<PAGE> PAGE 1
000 B000000 10/31/97
000 C000000 0000870786
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 PRINCOR BLUE CHIP FUND, INC.
001 B000000 811-06263
001 C000000 5152475476
002 A000000 THE PRINCIPAL FINANCIAL GROUP
002 B000000 DES MOINES
002 C000000 IA
002 D010000 50392
002 D020000 0200
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
018 000000 Y
019 A000000 Y
019 B000000 29
019 C000000 PRINCORGRP
020 A000001 LIPPER ANALYTICAL
020 B000001 13-2792478
020 C000001 18
020 A000002 PRINCIPAL FINANCIAL SECURITIES INC.
020 B000002 75-0839696
020 C000002 17
020 A000003 STANDARD & POORS SECURITIES
020 B000003 13-2671951
020 C000003 11
020 A000004 WERTHEIM, SCHROEDER
020 B000004 13-2697272
020 C000004 6
020 A000005 DONALDSON, LUFKIN & JENRETTE (DLJ)
020 B000005 13-2741729
020 C000005 5
020 A000006 INSTINET CO.
020 B000006 13-2596491
020 C000006 5
020 A000007 CREDIT SUISSE FIRST BOSTON CORP.
020 B000007 13-5659485
020 C000007 5
020 A000008 MORGAN STANLEY & CO.
020 B000008 13-2655998
020 C000008 5
<PAGE> PAGE 2
020 A000009 PAINE WEBBER INC.
020 B000009 13-2638166
020 C000009 4
020 A000010 BEAR STEARNS & CO.
020 B000010 13-3299429
020 C000010 4
021 000000 114
022 A000001 ASSOCIATES CORPORATION OF NORTH AMERICA
022 B000001 74-1494554
022 C000001 693688
022 D000001 0
022 A000002 GENERAL ELECTRIC CAPITAL CORP.
022 B000002 13-1500700
022 C000002 39821
022 D000002 0
022 A000003 FORD MOTOR CREDIT CO.
022 B000003 38-1612444
022 C000003 13464
022 D000003 3823
022 A000004 AMERICAN EXPRESS CREDIT CORPORATION
022 B000004 11-1988350
022 C000004 15509
022 D000004 0
022 A000005 HOUSEHOLD FINANCE CORP.
022 B000005 36-1239445
022 C000005 5824
022 D000005 0
022 A000006 MERRILL LYNCH MONEY MARKET SECURITIES
022 B000006 13-2761776
022 C000006 3546
022 D000006 0
022 A000007 GENERAL ELECTRIC CO.
022 B000007 42-1192999
022 C000007 3535
022 D000007 0
022 A000008 CHEVRON OIL FINANCE CO.
022 B000008 25-1215010
022 C000008 3267
022 D000008 0
022 A000009 AMERICAN GENERAL FINANCE CORP
022 B000009 35-0416090
022 C000009 2139
022 D000009 0
022 A000010 NORWEST FINANCIAL INC.
022 B000010 42-1186565
022 C000010 389
022 D000010 0
023 C000000 781506
023 D000000 3823
027 000000 Y
028 A010000 4280
<PAGE> PAGE 3
028 A020000 0
028 A030000 0
028 A040000 678
028 B010000 4731
028 B020000 190
028 B030000 0
028 B040000 1182
028 C010000 6497
028 C020000 0
028 C030000 0
028 C040000 894
028 D010000 5578
028 D020000 0
028 D030000 0
028 D040000 904
028 E010000 6577
028 E020000 188
028 E030000 0
028 E040000 836
028 F010000 6751
028 F020000 0
028 F030000 0
028 F040000 1548
028 G010000 34414
028 G020000 378
028 G030000 0
028 G040000 6042
028 H000000 14220
029 000000 Y
030 A000000 797
030 B000000 4.75
030 C000000 0.00
031 A000000 147
031 B000000 0
032 000000 91
033 000000 559
034 000000 Y
035 000000 19
036 A000000 N
036 B000000 0
042 A000000 0
042 B000000 0
042 C000000 100
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 329
044 000000 0
055 A000000 N
<PAGE> PAGE 4
055 B000000 N
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
066 A000000 Y
066 B000000 N
066 C000000 N
066 D000000 N
066 E000000 Y
066 F000000 N
066 G000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
071 A000000 90170
071 B000000 43742
071 C000000 78962
071 D000000 55
072 A000000 12
072 B000000 262
072 C000000 1744
072 D000000 0
072 E000000 0
072 F000000 418
072 G000000 0
072 H000000 0
072 I000000 402
072 J000000 4
072 K000000 0
072 L000000 0
072 M000000 7
072 N000000 45
072 O000000 0
072 P000000 0
072 Q000000 0
<PAGE> PAGE 5
072 R000000 6
072 S000000 0
072 T000000 329
072 U000000 0
072 V000000 0
072 W000000 21
072 X000000 1232
072 Y000000 0
072 Z000000 774
072AA000000 12147
