE>
EXHIBIT 18

THE PRAIRIE FUNDS

RULE 18F-3 PLAN

Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), requires that the Board of an
investment company desiring to offer multiple classes pursuant
to said Rule adopt a plan setting forth the separate arrangement
and expense allocation of each class, and any related conversion
features or exchange privileges.

The Board, including a majority of the non-interested
Board members, of each of the investment companies, or series
thereof, listed on Schedule A attached hereto (each, a "Fund")
which desires to offer multiple classes has determined that the
following plan is in the best interests of each class
individually and the Fund as a whole:

1. CLASS DESIGNATION: Fund shares shall be divided
into Class A, Class B and Class I, except as otherwise indicated
on Schedule A hereto.

2. DIFFERENCES IN SERVICES: The services offered to
shareholders of each Class shall be substantially the same,
except that Right of Accumulation and Letter of Intent shall be
available only to holders of Class A shares, the Reinstatement
Privilege shall be available only to holders of Class A and
Class B shares and the Check Redemption Privilege shall be
available only to holders of Class A shares of the money market
funds enumerated on Schedule A hereto (the "Money Market
Funds").
3. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS: Class A
shares of each Fund, other than the Money Market Funds, shall be
offered with a front-end sales charge, as such term is defined
in Article III, Section 26(b), of the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. , and a
deferred sales charge (a "CDSC"), as such term is defined in
said Section 26(b), may be assessed on certain redemptions of
Class A shares of such Funds purchased without an initial sales
charge as part of an investment of $1 million or more. The
amount of the sales charge and the amount of and provisions
relating to the CDSC pertaining to the Class A shares of such
Funds are set forth on Schedule B hereto.

Class B shares shall not be subject to a front-end
sales charge, but shall be subject to a CDSC and shall be
charged an annual distribution fee under a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. The amount
of and provisions relating to the CDSC, and the amount of the
fees under the Distribution Plan pertaining to the Class B
shares, are set forth on Schedule C hereto.

Class I shares shall be offered at net asset value
with no front-end sales charge or CDSC. Class I shares shall be
offered exclusively to qualified trust, custody and/or agency
account clients of The First National Bank of Chicago, American
National Bank and Trust Company or their affiliates ("Fiduciary
Accounts") and qualified benefit plans or other programs with
assets in excess of $100 million.

Class A and Class B shares shall be subject to an
annual service fee at the rate of .25% of the value of the
average daily net assets of such Class pursuant to a Shareholder
Services Plan.

4. EXPENSE ALLOCATION. The following expenses shall
be allocated, to the extent practicable, on a Class-by-Class
basis: (a) fees under the Distribution Plan and Shareholder
Services Plan; (b) printing and postage expenses related to
preparing and distributing materials, such as shareholder
reports, prospectuses and proxies, to current shareholders of a
specific Class; (c) Securities and Exchange Commission and Blue
Sky registration fees incurred by a specific Class; (d) fees and
expenses of an administrator that are identified and approved by
the Fund's Board as being attributable to a specific Class; (e)
the expense of administrative personnel and services as required
to support the shareholders of a specific Class; (f) litigation
or other legal expenses or audit or other accounting expenses
relating solely to a specific Class; (g) transfer agent fees
identified by the Fund's transfer agent as being attributable to
a specific Class; and (h) Board members' fees incurred as a
result of issues relating to a specific Class.

5. CONVERSION FEATURES. Class B shares shall
automatically convert to Class A shares after a specified period
of time after the date of purchase, based on the relative net
asset value of each such Class without the imposition of any
sales charge, fee or other charge as set forth on Schedule D
hereto. Class I shares held by investors who after purchasing
Class I shares withdraw from their Fiduciary Accounts shall
automatically convert to Class A shares, based on the relative
net asset value of each such Class without the imposition of any
sales charge, fee or other charge. Class A shares held by
investors who after purchasing Class A shares establish a
Fiduciary Account shall automatically convert to Class I shares,
based on the relative net asset value of each such Class without
the imposition of any sales charge, fee or other charge.

6. EXCHANGE PRIVILEGES. Shares of a Class shall be
exchangeable only for shares of the same Class of other
investment companies advised by First Chicago Investment
Management Company or its affiliates.

Dated: March 29, 1995

<PAGE>
SCHEDULE A

Prairie Funds:
Managed Assets Income Fund
Class A, B and I
Managed Assets Fund
Class A, B and I
Equity Income Fund
Class A, B and I
Growth Fund
Class A, B and I
Special Opportunities Fund
Class A, B and I
International Equity Fund
Class A, B and I
Bond Fund
Class A, B and I
International Bond Fund
Class A, B and I
Intermediate Municipal Bond Fund
Class A, B and I
U.S. Government Money Market Fund
Class A
Money Market Fund
Class A and B*
Municipal Money Market Fund
Class A

Prairie Intermediate Bond Fund
Class A, B and I

Prairie Municipal Bond Fund, Inc.
Class A, B and I

*Class B shares of this Fund may be acquired only through the
exchange of Class B shares of the other Funds set forth on this
Schedule and shall be subject to the CDSC, if any, of the shares
with which the exchange is made. See Schedule C hereto.

<PAGE>
SCHEDULE B

FRONT-END SALES CHARGE--CLASS A SHARES--The public offering
price for Class A shares shall be the net asset value per share
of that Class plus a sales load as shown below:

(A) FOR MANAGED ASSETS INCOME FUND, MANAGED ASSETS FUND, EQUITY
INCOME FUND, GROWTH FUND, SPECIAL OPPORTUNITIES FUND,
INTERNATIONAL EQUITY FUND, BOND FUND, INTERNATIONAL BOND
FUND, AND PRAIRIE MUNICIPAL BOND FUND, INC.

