CHAPMAN FUNDS INC, 485BPOS, 1996-02-28

CHAPMAN FUNDS INC
485BPOS, 1996-02-28

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BA3DOCS1/0032472.01
<PAGE>

As filed with the Securities and Exchange Commission on February
28, 1996.
Registration Nos. 33-25716
811-5697
_________________________________________________________________
___________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
X Post Effective Amendment No.9
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT TO COMPANY ACT OF
1940
X Amendment No. 11
THE CHAPMAN FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (800)
752-1013

Nathan A. Chapman, Jr., President
The Chapman Funds, Inc.
401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering
Continuous

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

X immediately upon filing pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a) (1)

75 days after filing pursuant to paragraph (a) (2)

on _________________ pursuant to paragraph (b)

on pursuant to paragraph (a) (1)

on pursuant to paragraph (a) (2)of Rule 485

Registrant has previously registered an indefinite number of
securities under the Securities Act of 1933 pursuant to Section
(a) (1) of Rule 24f-2 under the Investment Company Act of 1940,
as amended. Registrant's Rule 24f-2 Notice for the fiscal year
ended October 31, 1995 was filed with Securities and Exchange
Commission on December 29, 1995.
Page 1 of 37
Exhibit List on Page 36
<PAGE>

THE CHAPMAN FUNDS, INC.

Registration Statement on Form N-1A

CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933

N-1A Item No. Location

Part A Prospectus Caption

Item 1. Cover Page...................................... Cover
Page

Item 2. Synopsis..........................................
Fund Expenses

Item 3. Condensed Financial
Information...................................... Financial
Highlights

Item 4. General Description of
Registrant........................................
Investment Program
Other Information -
Capital Stock

Item 5. Management of the Fund................ Management;
Other
Information -
Transfer Agent;
Dividends and Taxes

Item 6. Capital Stock and Other
Securities......................................... Other
Information -
Capital Stock

Item 7. Purchase of Securities Being
Offered............................................
Management; Net
Asset Value;
Purchase of Shares;
Exchanges;
Redemption of Shares

Item 8. Redemption or Repurchase............. Purchase of
Shares;
Exchanges;
Redemption of Shares

Item 9. Pending Legal Proceedings............. Not Applicable

<PAGE>

N-1A Item No. Location

Part B Statement of Additional
Information Caption

Item 10. Cover Page.................................... Cover
Page

Item 11. Table of Contents.......................... Table of
Contents

Item 12. General Information and
History...........................................
Not Applicable

Item 13. Investment Objectives and
Policies..........................................
Investment Program

Item 14. Management of the Registrant...... Management

Item 15. Control Persons and Principal
Holders of Securities..................... Capital
Stock;
Principal Holders of
Securities

Item 16. Investment Advisory and Other
Services.........................................
Management;
Independent Auditors

Item 17. Brokerage Allocation.................... Portfolio
Transactions

Item 18. Capital Stock and Other
Securities.......................................
Capital Stock

Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered..........................................
Purchase of Shares; Exchanges;
Registration of Shares;
Net Asset Value

Item 20. Tax Status..................................... Taxes

Item 21. Underwriters..................................
Management

Item 22. Calculation of Performance
Data...............................................
Yield

Item 23. Financial Statements..................... Financial
Statements

<PAGE>

Part C

Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Registration
Statement.

<PAGE>

THE CHAPMAN FUNDS, INC.

PROSPECTUS

WORLD TRADE CENTER - BALTIMORE
401 EAST PRATT STREET, 28TH FLOOR
BALTIMORE, MARYLAND 21202
(410) 625-9656 (800) 752-1013

<PAGE>

THE CHAPMAN FUNDS, INC.
World Trade Center - Baltimore
401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202

Prospectus February 28, 1996

The Chapman Funds, Inc. (the "Company") is an open-end,
diversified management investment company which offers two money
market funds (each a "Fund"). Both Funds seek as high a level
of current income as is consistent with preservation of capital
and maintenance of liquidity. There is no assurance that either
Fund's objective will be achieved.

The Chapman US Treasury Money Fund invests solely in short-term
direct obligations of the U.S. Government and repurchase
agreements collateralized fully by direct obligations of the U.S.
Government. It is intended primarily for state and local
governments and their authorities and agencies.

The Chapman Institutional Cash Management Fund invests in
short-term money market securities, including U.S. Government
obligations, commercial paper, bank instruments and repurchase
agreements. It is intended primarily for corporations, pension
and endowment funds and other institutions.

Investors may purchase or redeem shares in either Fund without
charge. Both funds seek to maintain a net asset value of $1 per
share. The minimum initial investment for each Fund is
$1,000,000. Individuals may not purchase shares in either Fund.

An investment in the Funds is neither insured nor guaranteed by
the U.S. Government. There can be no assurance that the Funds
will be able to maintain a stable net asset value of $1 per
share.

Chapman Capital Management, Inc. is the Funds' investment advisor
and manager. It is a subsidiary of The Chapman Co., the only
minority controlled full service securities firm headquartered in
Maryland. Shares are distributed by The Chapman Co. (the
"Distributor").

This Prospectus sets forth concisely the information concerning
the Funds that a prospective investor should know before
investing. It should be read and retained for future reference.
A Statement of Additional Information dated February 28, 1996
containing additional information about the Company and the Funds
has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus. It may be
obtained without charge by writing or calling the Distributor.
<TABLE>
<CAPTION>
TABLE OF CONTENTS

Fund Expenses 2 Redemption of Shares 10
Financial Highlights 3 Net Asset Value
11
Investment Program 4 Dividends and Taxes 11
Management 7 Yield 12
Purchase of Shares 9 Other Information 12
Exchanges 10
</TABLE>

<PAGE>

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.

FUND EXPENSES

The following table illustrates the expenses and fees incurred by
each Fund. The U.S. Treasury Money Fund expenses and fees set
forth in the table are for the period November 1, 1994 to October
31, 1995 and are expressed as a percentage of fiscal 1995 average
daily net assets. The Institutional Cash Management Fund
expenses and fees are estimated as there was no activity for the
period November 1, 1994 to October 31, 1995.

The Chapman The
Chapman
US Treasury
Institutional Cash
Money Fund Management
Fund

<S> <C> <C> <C>
Shareholder Transaction Expenses:
Sales load on purchases None None
Sales load on reinvested
dividends None None
Deferred sales charge None None
Redemption fees None None
Exchange fees None None

Annual Fund Operating Expenses:
Management fee .50% .50%
12b-1 fees None None
Administration fee .10% .10%
Other expenses (after reimbursement) .15%*
.15%*

Net Fund Expenses After
Expense Reimbursement .75%* .75%*

</TABLE>

*The Advisor has agreed to bear annual expenses (excluding
income, excise and other taxes and extraordinary expenses) of
each Fund in excess of .75% of average daily net assets until
December 31, 1996. The Advisor's obligation will be limited to
the total of its advisory and administration fees. The actual
expenses of The Chapman US Treasury Money Fund prior to
reimbursement of expenses was 0.97% of average daily net assets.
The actual other expenses of The Chapman US Treasury Money Fund
prior to reimbursement of other expenses was .37% of average
daily net assets. During fiscal year 1991, the Institutional
Cash Management Fund liquidated its portfolio and distributed the
proceeds to its shareholders. There has been no activity,
including subscriptions for purchases of shares, in the Cash
Management Fund since that time. However, the Cash Management
Fund is still authorized to sell shares to investors meeting the
qualifications of the Fund prospectus.

<PAGE>

Example: The Funds' expenses are illustrated below assuming a
hypothetical $1,000 investment, a 5% annual return, and
reinvestment at the end of each period. The expense table for
the U.S. Treasury Money Fund is based upon net expenses of .75%
of average daily net assets through December 31, 1996 and actual
expenses, as described above, thereafter. The expense table for
The Chapman Institutional Cash Management Fund is based upon net
expenses of .75% of average daily net assets for the entire ten
year period. Earnings for each Fund would be reduced by
operating expenses as follows:

The Chapman The
Chapman
US Treasury
Institutional Cash
Money Fund Management
Fund

<S> <C> <C>
One Year $ 8 $ 8
Three Years $ 28 $ 24
Five Years $ 51 $ 42
Ten Years $118 $ 93
</TABLE>

The purpose of this table is to assist current and prospective
stockholders in understanding the various costs and expenses
that an investor in the Funds will bear, directly or indirectly.
It is only an illustration and should not be considered as
representative of actual or expected future performance or
expenses. The actual performance and expenses may be greater or
less than those shown.
<PAGE>

THE CHAPMAN FUNDS, INC.

FINANCIAL HIGHLIGHTS

The following tables include selected data for a share outstanding
throughout each period and other performance information derived from the
financial statements. They should be read in conjunction with the Company's
audited financial statements, the notes thereto, and auditor's report thereon,
all of which are included in the Company's Statement of Additional Information.

