<PAGE> PAGE 1
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<PAGE> PAGE 2
012 C02AA01 TX
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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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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SIGNATURE BRENDA T. KOELEMAY
TITLE VP/TREASURER
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R CAPITAL FUNDS, INC.
[SERIES]
[NUMBER] 01
[NAME] GOVERNMENT INCOME FUND SERIES
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1997
[PERIOD-END] AUG-31-1997
[INVESTMENTS-AT-COST] 23033453
[INVESTMENTS-AT-VALUE] 23533451
[RECEIVABLES] 264076
[ASSETS-OTHER] 2782
[OTHER-ITEMS-ASSETS] 44645
[TOTAL-ASSETS] 23844954
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 161653
[TOTAL-LIABILITIES] 161653
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 23512859
[SHARES-COMMON-STOCK] 2272181
[SHARES-COMMON-PRIOR] 2082877
[ACCUMULATED-NII-CURRENT] 43534
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (373090)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 499998
[NET-ASSETS] 23683301
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1689115
[OTHER-INCOME] 0
[EXPENSES-NET] 226521
[NET-INVESTMENT-INCOME] 1462594
[REALIZED-GAINS-CURRENT] (2446)
[APPREC-INCREASE-CURRENT] 562324
[NET-CHANGE-FROM-OPS] 2022472
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1419091
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 291016
[NUMBER-OF-SHARES-REDEEMED] 229580
[SHARES-REINVESTED] 127868
[NET-CHANGE-IN-ASSETS] 1952455
[ACCUMULATED-NII-PRIOR] 31
[ACCUMULATED-GAINS-PRIOR] (370644)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 113231
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 242068
[AVERAGE-NET-ASSETS] 22657411
[PER-SHARE-NAV-BEGIN] 10.14
[PER-SHARE-NII] 0.67
[PER-SHARE-GAIN-APPREC] 0.26
[PER-SHARE-DIVIDEND] 0.65
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.42
[EXPENSE-RATIO] 1.00
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F1>
<FN>
<F1>Expenses for the calculation are net of reimbursement from Securities
Management & Research, Inc. Without this reimbursement, the ratio of
expenses to average net assets would have been 1.07% for the year ended
August 31, 1997.
</FN>
</TABLE>
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R CAPITAL FUNDS, INC.
[SERIES]
[NUMBER] 02
[NAME] PRIMARY FUND SERIES
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1997
[PERIOD-END] AUG-31-1997
[INVESTMENTS-AT-COST] 33198277
[INVESTMENTS-AT-VALUE] 33198277
[RECEIVABLES] 6965
[ASSETS-OTHER] 2782
[OTHER-ITEMS-ASSETS] 10417
[TOTAL-ASSETS] 33218441
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 173566
[TOTAL-LIABILITIES] 173566
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 33050630
[SHARES-COMMON-STOCK] 33050648
[SHARES-COMMON-PRIOR] 37470797
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (5755)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 33044875
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1994367
[OTHER-INCOME] 0
[EXPENSES-NET] 282159
[NET-INVESTMENT-INCOME] 1712208
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 1712208
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1712208
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 37131503
[NUMBER-OF-SHARES-REDEEMED] 43165711
[SHARES-REINVESTED] 1614059
[NET-CHANGE-IN-ASSETS] 4420149
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (5755)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 176167
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 356359
[AVERAGE-NET-ASSETS] 35225938
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] 0.05
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.05
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] 0.80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F1>
<FN>
<F1>Expenses for the calculation are net of a reimbursement from Securities
Management & Research, Inc. Without this reimbusement, the ratio of expenses
to average net assets would have been 1.01% for the year ended August 31,
1997.
</FN>
</TABLE>
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R CAPITAL FUNDS, INC.
[SERIES]
[NUMBER] 03
[NAME] TAX FREE FUND SERIES
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1997
[PERIOD-END] AUG-31-1997
[INVESTMENTS-AT-COST] 10180383
[INVESTMENTS-AT-VALUE] 10519516
[RECEIVABLES] 153332
[ASSETS-OTHER] 3212
[OTHER-ITEMS-ASSETS] 88422
[TOTAL-ASSETS] 10764482
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 64313
[TOTAL-LIABILITIES] 64313
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 10402728
[SHARES-COMMON-STOCK] 1041640
[SHARES-COMMON-PRIOR] 920950
[ACCUMULATED-NII-CURRENT] 8346
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (50038)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 339133
[NET-ASSETS] 10700169
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 553479
[OTHER-INCOME] 0
[EXPENSES-NET] 54366
[NET-INVESTMENT-INCOME] 499113
[REALIZED-GAINS-CURRENT] 12803
[APPREC-INCREASE-CURRENT] 314617
[NET-CHANGE-FROM-OPS] 826533
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 492984
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 95379
[NUMBER-OF-SHARES-REDEEMED] 22454
[SHARES-REINVESTED] 47765
[NET-CHANGE-IN-ASSETS] 1218423
[ACCUMULATED-NII-PRIOR] 2217
[ACCUMULATED-GAINS-PRIOR] (62841)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 50224
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 127568
[AVERAGE-NET-ASSETS] 10050280
[PER-SHARE-NAV-BEGIN] 9.93
[PER-SHARE-NII] 0.51
[PER-SHARE-GAIN-APPREC] 0.33
[PER-SHARE-DIVIDEND] 0.50
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.27
[EXPENSE-RATIO] 0.54
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F1>
<FN>
<F1>Expenses for the calculation are net of reimbursment from Securities
Management Research, Inc. Without this reimbursement, the ratio of
expenses to average net assets would have been 1.27% for the year ended
August 31, 1997.
</FN>
</TABLE>