TOTAL SALES LOAD
AS A %
OF AS A % OF

OFFERING NET ASSET
PRICE
PER VALUE PER
AMOUNT OF TRANSACTION SHARE

<S> <C>

<C>
Less than $50,000 . . . . . . 4.50

4.70

$50,000 to less than $100,000 4.00

4.20

$100,000 to less than $250,000 3.00

3.10

$250,000 to less than $500,000 2.00

2.00

$500,000 to less than $1,000,000 1.50

1.50

$1,000,000 and above None

None

</TABLE>

(B) FOR PRAIRIE INTERMEDIATE BOND FUND AND INTERMEDIATE

MUNICIPAL BOND FUND

TOTAL SALES LOAD
AS A
% OF AS A % OF

OFFERING OFFERING
PRICE
PER PRICE PER

SHARE SHARE

<S> <C>

<C>
Less than $50,000 . . . . . .
3.00 3.10

$50,000 to less than $100,000
2.50 2.60

$100,000 to less than $250,000
2.00 2.00

$250,000 to less than $500,000
1.50 1.50

$500,000 to less than $1,000,000
1.00 1.00

$1,000,000 and above
None None

</TABLE>

CONTINGENT DEFERRED SALES CHARGE--CLASS A SHARES--A CDSC shall
be assessed at the time of redemption of Class A shares
purchased without an initial sales charge as part of an
investment of at least $1,000,000 at the following rates for the
indicated time periods:

Amount of CDSC as a % of Year Since
Transaction at Amount Invested or Purchase
Offering Price Redemption Proceeds Payment Was
Made

<S> <C> <C>
$1,000,000 to 1.00 First or
Second
less than $2,500,000

$2,500,000 to less 0.50 First
than $5,000,000

$5,000,000 and above 0.25 First

</TABLE>

The terms contained in Schedule C pertaining to the CDSC
assessed on redemptions of Class B shares (other than the amount
of the CDSC and its time periods), including the provisions for
waiving the CDSC, shall be applicable to the Class A shares
subject to a CDSC. Letter of Intent and Right of Accumulation
shall apply to such purchases of Class A shares.

<PAGE>
SCHEDULE C

CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES--A CDSC payable
to the Fund's Distributor shall be imposed on redemptions of
Class B shares depending on the number of years such shares were
held by the investor.

CDSC AS A % OF
YEAR SINCE AMOUNT INVESTED
PURCHASE PAYMENT OR REDEMPTION
WAS MADE PROCEEDS

First . . . . . . . . . . . . 5.00

Second. . . . . . . . . . . . 4.00

Third . . . . . . . . . . . . 3.00

Fourth. . . . . . . . . . . . 3.00

Fifth . . . . . . . . . . . . 2.00

Sixth . . . . . . . . . . . . 1.00

Seventh . . . . . . . . . . . None

Eighth. . . . . . . . . . . . *

________________
* Conversion to Class A shares.

(B) FOR PRAIRIE INTERMEDIATE BOND FUND AND INTERMEDIATE
MUNICIPAL BOND FUND

YEAR SINCE CDSC AS A % OF
PURCHASE PAYMENT AMOUNT INVESTED
WAS MADE OR REDEMPTION
PROCEEDS

First . . . . . . . . . . . . 3.00

Second. . . . . . . . . . . . 3.00

Third . . . . . . . . . . . . 2.00

Fourth. . . . . . . . . . . . 2.00

Fifth . . . . . . . . . . . . 1.00

Sixth . . . . . . . . . . . . None

Seventh . . . . . . . . . . . *

__________________
* Conversion to Class A shares.

In determining whether a CDSC is applicable to a
redemption, the calculation shall be made in a manner that
results in the lowest possible rate. Class B shares redeemed
shall not be subject to a CDSC to the extent that the value of
such shares represents capital appreciation or reinvestment of
dividends or distributions. Therefore, it shall be assumed that
the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and
distributions or representing any capital appreciation in the
value of the Class B shares held by the investor; then of Class
B shares held for the longest period of time.

WAIVER OF CDSC--The CDSC shall be waived in connection with (a)
redemptions made within one year after the death of the
shareholder, (b) redemptions by shareholders after age 70-1/2
for purposes of the minimum required distributions from an IRA,
Keogh plan or custodial account pursuant to Section 403(b) of
the Internal Revenue Code of 1986, as amended, (c) distributions
from a qualified plan upon retirement, (d) redemptions of shares
acquired through a contribution in excess permitted amounts, (e)
redemptions by clients of certain administrators of tax
qualified plans, employee benefit plans of companies with more
than 750 employees, tax qualified plans when the proceeds from
repayment of loans to participants are invested (or reinvested)
in the Fund, and (f) redemptions initiated by a Fund of accounts
with net assets of less than $500.

AMOUNT OF DISTRIBUTION PLAN FEES--CLASS B SHARES--.75 of 1% of
the value of the average daily net assets of Class B.

<PAGE>
SCHEDULE D

CONVERSION OF CLASS B SHARES--Approximately eight years after
the date of purchase (seven years for Prairie Intermediate Bond
Fund and the Intermediate Municipal Bond Fund), Class B shares
automatically shall convert to Class A shares, based on the
relative net asset values for shares of each such Class, and
shall no longer be subject to fees under the Distribution Plan.
At that time, Class B shares that have been acquired through the
reinvestment of dividends and distributions ("Dividend Shares")
shall be converted in the proportion that a shareholder's Class
B shares (other than Dividend Shares) converting to Class A
shares bears to the total Class B shares then held by the
shareholder which were not acquired through the reinvestment of
dividends and distributions.