US TREASURY MONEY FUND YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
Period June 1, 1989*
OCTOBER 31, 1995OCTOBER 31, 1994 OCTOBER 31, 1993OCTOBER 31,
1992 OCTOBER 31, 1991 OCTOBER 31, 1990 to October 31, 1989

</TABLE>

Per Share Operating Performance:
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
$1.00 $1.00
Income from Investment Operations:
Net investment income0.0497 0.0294 0.0241 0.0315 0.0619 0.0705 0.0318
Distributions:
From net investment income 0.0497 0.0294 0.0241 0.0315 0.0619 0.0705
0.0318
Net asset value, end of period$1.00 $1.00 $1.00 $1.00 $1.00 $1.00
$1.00
Total Return 5.09% 3.04% 2.44% 3.20% 6.37% 7.28% 3.22%**
Ratios/Supplemental Data:
Net Assets, end of period (000 omitted)$34,371 $20,011 $23,515 $33,002 $12,229
$29,034 $37,330
Ratios to Average Net Assets:
Expenses **** 0.75% 0.75% 0.75% 0.75% 0.75% 0.74% 0.27%**
Net investment income5.02% 2.94% 2.41% 3.15% 6.19% 6.97% 2.97%**
Expenses Prior to Reimbursement by Advisor 0.97% 1.12% 1.15% 1.02% 1.13%
1.05% 0.38%**

</TABLE>

<PAGE>

INSTITUTIONAL CASH MANAGEMENT FUND***
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDEDPeriod June 1,
1989*
OCTOBER 31, 1995OCTOBER 31, 1994 OCTOBER 31, 1993OCTOBER 31,
1992 OCTOBER 31, 1991OCTOBER 31, 1990 to October 31, 1989

Per Share Operating Performance:
Net asset value, beginning of period -- -- -- -- $1.00
$1.00 $1.00
Income from Investment Operations:
Net investment income -- -- -- -- 0.0697 0.0762
0.0340
Distributions:
From net investment income -- -- -- -- 0.0697 0.0762
0.0340
Net asset value, end of period -- -- -- -- $1.00 $1.00
$1.00
Total Return -- -- -- -- 7.20% 7.89% 3.45%**
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) -- -- -- -- --
$25,000 $25,000

Ratios to Average Net Assets:
Expenses **** -- -- -- -- 0.75% 0.74% 0.28%**
Net investment income -- -- -- -- 6.97% 7.55%
2.36%**
Expenses Prior to Reimbursement by Advisor-- -- -- -- 1.14%
1.14% 0.41%**

* Commencement of Operations.
**These amounts have not been annualized.
***During fiscal year 1991, The Institutional Cash Management Fund liquidated
its portfolio and distributed the proceeds to its shareholders. There has been
no activity in The Institutional Cash Management Fund since that time.
**** Chapman Capital Management, Inc. (the "Advisor") agreed to bear all
expenses (excluding income, excise and other taxes and extraordinary expenses)
of the Fund in excess of .75% of average daily net assets on an annual basis.

</TABLE>
<PAGE>

INVESTMENT PROGRAM

Investment Objectives

The Chapman US Treasury Money Fund seeks as high a level of
current income as is consistent with maximum safety of principal
and maintenance of liquidity. It will invest solely in US
Treasury securities and repurchase agreements collateralized
fully by such securities. It is considered diversified under the
Investment Company Act of 1940.

The Chapman Institutional Cash Management Fund seeks as high a
level of current income as is consistent with preservation of
capital and maintenance of liquidity. To achieve its objectives,
it will invest in a diversified portfolio of high quality,
domestic government, bank and commercial money-market
instruments.

Investments

The money-market instruments in which the Funds may invest are
described below. The Chapman US Treasury Money Fund will invest
only in US Treasury securities and repurchase agreements
collateralized fully by US Treasury securities.

Each Fund will invest only in securities that mature in 397 days
or less and will maintain a dollar-weighted average maturity of
90 days or less. Both Funds have a policy of maintaining a net
asset value of $1 per share, but there is no assurance they will
be able to do so at all times.

The Chapman Institutional Cash Management Fund will limit its
portfolio investments to U.S. dollar-dominated instruments that
its Board of Directors determines present minimal credit risk
(based on factors in addition to the rating assigned to the
security by the rating agency) and which are eligible securities
(as defined in Rule 2a-7 under the Investment Company Act of
1940) at the time of acquisition. Eligible securities include
those rated in one of the two highest rating categories for short-
term debt obligations by two nationally recognized statistical
rating organizations or, if only one such rating organization has
issued a rating, by that rating organization. Eligible
securities may also include unrated securities of comparable
quality as determined by the Company's Board of Directors.

At least 95% of the total assets of The Chapman Institutional
Management Fund will be invested in eligible securities which are
first tier securities (as defined in Rule 2a-7). First tier
securities include eligible securities rated in the highest
rating category for short-term debt obligations by two nationally
recognized statistical rating organizations or, if only one such
rating organization has issued a rating, by that rating
organization. First tier securities may also include unrated
securities of comparable quality as determined by the Company's
Board of Directors. The Chapman Institutional Cash Management
Fund may invest up to 5% of its total assets in eligible
securities which are not first tier securities, but not more than
the greater of 1% of its total assets or $1,000,000 may be
invested in eligible securities of any issuer which are not first
tier securities.

The Chapman Institutional Cash Management Fund will not invest
more than 5% of its total assets in securities (other than
government securities) issued by a single issuer, although it may
do so for up to three business days. The limitations in this
paragraph and the preceding one apply to the securities
underlying a repurchase agreement, rather than to the
counterparty to the repurchase agreement.

Government Securities are marketable securities which are direct
obligations of or are guaranteed by the U.S. Government or its
agencies or instrumentalities.

<PAGE>

US Treasury bills, notes and bonds are direct obligations of the
U.S. Government. Treasury bills mature in one year or less,
Treasury notes mature in one to ten years and Treasury bonds
mature after more than ten years. The Funds will invest in
Treasury bills, notes and bonds having a maturity or remaining
maturity of one year or less.

Bank instruments are limited to certificates of deposit, banker's
acceptances and fixed time deposits. A certificate of deposit is
a short-term negotiable certificate issued by a bank, savings
bank or savings and loan association against deposited funds
which is either interest-bearing or purchased on a discount
basis. Certificates of deposit may have variable interest rates
which are periodically adjusted prior to maturity based upon a
designated market rate.

A bankers' acceptance is a time draft drawn on a commercial bank
usually by a commercial borrower in connection with international
commerce. The borrower is liable for payment, as is the bank,
which unconditionally guarantees to pay the draft at face amount
at maturity, usually within six months.

A fixed time deposit is an obligation of a bank, savings bank or
savings and loan association which is payable at a stated
maturity date and bears a fixed rate of interest. Although fixed
time deposits do not have a market, there are no contractual
restrictions on the right to transfer a beneficial interest in
the deposit to a third party. The Chapman Institutional Cash
Management Fund will not invest more than 10% of its net assets
in fixed time deposits having a maturity of more than seven days
and other securities which are not readily marketable.

The Chapman Institutional Cash Management Fund will invest in
instruments of U.S. banks, savings banks and savings and loan
associations having total assets of at least $1 billion and in
dollar-denominated instruments of U.S. branches of foreign banks,
if the foreign bank has total assets of at least $1 billion or
the equivalent in other currencies. Although obligations of
savings banks and savings and loan associations and U.S. branches
of foreign banks may be higher yielding than obligations of U.S.
banks, investment in these obligations may involve greater risk.
These risks may include less extensive regulation, supervision
and examination of, and limited public availability of
information concerning, U.S. branches of foreign banks.
Obligations of U.S. branches of foreign banks may be limited
obligations of the U.S. branches and may not necessarily be
insured by the Federal Deposit Insurance Corporation.

Obligations of U.S. Government agencies and instrumentalities are
not obligations of the U.S. Government, although in some cases
payment of interest and principal on these obligations is
guaranteed by the U.S. Government. Examples of these securities
include those issued by or guaranteed by the Government National
Mortgage Association, the Export-Import Bank, The Federal Farm
Credit System, the Federal Home Loan Bank, the Federal Home Loan
Mortgage Corporation, the Federal Intermediate Credit Banks, the
Federal Land Banks, the Federal National Mortgage Association and
the Student Loan Marketing Association.

There is no limitation on the portion of the assets of The
Chapman Institutional Cash Management Fund which may be invested
in obligations of U.S. banks. Not more than 5% of its total
assets may be invested in obligations of savings banks and
savings and loan associations and not more than 25% of its total
assets may be invested in obligations of U.S. branches of
foreign banks.

Commercial Instruments are short-term unsecured promissory notes
issued by corporations to finance their short-term credit needs,
usually sold at discount with a maturity of less than nine
months. The Fund may invest in commercial instruments which are
issued under Section 4(2) of the Securities Act of 1933 and are
restricted as to disposition. The Fund will not invest more
than 10% of its net assets in such instruments and other
securities which are not readily marketable.
<PAGE>

Floating and Variable Rate Obligations include obligations
issued by or guaranteed by agencies or instrumentalities of the
U.S. Government, certificates of deposit and commercial
instruments. The rates on these instruments vary with changes
in a specified market rate or index, such as the prime rate, and
at specified intervals. Instruments of this type having
maturities exceeding 397 days may be purchased and will be
treated as having a maturity of less than one year if the
conditions of Rule 2a-7 under the Investment Company Act of 1940
are satisfied.

The Chapman Institutional Cash Management Fund will purchase
floating and variable rate obligations of issuers which meet the
requirements described previously. Certain floating and variable
rate obligations carry a demand feature that would permit the
holder to tender them back to the issuer or to a remarketing
agent prior to maturity, in most cases upon notice of seven days
or less. If the notice period exceeds seven days, the Board of
Directors will monitor on an ongoing basis the liquidity of the
demand instrument. The Fund's right to obtain payment at par on
a demand instrument could be affected by events occurring between
the date the Fund elects to demand payment and the date payment
is due that may affect the ability of the issuer of the
instrument to make payment when due, except when such demand
instruments permit same day settlement. To facilitate
settlement, these same day demand instruments may be held in book
entry form at a bank other than the Fund's custodian subject to
a sub-custodian agreement approved by the Company between that
bank and the Fund's custodian.