072BB000000 0
072CC010000 6
072CC020000 0
072DD010000 665
072DD020000 68
072EE000000 1456
073 A010000 0.0000
073 A020000 0.0000
073 B000000 0.4593
073 C000000 0.0000
074 A000000 1
074 B000000 0
074 C000000 1949
074 D000000 0
074 E000000 0
074 F000000 109058
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 2331
074 K000000 0
074 L000000 501
074 M000000 1
074 N000000 113841
074 O000000 0
074 P000000 0
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 89
074 S000000 0
074 T000000 113752
074 U010000 3955
074 U020000 1676
074 V010000 0.00
074 V020000 0.00
074 W000000 0.0000
074 X000000 20817
074 Y000000 0
075 A000000 0
<PAGE> PAGE 6
075 B000000 82791
076 000000 0.00
077 A000000 Y
077 B000000 Y
077 C000000 Y
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 N
077 Q020000 N
077 Q030000 N
080 A000000 ICI MUTUAL INSURANCE COMPANY
080 C000000 16000
081 A000000 Y
081 B000000 28
082 A000000 N
082 B000000 0
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 Y
085 B000000 N
SIGNATURE A. S. FILEAN
TITLE V.P./ SECRETARY
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 96,660,150
<INVESTMENTS-AT-VALUE> 111,007,205
<RECEIVABLES> 2,831,945
<ASSETS-OTHER> 545
<OTHER-ITEMS-ASSETS> 1,491
<TOTAL-ASSETS> 113,841,186
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,679
<TOTAL-LIABILITIES> 89,679
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,179,387
<SHARES-COMMON-STOCK> 3,954,855
<SHARES-COMMON-PRIOR> 2,595,277
<ACCUMULATED-NII-CURRENT> 79,494
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,145,571
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,347,055
<NET-ASSETS> 113,751,507
<DIVIDEND-INCOME> 1,744,320
<INTEREST-INCOME> 262,357
<OTHER-INCOME> 0
<EXPENSES-NET> (1,232,778)
<NET-INVESTMENT-INCOME> 773,899
<REALIZED-GAINS-CURRENT> 12,146,669
<APPREC-INCREASE-CURRENT> 617,291
<NET-CHANGE-FROM-OPS> 13,537,859
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (664,560)
<DISTRIBUTIONS-OF-GAINS> (1,212,100)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,757,696
<NUMBER-OF-SHARES-REDEEMED> (495,337)
<SHARES-REINVESTED> 97,219
<NET-CHANGE-IN-ASSETS> 61,261,106
<ACCUMULATED-NII-PRIOR> 1,454,644
<ACCUMULATED-GAINS-PRIOR> 13,729,764
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 417,958
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,232,778
<AVERAGE-NET-ASSETS> 83,601,364
<PER-SHARE-NAV-BEGIN> 17.10
<PER-SHARE-NII> .21
<PER-SHARE-GAIN-APPREC> 3.58
<PER-SHARE-DIVIDEND> (.21)
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.22
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 96,660,150
<INVESTMENTS-AT-VALUE> 111,007,205
<RECEIVABLES> 2,831,945
<ASSETS-OTHER> 545
<OTHER-ITEMS-ASSETS> 1,491
<TOTAL-ASSETS> 113,841,186
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,679
<TOTAL-LIABILITIES> 89,679
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,179,387
<SHARES-COMMON-STOCK> 906,999
<SHARES-COMMON-PRIOR> 383,239
<ACCUMULATED-NII-CURRENT> 79,494
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,145,571
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,347,055
<NET-ASSETS> 113,751,507
<DIVIDEND-INCOME> 1,744,320
<INTEREST-INCOME> 262,357
<OTHER-INCOME> 0
<EXPENSES-NET> (1,232,778)
<NET-INVESTMENT-INCOME> 773,899
<REALIZED-GAINS-CURRENT> 12,146,669
<APPREC-INCREASE-CURRENT> 617,291
<NET-CHANGE-FROM-OPS> 13,537,859
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (25,978)
<DISTRIBUTIONS-OF-GAINS> (188,032)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 585,899
<NUMBER-OF-SHARES-REDEEMED> (73,924)
<SHARES-REINVESTED> 11,785
<NET-CHANGE-IN-ASSETS> 61,261,106
<ACCUMULATED-NII-PRIOR> 1,454,644
<ACCUMULATED-GAINS-PRIOR> 13,729,764
