<PAGE> PAGE 1
000 B000000 12/31/97
000 C000000 0000885980
000 D000000 N
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000 J000000 A
001 A000000 THE YACKTMAN FUNDS, INC.
001 B000000 811-6628
001 C000000 3122011200
002 A000000 303 WEST MADISON STREET
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60606
003 000000 N
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007 C010100 1
007 C020100 THE YACKTMAN FUND
007 C030100 N
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007 C020200 THE YACKTMAN FOCUSED FUND
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008 B00AA01 A
008 C00AA01 801-41058
008 D01AA01 CHICAGO
008 D02AA01 IL
008 D03AA01 60606
010 A00AA01 SUNSTONE FINANCIAL GROUP, INC.
010 C01AA01 MILWAUKEE
010 C02AA01 WI
010 C03AA01 53202
012 A00AA01 FIRSTAR TRUST COMPANY
012 B00AA01 85-00410
012 C01AA01 MILWAUKEE
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<PAGE> PAGE 2
013 A00AA01 PRICE WATERHOUSE LLP
013 B01AA01 MILWAUKEE
013 B02AA01 WI
013 B03AA01 53202
015 A00AA01 FIRSTAR TRUST COMPANY
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020 B000001 94-1727783
020 C000001 344
020 A000002 GOLDMAN SACHS & CO.
020 B000002 13-5108880
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<PAGE> PAGE 3
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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 10
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<PAGE> PAGE 11
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SIGNATURE JON KIEKHOFER
TITLE ADMINISTRATOR
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<NAME> THE YACKTMAN FUND
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Exhibit to Accompany
Item 77B
Form N-SAR
The Yacktman Funds, Inc.
To the Shareholders and Board of Directors
of The Yacktman Funds, Inc.
In planning and performing our audit of the financial
statements of The Yacktman Fund and The Yacktman
Focused Fund (constituting The Yacktman Funds, Inc.,
hereafter referred to as the "Funds") for the year ended
December 31, 1997, we considered its internal control,
including control activities for safeguarding securities, in
order to determine our auditing procedures for the purposes
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 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 control activities. Generally, control
activities 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. Those control
activities include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and may 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 any specific internal control component 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 controls over safeguarding securities, that we
consider to be material weaknesses as defined above as of
December 31, 1997.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 28, 1998
Exhibit to Accompany
Item 77J (b)
Form N-SAR
The Yacktman Funds, Inc.
(the Fund)
According to the provisions of Statement of Position 93 - 2
(SOP 93 - 2) Determination, Disclosure and Financial
Statement Presentation of Income, Capital Gain and Return
of Capital Distributions by Investment Companies, the
Fund is required to report the accumulated net investment
income (loss) and accumulated net capital gain (loss)
accounts to approximate amounts available for future
distributions on a tax basis (or to offset future realized
capital gains). Accordingly, at December 31, 1997
reclassifications in The Yacktman Focused Fund were
recorded to undistributed net investment income to reduce
capital stock by $21,196.
This reclassification has no impact on the net asset value of
the Fund and is designed to present the Funds capital
account on a tax basis.