Repurchase Agreements involve the acquisition of an underlying
U.S. Government obligation, subject to an obligation of the
seller to repurchase, and the Fund to resell the instrument at an
agreed time and price. The Chapman US Treasury Money Fund will
only enter into repurchase agreements collateralized fully by US
Treasury securities. The resale price will reflect an agreed
upon market rate effective for the period of time the Fund's
money will be invested in the security and may not be related to
the coupon rate of the purchased security. At the time a Fund
enters into a repurchase agreement, the value of the underlying
security (reduced by the transaction costs, including loss of
interest, that the Fund reasonably could expect to incur if the
seller defaults) will at least be equal to the resale price
provided in the repurchase agreement, and, in the case of
repurchase agreements exceeding one day, the seller will agree
that the value of the underlying security, as similarly reduced,
will on each day at least be equal to the resale price provided
in the repurchase agreement. The Advisor will monitor compliance
with this requirement on an on-going basis. Repurchase
agreements entered into by the Funds will generally have a term
of not more than seven days from purchase, although the
underlying securities may have longer terms.

The Funds will enter into repurchase agreements only with primary
dealers in U.S. Government securities or with U.S. banks with
total assets of at least $1 billion. The Funds will consider on
an ongoing basis the credit worthiness of the institutions with
which they enter into repurchase agreements. If the seller under
a repurchase agreement fails to repurchase the obligation in
accordance with the agreement, the Fund could experience losses
that may include possible decline in the value of the underlying
security during the period the Fund seeks to enforce its rights,
additional expenses, possible loss of income or proceeds of the
repurchase, and possible delay in the disposition of the
underlying security pending court action. Repurchase agreements
are considered to be loans under the Investment Company Act of
1940, collateralized by the underlying securities.

Reverse Repurchase Agreements involve the sale of portfolio
securities and an agreement to repurchase them from the buyer at
a particular date and price. The Chapman US Treasury Money Fund
will not enter into reverse repurchase agreements. The Chapman
Institutional Cash Management Fund will use reverse repurchase
agreements only when necessary to meet unanticipated net
redemptions so as to avoid liquidating portfolio securities
during adverse market conditions when the
<PAGE>

income on the portfolio securities which would otherwise be
liquidated to meet redemptions is greater than the interest
expense incurred as a result of the reverse purchase
transactions.

When The Chapman Institutional Cash Management Fund enters into a
reverse repurchase agreement, its Custodian will establish a
segregated account in which it will maintain liquid assets in an
amount at least equal to the repurchase price marked to market
daily (including accrued interest). The Fund will subsequently
monitor the account to ensure that such equivalent value is
maintained. The Fund pays interest on amounts obtained pursuant
to reverse repurchase agreements. Reverse repurchase agreements
are considered to be borrowings by the Fund and the use of
reverse repurchase agreements is considered a form of leveraging
under the Investment Company Act of 1940. Reverse repurchase
agreements may involve the risk that the market value of the
securities sold may decline below the price at which the Fund is
obligated to repurchase. The Fund will enter into reverse
repurchase agreements only with primary dealers in U.S.
Government securities.

Investment Limitations

The Funds may not issue senior securities, borrow money or pledge
or mortgage their assets, except as described below. The Funds
may borrow money from banks for temporary purposes in amounts up
to 25% of the current value of their total assets. The Chapman
Institutional Cash Management Fund may enter into reverse
repurchase agreements in accordance with its investment policies
for temporary purposes and in amounts that combined with bank
borrowings do not exceed 25% of the current value of its total
assets. A Fund will not purchase additional portfolio securities
while borrowings and reverse repurchase agreements exceed 5% of
the Fund's total assets. The Funds may not lend money or
securities except to the extent that investments may be
considered loans.

Because The Chapman US Treasury Fund will invest only in U.S.
Treasury securities, and repurchase agreements fully
collateralized by U.S. Treasury securities, it will not invest
more than 25% of its assets in investments in any industry. The
Chapman Institutional Cash Management Fund may not invest more
than 5% of the current value of its total assets in any one
issuer, except the U.S. Government and its agencies and
instrumentalities, and may not invest more than 25% of the
current value of its total assets in securities of issuers
conducting their principal business activities in the same
industry. The Chapman Institutional Cash Management Fund reserves
freedom of action to invest more than 25% of its assets in
obligations of domestic branches of domestic banks. There is no
limit on the portion of the Fund's assets which may be invested
in obligations of U.S. banks. The Fund may not invest more than
5% of its total assets in obligations of savings banks and
savings and loan associations and not more than 25% of its total
assets in obligations of U.S. branches of foreign banks.

Neither Fund may invest more than 10% of its net assets in
securities that are not readily marketable, including securities
restricted as to disposition under the Securities Act of 1933,
repurchase agreements having maturities of more than seven days,
fixed time deposits subject to withdrawal penalties having
maturities of more than seven days and floating and variable rate
obligations if the demand feature has a notice period of more
than seven days.

The Chapman US Treasury Money Fund's investment objectives and
its policy of limiting investments to U.S. Treasury securities
and repurchase agreements fully collateralized by U.S. Treasury
securities, and the investment policies and limitations of both
Funds set forth in the preceding paragraphs under this caption
are fundamental policies that may be changed only with
stockholder approval.

Additional information concerning the Funds' investment
activities is provided in the Statement of Additional
Information.

<PAGE>

MANAGEMENT

Board of Directors

The Company is managed by its Board of Directors. All of the
directors are members of minority groups. The Board of Directors
approves all significant agreements between each Fund and persons
who furnish services to the Fund, including the Fund's agreements
with the Advisor and the Distributor. The Board of Directors
delegates to the Company's officers and the Advisor
responsibility for day-to-day operations of the Funds. All of
the officers of the Company are directors, officers or employees
of the Advisor or the Distributor.
<PAGE>

The Advisor

Chapman Capital Management, Inc. was registered as an investment
advisor under the Investment Advisers Act of 1940 in August 1988.
The Advisor is responsible for supervision and management of the
Funds' operations and formulation and implementation of the
Funds' investment policies. It is also responsible for
administration of the Funds, including executive management,
office facilities and administrative services.

The Advisor has acted as investment advisor to the Funds since
May 1989. Prior to May 1991 the Advisor delegated its investment
advisory and management responsibilities to others. Since May
1991 the Advisor has provided these services to the Funds. The
Advisor does not have other experience in managing investment
companies.

The Advisor is a wholly-owned subsidiary of The Chapman Co., the
Funds' distributor. The Chapman Co. is the only minority
controlled full service securities firm headquartered in
Maryland. It has qualified as a minority business enterprise
under various state and municipal regulations. Nathan A.
Chapman, Jr. owns 63% of the equity and has the right to cast 71%
of the votes entitled to be cast by stockholders of The Chapman
Co. The Advisor's address is World Trade Center - Baltimore, 401
East Pratt Street, 28th Floor, Baltimore, Maryland 21202.

The Distributor

The Chapman Co. is the exclusive distributor for each Fund. It is
a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc. The Chapman Co.
processes investor purchase and redemption orders, responds to
inquiries from stockholders of the Funds concerning their
accounts and the Funds' operations and communicates with the
Company and the Transfer Agent on behalf of the Funds'
stockholders. The Distributor does not receive a fee or
reimbursement of expenses from the Funds or their stockholders in
connection with sales of the Funds' shares. The Advisor may make
payments to the Distributor and the Distributor may make payments
to other broker-dealers in connection with the sale of Fund
shares.

Expenses

The Advisor bears all expenses in connection with the performance
of its advisory and administrative services. The Fund bears all
other expenses incurred in its operations. These include the
Advisor's management and administration fees, taxes, fees of its
directors who are not officers, costs of directors meetings,
fees payable to the Securities and Exchange Commission, state
securities qualification fees, costs of preparing and printing
prospectuses for existing stockholders, fees and expenses of the
Custodian and Transfer Agent, certain insurance costs, costs of
the Company's membership in the Investment Company Institute,
auditing and legal expenses, costs of stockholder reports and
meetings, and any extraordinary expenses. The Funds also pay for
brokerage fees and commissions in connection with the purchase
and sale of portfolio securities. Expenses which are not
attributable solely to one of the Funds are allocated between
them in proportion to the net assets of each Fund. All expenses
were borne by the U.S. Treasury Money Fund in fiscal year 1995 as
The Cash Management Fund had no activity during the year.

The Advisor has agreed to bear annual expenses (excluding income,
excise and other taxes and extraordinary expenses) of each Fund
in excess of .75% of average daily net assets until December 31,
1996. The Advisor's obligation will be limited to the total of
its advisory and administration fees.
<PAGE>

Brokerage

The Chapman Co. may effect brokerage transactions for the Funds
in compliance with the requirements of the Investment Company Act
of 1940.

PURCHASE OF SHARES

Shares of each Fund are sold without sales charge by the
Distributor at net asset value, normally $1 per share, on each
day the New York Stock Exchange is open for business. The
Chapman US Treasury Money Fund is intended primarily for state
and local governments and their authorities and agencies. The
Chapman Institutional Cash Management Fund is intended primarily
for corporations, pension and endowment funds and other
institutions. Fund shares may not be purchased by individuals.
The minimum initial investment for each Fund is $1,000,000.
There is no minimum for subsequent purchases. The initial
investment must be accompanied by an Application. The Company
reserves the right to reject any purchase order.

Each Fund's shares are sold at the net asset value per share of
the Fund next determined after an order is accepted by Chapman
Capital Management, Inc. ("The Transfer Agent") and federal funds
are received by the Transfer Agent. Stockholders begin earning
dividends on the day following the day on which the purchase
order for the shares is effective; provided, however, that if the
investor notifies the Fund by 12:00 p.m. (Eastern Time) of its
intention to wire payment and such wire payment is received by
the Transfer Agent by 4:00 p.m. (Eastern Time) the same day,
stockholders begin earning dividends on the same day the shares
are purchased.

Shares of each Fund may be purchased by telephone and bank wire
as follows:
(a) For an initial investment, an account
number should be obtained by calling the Transfer
Agent at (800) 752-1013. The following
information will be required: the name of the
fund, the name and address in which the account
will be registered, tax identification number, the
amount being wired and the identity of the wiring
bank.

(b) For additional investments, the Transfer
Agent should be advised by telephone of the name
of the fund, the name of the account, account
number, the amount of the investment and the
identity of the wiring bank.