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 417,958
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,232,778
<AVERAGE-NET-ASSETS> 83,601,364
<PER-SHARE-NAV-BEGIN> 17.03
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 3.54
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.14
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 96,660,150
<INVESTMENTS-AT-VALUE> 111,007,205
<RECEIVABLES> 2,831,945
<ASSETS-OTHER> 545
<OTHER-ITEMS-ASSETS> 1,491
<TOTAL-ASSETS> 113,841,186
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,679
<TOTAL-LIABILITIES> 89,679
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,179,387
<SHARES-COMMON-STOCK> 768,856
<SHARES-COMMON-PRIOR> 92,245
<ACCUMULATED-NII-CURRENT> 79,494
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12,145,571
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,347,055
<NET-ASSETS> 113,751,507
<DIVIDEND-INCOME> 1,744,320
<INTEREST-INCOME> 262,357
<OTHER-INCOME> 0
<EXPENSES-NET> (1,232,778)
<NET-INVESTMENT-INCOME> 773,899
<REALIZED-GAINS-CURRENT> 12,146,669
<APPREC-INCREASE-CURRENT> 617,291
<NET-CHANGE-FROM-OPS> 13,537,859
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (42,305)
<DISTRIBUTIONS-OF-GAINS> (55,610)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 734,050
<NUMBER-OF-SHARES-REDEEMED> (62,702)
<SHARES-REINVESTED> 5,263
<NET-CHANGE-IN-ASSETS> 61,261,106
<ACCUMULATED-NII-PRIOR> 1,454,644
<ACCUMULATED-GAINS-PRIOR> 13,729,764
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 417,958
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,232,778
<AVERAGE-NET-ASSETS> 83,601,364
<PER-SHARE-NAV-BEGIN> 17.08
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 3.53
<PER-SHARE-DIVIDEND> (.12)
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.16
<EXPENSE-RATIO> 1.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Report of Independent Auditors on Internal Control
The Board of Directors and Shareholders
Princor Blue Chip Fund, Inc.
In planning and performing our audit of the financial statements of Princor Blue
Chip Fund, Inc. for the year ended October 31, 1997, we considered its internal
control, including control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on internal control.
The management of Princor Blue Chip Fund, Inc. 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. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. These controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of specific
internal control components does not reduce to a relatively low level the risk
that errors or irregularities in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
control for activities safeguarding securities, that we consider to be material
weaknesses as defined above as of October 31, 1997.
This report is intended solely for the information and use of management and the
Board of Directors of Princor Blue Chip Fund, Inc. and the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Des Moines, Iowa
November 26, 1997
SPECIAL MEETING OF SHAREHOLDERS PRINCOR BLUE CHIP FUND, INC.
HELD SEPTEMBER 16, 1997
1.Election of the Board of Directors.
For Withheld
Davis 2,451,532 31,847
Ehrle 2,450,555 32,824
Ferguson 2,449,693 33,685
Gilbert 2,451,742 31,637
Griswell 2,449,390 33,989
Jones 2,452,073 31,306
Keller 2,453,060 30,319
Lukavsky 2,448,619 34,760
Peebler 2,445,708 37,671
2.Ratification of selection of Ernst & Young LLP as independent public auditors.
In Favor Opposed Abstain
2,416,753 15,960 50,666
3.Approval of name change Principal Blue Chip Fund, Inc..
In Favor Opposed Abstain
2,342,896 81,672 58,810
4.Approval of modification of management agreement.
In Favor Opposed Abstain
2,269,547 127,540 86,292
