BABSON D L BOND TRUST, 497, 1996-04-04

BABSON D L BOND TRUST
497, 1996-04-04

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PROSPECTUS
March 31, 1996

D. L. BABSON
BOND TRUST

Managed and Distributed By:
JONES & BABSON, INC.
Three Crown Center
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Toll-Free 1-800-4-BABSON
(1-800-422-2766)
In the Kansas City area 471-5200

Investment Counsel:
DAVID L. BABSON & CO. INC.
Cambridge, Massachusetts

INVESTMENT OBJECTIVE

The D.L. Babson Bond Trust offers two Portfolios with differing maturity
lengths to investors who share the Fund's objective of providing maximum
current income and reasonable stability of principal, consistent with
its quality and maturity standards, by investing in a diversified
portfolio of fixed income securities, and who especially want the
portfolio supervision of the staff of David L. Babson & Co. Inc. This
Fund is not intended to be a complete investment program. (For a
discussion of risk factors see page 9 of this prospectus.)

PURCHASE INFORMATION

Minimum Investment
(each Portfolio selected)

Initial Purchase $ 500
Initial IRA and Uniform Transfers (Gifts)
to Minors Purchases $ 250
Subsequent Purchase:
By Mail $ 50
By Telephone or Wire $ 1,000
All Automatic Purchases $ 100

Shares are purchased and redeemed at net asset value. There are no
sales, redemption or Rule 12b-1 distribution charges. If you need
further information, please call the Trust at the telephone numbers
indicated.

ADDITIONAL INFORMATION

This prospectus should be read and retained for future reference. It
contains the information that you should know before you invest. A
"Statement of Additional Information" of the same date as this
prospectus has been filed with the Securities and Exchange Commission
and is incorporated by reference. Investors desiring additional
information about the Trust may obtain a copy without charge by writing
or calling the Trust.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS
Page
Fund Expenses 3
Financial Highlights 5
Investment Objective and Portfolio Management Policy 7
Repurchase Agreements 9
Risk Factors 9
Investment Restrictions 10
Performance Measures 10
How to Purchase Shares 11
Initial Investments 11
Investments Subsequent to Initial Investment 12
Telephone Investment Service 12
Automatic Monthly Investment Plan 13
How to Redeem Shares 13
Systematic Redemption Plan 15
How to Exchange Shares Between Babson Funds 15
How Share Price is Determined 16
Trustees and Officers 17
Management and Investment Counsel 17
General Information and History 19
Dividends, Distributions and Their Taxation 19
Shareholder Services 21
Shareholder Inquiries 22

D.L. BABSON BOND TRUST
FUND EXPENSES

Portfolio L

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees .95%
12b-1 fees None
Other expenses .02%
Total Fund operating expenses .97%

You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:

1 Year 3 Year 5 Year 10 Year

$10 $31 $54 $119

The above information is provided in order to assist you in
understanding the various costs and expenses that a shareholder of the
Fund will bear directly or indirectly. The expenses set forth above are
for the fiscal year ended November 30, 1995. The example should not be
considered a representation of past or future expenses. Actual expenses
may be greater or less than those shown.

D.L. BABSON BOND TRUST
FUND EXPENSES

Portfolio S

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees .65%*
12b-1 fees None
Other expenses .02%
Total Fund operating expenses .67%

You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:

1 Year 3 Year 5 Year 10 Year

$7 $21 $37 $83

* Reduced from .95% by the Board of Trustees through March 31, 1997.