(c) In either case, the investor's bank
should wire federal funds to the Transfer Agent.
The name of the fund, the name of the account and
account number of the investor should be included
in the wire. An investor's bank may impose a
charge for this service.

Shares may also be purchased by mail as follows:

(a) For initial investment, the Funds'
Application must be completed and signed.
(b) A check should be made payable to The
Chapman Funds. (indicate the name of the
particular fund)
(c) The Application and the check should be
sent to The Chapman Funds at the address set forth
on the cover page of this Prospectus.

Investors may purchase shares through registered broker-dealers.
Broker-dealers not affiliated with the Company or the Advisor may
charge a fee for processing orders on behalf of their customers.
Shares may be purchased from the Funds without payment of fees.
<PAGE>

Federal funds are monies held by a commercial bank on deposit in
one of the U.S. Federal Reserve branch banks. Dealers in the
securities in which the Funds will invest usually require
immediate payment in federal funds. Since a payment for the
purchase of shares cannot be invested until it is converted into
and available in federal funds, it must be so available before a
share purchase order can be considered effective.

If payment is transmitted by check, an order will not be
effective until received by the Transfer Agent and converted to
federal funds, normally within one business day for checks drawn
on a member of the Federal Reserve System. It would take longer
for most other checks. A request for redemption of shares
purchased by check will not be effective, and the redemption
proceeds will not be available, until the check has cleared,
which may take up to 15 days. During this period the shares will
continue to accrue dividends.

All purchases of Fund shares will be credited to the stockholder
in an account maintained for the stockholder by the Transfer
Agent in full and fractional shares of the Fund (rounded to the
nearest 1/1000th of a share). A monthly statement of account
will be mailed to the stockholder within five business days after
the end of each month.

EXCHANGES

Shares of one Fund may be exchanged for shares of the other Fund.
An exchange may be made by telephone to the Transfer Agent at
(800)752-1013 if the exchange is to an existing account and both
accounts are registered in the same name. Information concerning
exchanges in other circumstances is included in the Statement of
Additional Information and may be obtained by telephone from the
Distributor or the Transfer Agent. An exchange of shares will be
effected at the net asset value per share of each Fund, normally
$1 per share, next determined after receipt by the Transfer Agent
of a request for exchange and any required documentation.

During times of drastic economic or market changes, the exchange
privilege may be difficult to implement. A stockholder may
prefer to use express mail or commercial delivery.

An exchange of shares is treated for federal income tax purposes
as a redemption of the exchanged shares and a purchase of the
shares received. A capital gain or loss may be realized on the
transaction.

Exchanges will be required to meet the minimum initial investment
requirement of each Fund. There is no charge for an exchange.
The Funds will give stockholders at least 60 days' prior notice
if the exchange privilege is modified or terminated.

REDEMPTION OF SHARES

Investors may request redemption of shares at any time and the
shares will be redeemed at the next determined net asset value,
normally $1 per share. No charges are made when shares are
redeemed.

Shares may be redeemed by telephone or by wiring instructions
(which must include the stockholder's name and account number) to
the Transfer Agent. Telephone requests should be made to the
telephone number set forth on the cover page of this Prospectus.
Wire instructions should be sent to the Transfer Agent by
facsimile to the number provided by the Shareholder Servicing
Representative.

Payment will be made by the Transfer Agent to the stockholder's
bank account at any commercial bank designated by the stockholder
in the Application, or by check payable to the stockholder and
mailed to the address specified in the Application. There is
currently no charge to a stockholder for a wire transfer.
<PAGE>

The Transfer Agent will, at the request of stockbrokers who are
approved by the Company and who act as agents for stockholders in
effecting redemptions, wire redemption proceeds to the broker's
bank account for credit to the stockholder if the stockholder has
designated the broker's bank account for receipt of such payment
in the Application. Brokers may charge a fee for this service.

Shares may also be redeemed by mail, and must be redeemed by mail
when the proceeds are not to be sent to the stockholder at the
address set forth in the Application, or wired to the
stockholder's bank account designated in the Application.
Information concerning procedures for redeeming shares in these
circumstances is set forth in the Statement of Additional
Information and can be obtained by telephone from the Distributor
or the Transfer Agent.

Redemptions of a Fund's shares will be made at the net asset
value per share of the Fund, normally $1 per share, next
determined after receipt by the Transfer Agent of a redemption
request in proper form, including all required documentation.
Although each Fund attempts to maintain a constant net asset
value of $1 per share, if it should be unable to do so, the
proceeds of redemption may be more or less than the stockholder's
cost.

For redemption requests received prior to 12:00 p.m. (Eastern
time) on any business day, the redemption proceeds normally will
be available for payment to the shareholder on the same day. For
redemption requests received after 12:00 p.m. (Eastern time),
redemption proceeds will be available for payment to the
shareholder on such next business day.

The Funds will not effect redemptions and will not mail
redemption proceeds until checks received in payment for shares
purchased have cleared, which may take up to 15 days. This
provision will apply to certified and cashier's checks. During
this period shares will continue to accrue dividends.

NET ASSET VALUE

The net asset value of shares of each Fund is determined each day
as of the close of trading on The New York Stock Exchange,
presently 4:00 p.m. (Eastern Time). The New York Stock Exchange
is scheduled to be open Monday through Friday throughout the year
except for certain Federal and other holidays. Net asset value
per share of a Fund is calculated by adding the value of all
securities, cash and other assets of the Fund, subtracting the
liabilities, and dividing the result by the number of shares
outstanding. Income and expenses (including advisory and
administration fees) are accrued daily and taken into account in
computing net asset value. Both Funds use the amortized cost
method to value portfolio securities and seek to maintain a
constant net asset value of $1 per share. The Funds may not be
successful in maintaining a $1 net asset value at all times.

DIVIDENDS AND TAXES

All of the net income of each Fund is declared as a dividend
daily and paid monthly. Stockholders will be credited with a
dividend on the business day on which the purchase order for the
shares is effective, provided that the investor notifies the
Transfer Agent of its intention to invest by 12:00 p.m., and wire
payment is received by 4:00 p.m., and continues to earn dividends
through the day before the redemption order becomes effective,
for redemption requests received prior to 12:00 p.m. Dividends
are paid in additional shares of the Fund unless the investor has
elected prior to the payment date to receive cash.
<PAGE>

The Funds have qualified and intend to continue to qualify as
regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If so qualified,
the Funds will not be subject to federal income taxes on income
distributed to their stockholders. Stockholders, unless exempt,
will pay federal income taxes on dividends paid by the Funds,
whether received in cash or reinvested in additional shares. The
Funds will notify stockholders annually of the federal income tax
consequences of distributions made by the Funds.

Each Fund will be subject to a 4% nondeductible excise tax to the
extent the Fund does not meet certain distribution requirements
by the end of each calendar year. Each Fund intends to make
sufficient distributions to avoid application of this excise tax.

YIELD

From time to time the Funds may advertise or make available
information as to their "yield" and "effective yield." Both
yield figures are based on historical earnings and are not
intended to indicate future performance. The "yield" refers to
the income generated by an investment in a Fund over a seven-day
period. The period covered will be included in advertisements or
other publications. 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 except that, when annualized, the income
earned by the Funds is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.

OTHER INFORMATION

Capital Stock

The Company was incorporated in Maryland on November 22, 1988.
It is an open-end, diversified management investment company
under the Investment Company Act of 1940. The Company is
authorized to issue The Chapman US Treasury Money Fund shares and
The Chapman Institutional Cash Management Fund shares. The
Company's Board of Directors has authority under Maryland Law to
increase the number of authorized shares and under the Company's
charter to authorize additional classes of stock without
stockholder approval. All shares of each Fund, when issued, will
be fully paid and nonassessable.

All shares of the Company have equal voting rights and will be
voted in the aggregate, and not by class, except where class
voting is required by law or the matter affects only one class.
There is no provision for cumulative voting.

The Company is not required under Maryland law to hold annual
meetings of stockholders for the election of directors and
currently does not intend to do so. Stockholders have the right
to call for a meeting to consider the removal of one or more of
the Company's directors if the request is made in writing by the
holders of at least 10% of the Company's outstanding voting
securities. The Company will assist in calling the meeting as
required under the Investment Company Act of 1940.

On January 31, 1996 the Birmingham Fund owned 36%, City of
Philadelphia owned 16%, Maryland Teachers & State Employees
Supplemental Retirement Agency owned 8%, the State of Mississippi
owned 8%, Bank of New York as Trustee for Prince Georges County
owned 7%, and the Alabama State University, Invesco MIM, Howard
County, the Wisconsin Housing Economic Development Authority,
First National Bank as Trustee for Prince George's County, the
City of Baltimore, the State of Maryland, the City of Chicago,
the School District of Philadelphia, the Birmingham Retirement
and Relief System, the Retirement Plan for the Employees of the
Water Works and Sewer Board of the City of Birmingham, and the
Amended and Restated Industrial Water
<PAGE>

Board Employees' Retirement and Relief Plan owned the remaining
shares of the Chapman U.S. Treasury Money Fund. There were no
shares of The Chapman Institutional Cash Management Fund
outstanding on that date or during the period November 1, 1994
through October 31, 1995.

Stockholders of record will receive unaudited semi-annual reports
and an annual report containing financial statements audited by
independent auditors.

Stockholder Inquiries

Investors may write or call the Distributor or the Transfer Agent
at the addresses and telephone numbers on the front cover of this
Prospectus with any questions relating to their investment.

Custodian

United Missouri Bank, KC, 928 Grand Avenue, Kansas City, Missouri
64141-6226, serves as custodian for the Funds' portfolio
securities.

Transfer Agent

Chapman Capital Management, Inc., 401 East Pratt Street, 28th
Floor, Baltimore, Maryland 21202, serves as transfer agent and
dividend paying agent for the Funds' shares.
<PAGE>

THE CHAPMAN FUNDS, INC.

