<PAGE> PAGE 1
000 B000000 12/31/99
000 C000000 0000896165
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 THE STRATTON FUNDS, INC.
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008 C00AA01 801-8681
008 D01AA01 PLYMOUTH MEETING
008 D02AA01 PA
008 D03AA01 19462
008 D04AA01 1050
010 A00AA01 PFPC INC.
010 C01AA01 KING OF PRUSSIA
010 C02AA01 PA
010 C03AA01 19406
010 C04AA01 0903
011 A00AA01 PROVIDENT DISTRIBUTORS, INC.
011 B00AA01 8-46564
011 C01AA01 WEST CONSHOHOCKEN
011 C02AA01 PA
<PAGE> PAGE 2
011 C03AA01 19428
011 C04AA01 2961
012 A00AA01 PFPC INC.
012 B00AA01 85-825
012 C01AA01 KING OF PRUSSIA
012 C02AA01 PA
012 C03AA01 19406
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013 A00AA01 TAIT, WELLER & BAKER
013 B01AA01 PHILADELPHIA
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015 A00AA01 THE BANK OF NEW YORK
015 B00AA01 C
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020 A000002 BRIDGE TRADING COMPANY
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020 C000003 5
020 A000004 MORGAN STANLEY
020 B000004 13-2655998
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020 A000005 OFFUTT
020 B000005 52-1508686
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020 A000006 ALEX BROWN & SONS
020 B000006 52-1319768
020 C000006 3
020 A000007 KING (C.L.) & ASSOCIATES, INC.
020 B000007 13-2700327
020 C000007 2
020 A000008 FRANK RUSSELL
020 B000008 91-0604934
020 C000008 2
020 A000009 MERRILL LYNCH
020 B000009 13-5674085
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020 A000010 PAINE WEBBER
<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
SIGNATURE MICHELLE A. WHALEN
TITLE MANAGER COMPLIANCE
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000896165
<NAME> THE STRATTON FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> STRATTON SMALL-CAP VALUE FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 30,402,160
<INVESTMENTS-AT-VALUE> 35,757,363
<RECEIVABLES> 87,074
<ASSETS-OTHER> 318,830
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,163,267
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 109,249
<TOTAL-LIABILITIES> 109,249
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,807,102
<SHARES-COMMON-STOCK> 1,855,051
<SHARES-COMMON-PRIOR> 2,128,199
<ACCUMULATED-NII-CURRENT> 16,103
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (124,390)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,355,203
<NET-ASSETS> 36,054,018
<DIVIDEND-INCOME> 880,735
<INTEREST-INCOME> 68,580
<OTHER-INCOME> 0
<EXPENSES-NET> 432,798
<NET-INVESTMENT-INCOME> 516,517
<REALIZED-GAINS-CURRENT> 1,034,763
<APPREC-INCREASE-CURRENT> (2,192,714)
<NET-CHANGE-FROM-OPS> (641,434)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 501,810
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 279,605
<NUMBER-OF-SHARES-REDEEMED> 572,731
<SHARES-REINVESTED> 19,978
<NET-CHANGE-IN-ASSETS> (6,735,287)
<ACCUMULATED-NII-PRIOR> 1,396
<ACCUMULATED-GAINS-PRIOR> (1,159,153)
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<GROSS-ADVISORY-FEES> 229,118
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 432,798
<AVERAGE-NET-ASSETS> 39,890,538
<PER-SHARE-NAV-BEGIN> 20.11
<PER-SHARE-NII> 0.278
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</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL STRUCTURE
Shareholders and Board of Directors
The Stratton Funds, Inc.
Plymouth Meeting, Pennsylvania
In planning and performing our audit of the financial statements of
The Stratton Funds, Inc. for the period ended December 31, 1999, we
considered its internal control structure, including procedures 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 the internal control structure.
The management of the Fund is responsible for establishing and maintaining
an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are
to provide management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with management's
authorization and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also, projection
of any evaluation of the structure 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 the internal control structure would not necessarily
disclose all matters in the internal control structure 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 the specific internal control structure
elements 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 the internal control
structure, including procedures for safeguarding securities, that we
consider to be material weaknesses, as defined above, as of December 31,
1999.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission, and should not be used for any
other purpose.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 21, 2000
