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<PAGE> PAGE 2
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<PAGE> PAGE 4
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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074 U020400 1
074 V010400 19.10
074 V020400 19.07
074 W000400 0.0000
074 X000400 32
074 Y000400 0
075 A000400 0
075 B000400 119
076 000400 0.00
SIGNATURE NATHAN A. CHAPMAN, JR.
TITLE PRESIDENT
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS ANNUAL FINANCIAL STATEMENTS DATED OCTOBER 31 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
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<NAME> CHAPMAN US TREASURY MONEY FUND
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<SERIES>
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<NAME> DEM INDEX FUND INSTITUTIONAL SHARES
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<NAME> DEM INDEX FUND INVESTOR SHARES
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</TABLE>
<TABLE> <S> <C>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATIONS EXTRACTED FROM THE
REGISTRANTS ANNUAL FINANCIAL STATEMENTS DATED OCTOBER 31 1999 ANDIS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 032
<NAME> DEM EQUITY FUND INSTITUTIONAL SHARE
<S> <C>
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<REALIZED-GAINS-CURRENT> (108982)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS ANNUAL FINANCIAL STATEMENTS DATED OCTOBER 31 1999 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 031
<NAME> DEM EQUITY FUND INVESTOR SHARES
<S> <C>
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<INTEREST-INCOME> 27
<OTHER-INCOME> 0
<EXPENSES-NET> 6608
<NET-INVESTMENT-INCOME> (4803)
<REALIZED-GAINS-CURRENT> (31484)
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</TABLE>
Report of Independent Auditors
Board of Directors
The Chapman Funds, Inc.
In planning and performing our audits of the
financial statements of The Chapman Funds, Inc.
(U.S. Treasury Money Fund, DEM Equity Fund and DEM
Index Fund) (the Funds) for the
year or period ended October 31, 1999, we considered
its internal control, including control
activities for safeguarding securities, in order to
determine our auditing procedures for the
purpose of expressing our opinions on the financial
statements and to comply with the
requirements of Form N-SAR, and not to provide
assurance on internal control.
The management of the Funds is responsible for
establishing and maintaining internal control. In
fulfilling this responsibility, estimates and
judgments by management are required to assess the
expected benefits and related costs of controls.
Generally, controls that are relevant to an audit
pertain to the entitys objective of preparing
financial statements for external purposes that are
fairly presented in conformity with generally
accepted accounting principles. Those controls
include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control,
errors or fraud may occur and not be detected.
Also, projection of any evaluation of internal
control to future periods is subject to the risk that
it
may become inadequate because of changes in
conditions or that the effectiveness of the design
and operation may deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in internal control
that might be material weaknesses under standards
established by the American Institute of
Certified Public Accountants. A material weakness is
a condition in which the design or
operation of one or more of the internal control
components does not reduce to a relatively low
level the risk that misstatements caused by errors or
fraud in amounts that would be material in
relation to the financial statements being audited
may occur and not be detected within a timely
period by employees in the normal course of
performing their assigned functions. However, we
noted no matters involving internal control and its
operation, including controls for safeguarding
securities, that we consider to be material
weaknesses as defined above at October 31, 1999.
This report is intended solely for the information
and use of management and the Board of
Directors of The Chapman Funds. Inc., and the
Securities and Exchange Commission and is not
intended to be and should not be used by anyone other
than these specified parties.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
December 3, 1999