PROSPECTUS

February 29, 1996

Investment Advisor, Transfer Agent and Dividend Paying Agent

CHAPMAN CAPITAL MANAGEMENT, INC.
World Trade Center - Baltimore
401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202

Custodian

UNITED MISSOURI BANK, KC
928 Grand Avenue
Kansas City, Missouri 64141-6226

Distributor

THE CHAPMAN CO.
World Trade Center - Baltimore
401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202
(410) 625-9656

No person is authorized to make any
representations in connection with this offering other than those
included in this Prospectus or in supplemental sales literature
issued by the Fund or its Distributor.
<PAGE>

THE CHAPMAN FUNDS, INC.
World Trade Center - Baltimore
401 East Pratt Street, 28th Floor
Baltimore, Maryland 21202
Telephone: (410) 625-9656, (800) 752-1013

STATEMENT OF ADDITIONAL INFORMATION, February 28, 1996

The Chapman Funds, Inc. (the "Company"), is an open-end,
diversified management investment company which offers two money
market funds. The Chapman US Treasury Money Fund invests in U.S.
Treasury obligations and repurchase agreements fully
collateralized by such obligations. The Chapman Institutional
Cash Management Fund invests in high quality short-term money
market securities, including U.S. Government obligations, bank
instruments, commercial paper and repurchase agreements.

This Statement of Additional Information is not a prospectus and
is only authorized for distribution when preceded or accompanied
by the Company's prospectus dated February 28, 1996 (the
"Prospectus"). This Statement of Additional Information contains
additional information to that set forth in the Prospectus and
should be read in conjunction with the Prospectus. A copy of the
Prospectus may be obtained without charge by writing the Funds'
Distributor, The Chapman Co., World Trade Center - Baltimore, 401
East Pratt Street, 28th Floor, Baltimore, Maryland 21202, or
calling at (410) 625-9656, (800) 752-1013.

Table of Contents

<S> <C> <C> <C>
Investment Program 2 Dividends 10
Management 3 Taxes
10
Purchase of Shares 7 Yield
11
Exchanges 7 Capital Stock 11
Redemption of Shares 8 Counsel to the
Company 12
Portfolio Transactions 8 Experts
12
Net Asset Value 9 Financial Statements
12

</TABLE>

<PAGE>

INVESTMENT PROGRAM

The following information supplements the discussion of the
investment policies of the Funds found under "Investment Program"
in the Prospectus. Except for the investment objectives and
policies of The Chapman US Treasury Money Fund and the matters
specified under "Investment Limitations" in the Prospectus and
the Statement of Additional Information, all matters described
herein and in the Prospectus are not fundamental and may be
changed without the approval of stockholders.

Additional Information on Investments

Instruments of U.S. Branches of Foreign Banks

Domestic 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 be 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 obligations may be purchased by The Chapman Institutional
Cash Management Fund are insured by the FDIC (although such
insurance may not be of benefit to the Fund, depending upon the
nature and principal amount of the obligation of each bank held
by the Fund) and are subject to Federal examination and to a
substantial body of Federal law and regulation. As a result of
Federal and state laws and regulations, U.S. banks, among other
things, are generally required to maintain specified levels of
reserves, and are subject to other supervision and regulation
designed to promote financial soundness.

Obligations of U.S. 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 and by
Federal and state regulation as well as governmental action in
the country in which the foreign bank has its head office. In
addition, branches licensed by the Comptroller of the Currency
and branches licensed by certain states may or may not be
required to: (1) pledge to the regulator, by depositing assets
with a designated bank within the state, an amount of its assets
equal to 5% of its total liabilities; 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 U.S. branches of foreign banks may not
necessarily be insured by the FDIC. In addition, less
information may be publicly available about a U.S. branch of a
foreign bank than about a domestic bank.

Commercial Paper Ratings

Moody's Investors Service, Inc. ("Moody's") describes its two
highest commercial paper ratings as follows: "P-1 - the highest
grade possessing greater relative strength; P-2 - second highest
grade possessing less relative strength than the highest grade."
Standard & Poor's Corporation ("S&P") describes its two highest
commercial paper ratings as follows: "A-1 - judged to be the
highest investment grade category possessing the highest relative
strength; A-2 - investment grade category possessing less
relative strength than the highest rating."

If a portfolio security ceases to be a first tier security
(either because it no longer has the highest rating from the
requisite nationally recognized statistical rating organization
or the Board of Directors determines that it is no longer of
comparable quality to a first tier security), the security will
be disposed of unless it matures within five days or unless the
Board of directors determines that other action is in the best
interests of the Fund and its shareholders.
<PAGE>

Investment Limitations

In addition to the limitations described under "Investment
Limitations" in the Prospectus, each of the Funds may not:

(i) make short sales of securities, write put or call
options or purchase securities on margin;

(ii) underwrite securities of other issuers except to the
extent that a Fund's purchase of certain investments from an
issuer or an underwriter for the issue and subsequent disposition
of such investments in accordance with the Fund's investment
program may be deemed an underwriting;

(iii) lend portfolio securities except to the extent
that a reverse repurchase agreement may be deemed a loan of the
securities which the Fund is obligated to repurchase;

(iv) own more than 10% of the outstanding voting securities
of any issuer;

(v) purchase or sell real estate or real estate mortgage
loans (other than securities secured by real estate or interests
in real estate or securities of issuers that invest in real
estate or interests in real estate);

(vi) purchase or sell commodities or commodity contracts
including futures contracts; or

(vii) purchase securities of other investment companies
(except as part of a merger, consolidation, reorganization or
purchase of assets approved by the Fund's stockholders).

If a percentage limitation set forth in the Prospectus or herein
is satisfied at the time of investment, a later increase or
decrease in such percentage resulting from a change in value of
the Fund's portfolio securities will not constitute a violation
of the limitation.

The investment objectives and policies of The Chapman U.S.
Treasury Money Fund and the investment limitations described
above and in the Prospectus are fundamental policies and may be
changed for a Fund only when permitted by law and approved by the
holders of a majority of the Fund's outstanding shares, as
described under "Capital Stock."
MANAGEMENT

Directors and Officers

The directors and executive officers of the Company are listed
below. Directors deemed to be "interested persons" of the Company
for purposes of the Investment Company Act of 1940 are indicated
by an asterisk.

<PAGE>

Principal
Positions(s) Occupations (s)
Held with During
Name and Address Registrant Age Past 5 Years

*Nathan A. Direct 38 President, Chief Executive
Chapman, Jr. or Officer and Treasurer since 1986
401 E. Pratt St., and of The Chapman Co. and President
28th Fl Presid and Chief Executive Officer of
Baltimore, ent Chapman Capital Management,
Maryland 21202 Inc., since 1988. President,
Chairman of the Board of
Directors and Director of DEM,
Inc. (a closed-end investment
company managed by the Advisor)
since
1995.

James B. Lewis Direct 48 Chief Clerk-State Corporartion
6117 Carousl NW or Commission since April 1995,
Albuquerque, NM Chief of Staff, Office of the
87120 Governor from Jan. 1991 to April
1995. New Mexico State
Treasurer, December 1985 to
January 1991. County Treasurer,
Bernalillo County 1982-1985.
Director DEM, Inc.

Wilfred Marshall Direct 60 Director, Mayor's office of
8929 S. Sepulveda or Small Business Assistance - City
Blvd of Los Angeles since October
Suite 405 1981. Economic Development
Los Angeles, CA Representative U.S. Department
90045 of Commerce, Economic
Development Administration 1972
to October 1981.

Lottie H. Direct 54 Independent Consultant, City
Shackelford or Director of the City of Little
1720 Abigail Rock, Arkansas, 1978 to 1995,
Street the City Mayor of Little Rock,
Little Rock, AK Arkansas, 1987-1989; Vice Chair,
72201 Democratic National Committee,
1989, Co-Chair, Democratic
National Committee, 1988.
Director DEM, Inc.

*Levi Watkins, Direct 52 Associate Professor of Surgery,
Jr., M.D. or Johns Hopkins University,
2411 Boston School of Medicine since July,
Street 1984.
Baltimore, MD
21224

<PAGE>

Ronald A. White Direct 46 Senior Partner, Ronald A. White,
1401 Walnut or P.C., Director DEM, Inc.
Street
Philadelphia, PA
19102

Dr. Benjamin Direct 71 Senior Vice President of the
Hooks or Chapman Company, Since May 1993.
200 Wagner Place Executive Director of the NAACP
Memphis, TN from 1977 to April 1993.
38103
*Valerie A. Vice- 34 Administrator of The Chapman
Chapman Presid Co. since March, 1988;
401 E. Pratt St., ent Assistant to Vice-President at
28th Fl the First National Bank of
Baltimore, Maryland, May 1985 to March
Maryland 21202 1988; Secretary at Sinai
Hospital, July 1983 to May 1985.
She is married to Nathan A.
Chapman, Jr.

Bonnie Shay Secret 43 Secretary of Chapman Capital
Gillette ary Management, Inc. since 1988 and
401 E. Pratt St., Secretary of The Chapman Co.
28th Fl. since February 1987; Sales
Baltimore, Assistant, Alex. Brown & Sons,
Maryland 21202 Incorporated, April 1986 to
February 1987

Lynn Ballard Treasu 53 Controller of The Chapman Co.
401 E. Pratt St., rer since February, 1988; Assistant
28th Fl. Comptroller to the Art Litho
Baltimore, Company September 1986 to
Maryland 21202 February 1988 Account/Secretary
with C.P.I., August 1985 to
August 1986; Office Manager and
an Accountant with United
Automotive Company, June 1980 to
August 1985.

</TABLE>

Except as otherwise indicated, the address of each director and
officer is World Trade Center - Baltimore, 401 E. Pratt Street,
28th Floor, Baltimore, Maryland 21202.

Directors of the Company who are not officers receive from the
Company a fee of $1,000 for each Board of Directors meeting
attended and are reimbursed for all out-of-pocket expenses
relating to attendance at meetings. Officers of the Company do
not receive compensation from the Company.

Under the Company's charter and Maryland law, directors and
officers of the Company are not liable to the Company or its
stockholders except for receipt of an improper personal benefit
or active and deliberate dishonesty. The Company's charter
requires that it indemnify its directors and officers against
liabilities unless it is proven that a director or officer acted
in bad faith or with active and deliberate dishonesty or received
an improper personal benefit. These provisions are subject to the
limitation under the Investment Company Act of 1940 that no
director or officer may be protected against liability to the
Company for willful misfeasance, bad faith, gross negligence or
reckless disregard for the duties of his office.

Levi Watkins, Jr., M.D. is an interested director of the Company,
as defined under the Investment Company Act of 1940, because his
brother, Donald Watkins, Esquire, is a member of the Board of
Directors of The Chapman Co.

The Advisor

Chapman Capital Management, Inc. acts as the investment advisor
and manager for each of the Funds pursuant to an Advisory
Agreement dated May 16, 1989. The Advisor has agreed to provide
investment management services with
<PAGE>

respect to each Fund in accordance with its objectives and
policies and, subject to the supervision and direction of the
Company's Board of Directors, manage the Company's operations.

Unless sooner terminated, the Advisory Agreement will continue in
effect until May 16, 1996, and from year to year thereafter if
such continuance is approved at least annually by the Company's
Board of Directors or by a vote of a majority (as defined under
"Capital Stock") of the outstanding shares of each Fund and, in
either case, by a majority of the directors who are not parties
to the Advisory Agreement or interested persons (as defined in
the Investment Company Act of 1940) of any party by votes cast in
person at a meeting called for such purpose. The Advisory
Agreement may be terminated by the Company or the Advisor on 60
days' written notice, and will terminate immediately in the event
of its assignment.

The Advisory Agreement provides that the Advisor and other
persons who assist the Advisor in providing services to the Funds
will not be liable for any mistake in judgment or liability to
the Company or its stockholders and the Company will indemnify
the Advisor and such other persons against liability incurred by
them in providing services to the Funds, except for willful
misfeasance, bad faith or gross negligence of the Advisor or such
other persons in the performance of duties or reckless disregard
of obligations and duties. The Advisory Agreement permits the
Advisor to act as investment advisor for others.

The Advisory Agreement provides that if the Advisor ceases to be
the Company's investment advisor the Company will change its name
to a name which does not include "Chapman" at the Advisor's
request. The Advisory Agreement authorizes the Advisor to permit
others to use the name "Chapman."

The Advisor receives from each Fund an advisory fee at an annual
rate of .5% of each Fund's average daily net assets and an
administration fee of .1% of each Fund's average daily net
assets. Both fees are calculated daily and paid monthly. For
the years ended October 31, 1995, 1994, and 1993 the Advisor
received management and administrative fees of $148,368 and
$29,674, $101,941 and $20,388, and $157,705 and $31,541
respectively, from The Chapman US Treasury Money Fund. The
Advisor reimbursed expenses above .75% of average daily net
assets for the years ended October 31, 1995, 1994, and 1993
amounting to $66,577, $75,473, and $119,394, respectively, for
The Chapman US Treasury Money Fund. During fiscal year 1991, the
Cash Management Fund liquidated its portfolio and distributed the
proceeds to its shareholders. There has been no activity,
including subscriptions for purchases of shares, in the Cash
Management Fund since that time. However, the Cash Management
Fund is still authorized to sell shares to investors meeting the
qualifications of the Fund prospectus.

The Advisor is a wholly-owned subsidiary of The Chapman Co., the
Funds' distributor. The Chapman Co. is the only minority
controlled full service securities firm headquartered in
Maryland. It has qualified as a minority business enterprise
under various state and municipal regulations. Nathan A.
Chapman, Jr. owns 63% of the equity and has the right to cast
71% of the votes entitled to be cast by stockholders of The
Chapman Co. The Advisor's address is World Trade Center -
Baltimore, 401 East Pratt Street, 28th Floor, Baltimore, Maryland
21202.

Principal Holders of Securities

Board of the City of Birmingham, and the Amended and Restated
Industrial Water Board Employees' Retirement and Relief Plan
owned the remaining shares of the Chapman U.S. Treasury Money
Fund. There were no shares of The Chapman Institutional Cash
Management Fund outstanding on that date or during the period
November 1, 1994 through October 31, 1995.

Distributor

The Chapman Co. acts as exclusive underwriter for the Funds on a
best efforts basis. The Chapman Co. sells shares to investors
without a sales charge. It pays for the expense of preparing and
printing sales literature for the Company and the cost of
printing prospectuses for prospective stockholders. It receives
no commissions or expenses from the Company. It may pay
commissions to its sales representatives or to other
broker-dealers for sales of Fund shares.

Custodian

United Missouri Bank, KC, 928 Grand Avenue, Kansas City, Missouri
64141-6226, serves as custodian of the Funds. Under the Custody
Agreement, the Bank has agreed to: (i) maintain a separate
account or accounts in the name of each of the Funds; (ii)
receive, hold and deliver portfolio securities for the account of
the Funds; (iii) collect and receive all income and other
payments and distributions on account of the Funds' portfolio
securities; (iv) disburse funds to purchase portfolio securities,
pay dividends and expenses and for other corporate purposes; and
(v) make periodic reports to the Board of Directors concerning
the Funds' operations.

Transfer Agent

Chapman Capital Management, Inc., 401 East Pratt Street, 28th
Floor, Baltimore, Maryland 21202, serves as transfer agent and
dividend paying agent pursuant to a Shareholder Services
Agreement. Under the Agreement, the Transfer Agent has agreed
to: (1) purchase and redeem shares of the Funds for stockholders;
(2) maintain stockholder accounts; (3) distribute dividends in
accordance with stockholder elections; (4) transmit
communications by the Company to its stockholders of record,
including reports to stockholders and proxy materials for
meetings of stockholders, and (5) make periodic reports to the
Company. For its services under the Agreement, the Transfer
Agent will be compensated $18.00 per account, with a monthly
minimum of $1,500.00 per Fund excluding out-of-pocket expenses.

Certain Expense Limitations

If expenses borne by any Fund in any fiscal year exceed expense
limitations imposed by applicable state securities regulations,
the Advisor will reimburse the Company for any such excess to the
extent required by such regulations. Reimbursement would be made
no less frequently than the payment of fees to the Advisor.

PURCHASE OF SHARES

Shares of each Fund may be purchased by telephone and bank wire
and by mail as described in the Prospectus.

Each Fund's shares are sold at the net asset value per share of
the Fund next determined after an order is accepted by Chapman
Capital Management, Inc. (the "Transfer Agent") and federal funds
are received by the Transfer Agent. Stockholders begin earning
dividends on the day following the day on which the
<PAGE>

purchase order for the shares is effective; provided, however,
that if the investor notifies the Fund by 12:00 p.m. (Eastern
Time) of its intention to wire payment and such wire payment is
received by the Transfer Agent by 4:00 p.m. (Eastern Time) the
same day, stockholders begin earning dividends on the same day
the shares are purchased. Payments transmitted by check will
normally be converted to federal funds by the Transfer Agent, as
agent for the investor, within one business day for checks drawn
on a member bank of the Federal Reserve System, at which time the
purchase would normally become effective. It will take longer
for most other checks. All checks are accepted subject to
collection at full face value in U.S. funds and must be drawn in
U.S. dollars on a U.S. bank. If purchases are made by check,
redemption of such shares will not be effective, and the
redemption proceeds will not be available, until the check has
cleared, which may take up to 15 days. Shares will continue to
accrue dividends during this period.

EXCHANGES

Shares of one Fund may be exchanged at net asset value for shares
of the other Fund without charge. An exchange may be made by
telephone as set forth in the Prospectus. An exchange may also be
made by mail and must be made by mail if a new account must be
opened or the accounts are not identically registered.

An exchange may be made by letter to The Chapman Funds at the
address set forth on the cover page of the Prospectus. The
letter should be addressed to the Fund whose shares are being
exchanged and should include names and numbers for both accounts
and the amount being exchanged. The letter must be signed by all
registered owners. If the accounts are not identically
registered, the signatures must be guaranteed. If a shareholder
does not have an account with each Fund, the letter must be
accompanied by an Application.

An exchange of shares will be effected at the net asset value per
share of each Fund next determined after receipt by the Transfer
Agent of a request for exchange in proper form, including all
stock certificates, stock powers, appropriate signatures,
signature guarantees and other documentation as may be required
by the Transfer Agent.

REDEMPTION OF SHARES

Shares of each Fund may be redeemed by telephone or wire as
described in the Prospectus. Shares may also be redeemed by
mail, and must be redeemed by mail, if the proceeds are to be
sent to anyone other than the stockholder or to any bank account
or address not specified in the Application.

Written requests for redemption must be signed by the registered
stockholder. If the proceeds are paid to anyone other than the
registered stockholder or sent to any address other than the
stockholder's registered address or pre-designated bank account,
signatures must be guaranteed.

The Transfer Agent will wire the redemption proceeds to a bank
account at a commercial bank designated by the stockholder in the
redemption request, if the stockholder so requests, or will mail
a check to the address specified in the redemption request, if
any required signature guarantee is provided.

Signature guarantees must be by a national bank, a state bank or
trust company or a member firm of the New York, American, Boston,
Midwest or Pacific Stock Exchanges. Signature guarantees by a
savings bank, savings and loan association or notary public are
not acceptable.

All requests for redemption should be sent to The Chapman Funds
at the address set forth on the cover page of the Prospectus.
<PAGE>

For redemption requests received prior to 12:00 p.m. (Eastern
Time) on any business day, the redemption proceeds normally will
be available for payment to the shareholder on the same day. For
redemption requests received after 12:00 p.m. (Eastern Time),
redemption proceeds normally will be available for payment to the
shareholder on such next business day.

The Funds will attempt to make payment for all redemptions
within one business day, but in no event later than seven days
after receipt of a redemption request in proper form. The Funds
reserve the right to suspend redemptions or postpone the day of
payment for more than seven days in any periods during which the
New York Stock Exchange is closed (other than for customary
weekend and holiday closings), or when trading on that Exchange
is restricted or any emergency exists, as determined by the
Securities and Exchange Commission, which may make disposal of
investments or determination of net asset value not reasonably
practicable, or for such other periods as the Commission by order
may permit for the protection of investors.

If payment for shares is made by check, the Funds will not effect
redemptions and redemption proceeds will not be available until
the check has cleared, which may take up to 15 days. This
provision will apply to certified and cashier's checks. Shares
will continue to accrue dividends during this period.

PORTFOLIO TRANSACTIONS

The Advisor is responsible for decisions to buy or sell
securities and the selection of broker-dealers for the Funds
subject to policies adopted by the Company's Board of Directors.
Portfolio securities may be purchased directly from the issuer or
from a dealer serving as market maker or may be purchased in
broker's transactions. If securities are sold prior to maturity,
they may be sold directly to an issuer or dealer or in broker's
transactions. When securities are purchased or sold directly
from or to an issuer, no commissions or discounts are paid. The
price paid to or received from a dealer for a security may
include a spread between bid and asked prices. When securities
are purchased or sold in a broker's transaction, a commission
will be paid.

The Company's policy for placing orders for purchases and sales
of securities for the Funds is to give primary consideration to
obtaining the most favorable price and efficient execution of
transactions. Sales of Fund shares is not a factor in allocating
portfolio transactions.

The Chapman Co. may effect brokerage transactions for the Funds
when it is able to provide a net price and execution at least as
favorable to the Funds as those determined to be available from
unaffiliated brokers or dealers. The commissions paid to The
Chapman Co. on transactions for the Funds may not exceed those
charged by The Chapman Co. to comparable unaffiliated clients in
similar transactions or the limits set forth in rules adopted by
the Securities and Exchange Commission. The Board of Directors
of the Company has adopted procedures, which it will review
annually, intended to ensure compliance with these limitations.
The procedures require that The Chapman Co. report each
transaction to the Company and that the Board of Directors
determine at least quarterly that all transactions effected by
The Chapman Co. have been effected in accordance with the
procedures.

When comparable price and execution can be obtained from more
than one broker or dealer, consideration may be given to placing
portfolio transactions with those brokers or dealers who also
furnish research and other services to the Funds or the Advisor.
These services may include information as to the availability of
<PAGE>

securities for purchase or sale, statistical or factual
information or opinions pertaining to investments, evaluations of
portfolio securities, and research related computer software or
hardware. These services may benefit the Advisor in the
management of accounts of other clients and may not benefit the
Funds directly. While such services are useful and important in
supplementing its own research, the Advisor believes the value of
such services is not determinable and does not significantly
reduce its expenses. The fees payable to the Advisor will not be
reduced by the value of such services.

The Advisor and its affiliates deal, trade and invest for their
own accounts in the types of securities in which the Funds may
invest and may have relationships with the issuers of securities
purchased by a Fund.

Investment decisions for each Fund are made independently from
those for other accounts advised by the Advisor.

The Advisor's other accounts may also invest in the same
securities as the Funds. When a purchase or sale of the same
security is made at substantially the same time on behalf of a
Fund and the other Fund or account, the transaction will be
averaged as to price, and available instruments allocated as to
amount, in a manner believed to be equitable to the Fund and the
other Fund or account. In some instances, this procedure may
adversely affect the price paid or received by a Fund or the size
of the position obtained or sold by a Fund. To the extent
permitted by law, the securities to be sold or purchased for a
Fund may be aggregated with those to be sold or purchased for the
other Fund or accounts in order to obtain best execution.

NET ASSET VALUE

The net asset value of shares of each of the Funds is determined
each day as of the close of trading on the New York Stock
Exchange, presently 4:00 p.m. The New York Stock Exchange is
scheduled to be open Monday through Friday except for certain
Federal and other holidays. Currently, those days include: New
Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

As indicated under "Net Asset Value" in the Prospectus, the
amortized cost method is used to determine the value of each
Fund's portfolio securities pursuant to Rule 2a-7 under the
Investment Company Act of 1940. The amortized cost method
involves valuing a security at its cost initially and thereafter
amortizing any discount or premium over the period until
maturity, regardless of the impact of fluctuating interest rates
on the market value of the security. 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 a Fund would receive if the security were sold. During
such periods, the yield to investors in a Fund may differ
somewhat from that obtained in a similar entity which uses market
value to value its portfolio instruments.

Rule 2a-7 provides that in order to value its portfolio using the
amortized cost method, each Fund must maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase
securities having remaining maturities (as defined in Rule 2a-7)
of 397 days or less and invest only in U.S. dollar denominated
instruments that the Company's Board of Directors determines
present minimal credit risks, and which are eligible securities
(as defined in Rule 2a-7) at the time of acquisition. In
addition, The Chapman Institutional Cash Management Fund will
invest at least 95% of its total assets in eligible securities
which are rated in
<PAGE>

the highest rating category for short-term debt obligations as
provided in Rule 2a-7, and will not invest more than 5% of its
total assets in securities (other than U.S. Government
securities) issued by any one issuer. Pursuant to Rule 2a-7, the
Board is required to establish procedures designed to stabilize,
to the extent reasonably possible, each Fund's price per share as
computed for the purpose of sales and redemptions at $1. Such
procedures include review of each Fund's portfolio holdings by
the Board of Directors at appropriate intervals to determine
whether each Fund's net asset value calculated by using available
market quotations deviates from $1 per share based on amortized
cost. In the event the Board determines that a deviation exists
which may result in material dilution or other unfair results to
investors or existing stockholders, the Board will take such
corrective action as it regards as necessary and appropriate,
including the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity, withholding dividends or establishing a net asset value
per share by using available market quotations.

DIVIDENDS

Daily dividends declared by each Fund include net investment
income and net realized short-term capital gain or loss. Net
investment income consists of interest accrued and discount
earned on each Fund's securities (including original issue and
market discount) less amortization of market premium on
securities and accrued expenses of the Fund. It is not expected
that either Fund will realize net long-term capital gains or
losses. As stated in the Prospectus, it is intended that each
Fund will maintain a net asset value per share at $1.

As a result of a significant expense or realized or unrealized
loss incurred by a Fund, it is possible that the Fund's net asset
value per share may fall below $1. Should a Fund incur or
anticipate any unusual or unexpected significant expense or loss
which would affect disproportionately the income of the Fund for
a particular period, the Board of Directors would at that time
consider whether to adhere to the present dividend policy with
respect to the Fund or to revise it in order to ameliorate to the
extent possible the disproportionate effect of such expense or
loss on the income of the Fund. Such expense or loss may result
in a stockholder's receiving no dividends for the period in which
it holds shares of the Fund and in its receiving upon redemption
a price per share lower than that which it paid.

TAXES

Qualification as a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"),
requires, among other things, that each Fund (a) derive at least
90% of its gross income from interest, payments with respect to
securities, loans and gains from the sale or other disposition of
or other income derived with respect to its business of investing
in securities; (b) derive less than 30% of its gross income from
the sale or other disposition of securities held for less than
three months; and (c) diversify its holdings so that, at the end
of each fiscal quarter, (i) at least 50% of the market value of
the Fund's assets is represented by cash, U.S. Government
securities, securities of other regulated investment companies
and other securities with such other securities limited, in
respect of any one issuer, to an amount not greater than 5% of
the value of the Fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one
issuer (other than U.S. Government securities).

<PAGE>

YIELD

The Company makes available yield quotations based upon the
seven-day period ended on the date of calculation for each Fund.
In arriving at such quotations, the Company first determines the
net change during the period in the value of a hypothetical
pre-existing account having a balance of one share at the
beginning of the period (such net change being inclusive of the
value of any additional shares issued in connection with
distributions of net income as well as net income accrued on both
the original share and any such additional shares but exclusive
of realized gains and losses from the sale of securities and
unrealized appreciation and depreciation), then divides such net
change by the value of the account at the beginning of the period
to obtain the base period return, and then multiplies the base
period return by 365/7.

In addition, the Company may make available for the Funds
"effective yield" quotations, computed by adding 1 to the base
period return (calculated as above), raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.

Yield quotations are based on historical earnings and are not
intended to indicate future performance.

CAPITAL STOCK

For additional information as to the organization and capital
stock of the Company, see "Other Information" in the Prospectus.

As used in the Prospectus and this Statement of Additional
Information, the term "majority," when referring to the approvals
to be obtained from stockholders in connection with matters
affecting both of the Funds means the vote of the lesser of (i)
67% of the Company's shares represented at a meeting if the
holders of more than 50% of the outstanding shares are present in
person or by proxy or (ii) more than 50% of the Company's
outstanding shares. The term "majority," when referring to the
approvals to be obtained from stockholders in connection with
matters affecting a particular Fund (for example, approval of an
investment advisory contract), means the vote of the lesser of
(i) 67% of the shares of that Fund represented at a meeting if
the holders of more than 50% of the outstanding shares of the
Fund are present in person or by proxy or (ii) more than 50% of
the outstanding shares of that Fund. Stockholders are entitled
to one vote for each full share held and a fractional vote for
fractional shares held.

Each share of a Fund is entitled to such dividends and
distributions out of the assets belonging to that Fund as are
declared in the discretion of the Company's Board of Directors.
In determining a Fund's net asset value, each Fund is charged
with the direct expenses of that Fund and with a share of the
general expenses and liabilities of the Company, which are
normally allocated in proportion to the relative asset values of
the respective Funds at the time of allocation.

In the event of the liquidation or dissolution of the Company,
shares of a Fund are entitled to receive the assets attributable
to that Fund that are available for distribution, and a
proportionate distribution, based upon the relative net assets of
the Funds, of any general assets not attributable to a Fund that
are available for distribution.

Subject to the provisions of the Company's Articles of
Incorporation, determinations by the Board of Directors as to the
direct and allocable liabilities, and the allocable portion of
any general assets of the Company, with respect to a Fund are
conclusive.

<PAGE>

Stockholders of the Company are not entitled to any preemptive or
conversion rights.

COUNSEL TO THE COMPANY

The validity of the Company's shares will be passed upon for the
Company by Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
Venable, Baetjer and Howard, LLP also acts as counsel to the
Advisor and the Distributor.

EXPERTS

Ernst & Young LLP, One North Charles Street, Baltimore, Maryland
21201, serves as the Company's independent auditors. Ernst &
Young LLP will provide audit services, tax advice and assistance
in connection with filings with the Securities and Exchange
Commission.

The financial statements and financial highlights of the Funds
appearing or incorporated by reference in the Company's
Prospectus, this Statement of Additional Information and the
Registration Statement have been audited by Ernst & Young LLP,
independent auditors, to the extent indicated in their report
thereon also appearing elsewhere herein and in the Registration
Statement or incorporated by reference. Such financial statements
have been included herein or incorporated herein by reference in
reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

FINANCIAL STATEMENTS

The financial statements of each of the Funds for the year ended
October 31, 1995 and the Report of Independent Auditors are set
forth in the Company's 1995 Annual Report to Stockholders and are
incorporated herein by reference. Also see financial highlights
on page 3 of the Company's Prospectus.
<PAGE>

PART C. OTHER INFORMATION

Item 24. Financial Statement and Exhibits.
(a) Financial Statements:
See Registrant's 1995 Annual Report to
Stockholders previously filed and the Prospectus,
Page 3.
(b) Exhibits:

Exhibit
Number Description

<S> <C>

1 Articles of Incorporation of the
Registrant (previously filed)

2 By-laws of the Registrant
(previously filed)

4 Form of Stock Certificate
(previously filed)

5 Form of Advisory and Administrative
Services Agreement between the
Registrant and Chapman Capital
Management, Inc. (previously filed)

6 Form of Distribution Agreement
between the Registrant and the
Chapman Co. (previously filed)

8 Custodian Agreement between the
Registrant and United Missouri
Bank KC (filed herewith)

9 Shareholder Services Agreement
between the Registrant and Chapman
Capital Management, Inc. (filed herewith)

10 Opinion and consent of Venable,
Baetjer and Howard (previously
filed)

11 Consent of independent auditors (filed
herewith)

12 Financial Statements (See Item 24(a) above)

13 Power of Attorney (filed herewith)
</TABLE>

<PAGE>

Item 25. Persons Controlled by or under Common Control with the
Registrant.

Item 26. Number of Holders of Securities.

Number of Record
Title of Class Holders
<S> <C>
The Chapman US
Treasury Money Fund 17
Common Stock

The Chapman
Institutional Cash
Management Fund 0
Common Stock

</TABLE>

Item 27. Indemnification.

Reference is made to Article VII of the Registrant's Articles of
Incorporation, Article IV of the Registrant's By-laws, Section 7
of the Advisory and Administrative Services Agreement between the
Registrant and Chapman Capital Management, Inc. and Section 4 of
the Distribution Agreement between the Registrant and The Chapman
Co., which provide for indemnification or limitation of the
liability of directors and officers, the advisor, the principal
underwriter and affiliates of the Registrant.

The Registrant has to obtained director's and officer's liability
insurance which will insure directors and officers of the
Registrant against liability to the Registrant and its
stockholders.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions,or otherwise, the
Registrant understands that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities 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
<PAGE>

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
the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>

Item 28. Business and Other Connections of Investment Advisor.

Name and Position
with Investment Advisor Other Business

Nathan A. Chapman, Jr. President and Chief Executive
Officer,
Director and Chairman The Chapman Co., 401 East Pratt
Street,
of the Board 28th Floor, Baltimore, Maryland 21202,
President February 1987 to Present. Investment
Representative, Alex. Brown & Sons, Inc.
March 1982 to February 1987

Bonnie Shay Gillette Secretary, The Chapman Co., 401
East Pratt
Secretary Street, 28th Floor, Baltimore, Maryland
21202, February 1987 to Present. Sales
Assistant, Alex. Brown & Sons
Incorporated, April 1986 to February
1987

M. Lynn Ballard Financial Officer, The Chapman Co.,
May
Treasurer 1988 to present. Assistant Controller,
Art Litho Co., September 1986 to
February 1988.

Samuel C. Gardener Attorney, Bell and Gardner, P.C.
Director

Theron Stokes Attorney, Alabama Education Association.
Director

Alan J. Wade Attorney, Heiskell, Donelson, Bearman,
Director Adams, Williams & Kirsch.

Item 29. Principal Underwriter.

(a) The Chapman Co. does not currently act as principal
underwriter or exclusive distributor for any other investment
company, other than DEM, Inc.

(b) Directors and Officers

Positions and Offices

Name and Principal With With
Business Address Underwriter
Registrant

Nathan A. Chapman, Jr. Director,
Director,
The Chapman Co. President
President
401 East Pratt Street Chief Executive
28th Floor Officer, Treasurer
Baltimore, MD 21202

<PAGE>

Donald V. Watkins, Esquire Director None
Watkins, Carter & Knight
1120 South Court Street
Montgomery, AL 36104

Bonnie Shay Gillette Secretary
Secretary
The Chapman Co.
401 East Pratt Street
28th Floor
Baltimore, Maryland 21202

Earl U. Bravo, Sr. Director None
The Chapman Co.
401 East Pratt Street
28th Floor
Baltimore, Maryland 21202
(c) Not applicable.

Item 30. Location of Accounts and Records.

All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the
rules thereunder will be maintained at the offices of Chapman
Capital Management, Inc., 401 East Pratt Street, 28th Floor,
Baltimore, Maryland 21202.

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

Not applicable.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly
caused this post-effective amendment No. 9 and amendment No. 11
to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Baltimore,
State of Maryland, on February 28, 1996. The undersigned hereby
certifies that the within post-effective amendment No. 10 and
amendment No. 11 meet all of the requirements for effectiveness
pursuant to paragraph (b) of Rule 485 promulgated under the
Securities Act of 1933.

THE CHAPMAN FUNDS, INC.

By: __/Nathan A. Chapman,
Jr./______________
Nathan A. Chapman,Jr.
President

Pursuant to the requirements of the Securities Act of 1933,
this post-effective amendment No. 9 to Registration Statement has
been signed below by the following persons in the capacities and
on the date indicated.

Signature Title Date

____/Nathan A. Chapman, Jr./_____ Director and President
February 28, 1996
Nathan A. Chapman, Jr. (principal executive officer)

____/Lynn Ballard/____________ Treasurer (principal
February 28, 1996
Lynn Ballard financial and accounting officer)

Each of the Directors:
Nathan A. Chapman, Jr., Levi Watkins, Jr., Dr. Benjamin
Hooks, and Wilfred Marshall.

By: ____/Nathan A. Chapman, Jr./______
February 28, 1996
Nathan A. Chapman, Jr.
as Attorney-in-Fact

<PAGE>

Exhibits
<TABLE>
<CAPTION>

Exhibit Page #

11 Consent of independent auditor. 37

</TABLE>

<PAGE>

Exhibit 11

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "
Financial Highlights" in the Prospectus and "Experts" and
"Financial Statements" in the Statement of Additional Information
and to the incorporation by reference in this Post-Effective
Amendment Number 9 to Registration Statement Number 33-25716
(Form N1-A) of our report dated November 10, 1995, on the
financial statements and financial highlights of the Chapman
Funds, Inc. for the year ended October 31,1995, included in the
1995 Annual Report to Shareholders.

Baltimore, Maryland
February 27, 1996

<PAGE>

Exhibit 13

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, THE
CHAPMAN FUNDS, INC., a corporation organized under the laws of
the State of Maryland ( the "Corporation"), and certain directors
and officers of the Corporation, do hereby constitute and appoint
NATHAN A. CHAPMAN, JR. his true and lawful attorney to take any
and all action and execute any and all instruments which said
attorney and agent may deem necessary or advisable to enable the
Corporation to sign any and all amendments or supplements
(including post effective amendments) to the Registration
Statement (Registration No. 33-25716) filed with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended, and to any instruments or documents filed or to be filed
as part of or in connection with such Registration Statement; and
each of the undersigned hereby ratifies and confirms all that
said attorney and agent shall do or cause to be done by virtue
thereof.

IN WITNESS WHEREOF, the Corporation has caused these
presents to be signed by its President and the same attested by
its Secretary, each thereunto duly authorized by its Board of
Directors, and each of the undersigned has hereunto set his hand
and seal as the day set opposite his name.

THE CHAPMAN FUNDS, INC.

By:
President

(CORPORATE SEAL)

ATTEST:

Secretary

<PAGE>

/Nathan A. Chapman, Jr./ Director and President
Nathan A. Chapman, Jr. (Principal Executive
Officer)

/Lynn Ballard/ Treasurer (Principal Financial
&
Lynn Ballard Accounting Officer)

/Wilfred Marshall/ Director
Wilfred Marshall

Director
James Lewis

Director
Lottie Shakelford

/Levi Watkins, Jr./ Director
Levi Watkins, Jr.

Director
Ronald White

/Benjamin Hooks/ Director
Benjamin Hooks