FINANCIAL HIGHLIGHTS

The following financial highlights for each of the ten years in the
period ended November 30, 1995, have been derived from audited financial
statements of D.L. Babson Bond Trust. Such information for each of the
five years in the period ended November 30, 1995, should be read in
conjunction with the financial statements of the Trust and the report of
Ernst & Young LLP, independent auditors, appearing in the November 30,
1995, Annual Report to Shareholders which is incorporated by reference
in this prospectus. The information for each of the five years in the
period ended November 30, 1990, is not covered by the report of Ernst &
Young LLP.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PORTFOLIO L 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986

Net asset value,
beginning of year $ 1.47 $ 1.67 $ 1.62 $ 1.60 $ 1.53 $ 1.57 $ 1.52 $ 1.58 $ 1.68 $ 1.58

Income from investment
operations:

Net investment income .108 .108 .116 .124 .130 .134 .140 .154 .150 .157

Net gains or losses
on securities (both
realized and unrealized) .110 (.149) .061 .020 .071 (.039) .051 (.018) (.140) .101

Total from investment
operations .218 (.041) .177 .144 .201 .095 .191 .136 .010 .258

Less distributions:

Dividends from net
investment income (.108) (.108) (.116) (.124) (.131) (.135) (.141) (.196) (.110) (.158)

Distributions from
capital gains - (.051) (.011) - - - - - - -

Total distributions (.108) (.159) (.127) (.124) (.131) (.135) (.141) (.196) (.110) (.158)

Net asset value, end of year $ 1.58 $ 1.47 $ 1.67 $ 1.62 $ 1.60 $ 1.53 $ 1.57 $ 1.52 $ 1.58 $ 1.68

Total return 15% (3)% 11% 9% 14% 6% 13% 8% 1% 16%

Ratios/Supplemental Data

Net assets, end of year
(in millions) $ 161 $ 140 $ 162 $ 142 $ 114 $ 90 $ 77 $ 66 $ 65 $ 70

Ratio of expenses to
average net assets .97% .97% .98% .99% .98% .97% .97% .97% .97% .97%

Ratio of net investment
income to average
net assets 7.06% 6.95% 7.00% 7.67% 8.42% 8.81% 9.19% 9.99% 9.29% 9.42%

Portfolio turnover rate 50% 40% 80% 54% 75% 51% 51% 43% 54% 41%

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PORTFOLIO S 1995 1994 1993 1992 1991 1990 1989 1988*

Net asset value,
beginning of year $ 9.43 $10.48 $10.33 $10.30 $ 9.85 $10.01 $ 9.82 $10.00

Income from investment
operations:

Net investment income .726 .694 .718 .753 .808 .853 .810 .457

Net gains or losses
on securities (both
realized and unrealized) .470 (.899) .207 .054 .450 (.160) .190 (.18)

Total from investment
operations 1.196 (.205) .925 .807 1.258 .693 1.00 .277

Less distributions:

Dividends from net
investment income (.726) (.694) (.718) (.753) (.808) (.853) (.810) (.457)

Distributions from
capital gains - (.151) (.057) (.024) - - - -

Total distributions (.726) (.845) (.775) (.777) (.808) (.853) (.810) (.457)

Net asset value,
end of year $ 9.90 $ 9.43 $10.48 $10.33 $10.30 $ 9.85 $10.01 $ 9.82

Total return 13% (2)% 9% 8% 13% 7% 11% 3%

Ratios/Supplemental Data

Net assets, end of year
(in millions) $ 33 $ 30 $ 36 $ 31 $ 14 $ 7 $ 5 $ 3

Ratio of expenses to
average net assets .67% .67% .68% .67% .66% .78% .91% .70%

Ratio of net investment
income to average
net assets 7.47% 7.02% 6.80% 7.22% 7.98% 8.65% 8.28% 7.68%

Ratio of expenses to
average net assets before
voluntary reduction of
management fee .97% .97% .98% .97% .96% 1.08% 1.21% -

Portfolio turnover rate 57% 42% 147% 47% 60% 35% 27% 4%

<FN>
<F1>* Portfolio S became effective on March 31, 1988. On April 19, 1988,
10,875 shares were issued at a net asset value of $10.00 per share. The
percentage amounts for the period from April 19, 1988 to November 30,
1988 have been annualized.
</FN>
</TABLE>

INVESTMENT OBJECTIVE AND
PORTFOLIO MANAGEMENT POLICY

Babson Bond Trust's investment objective is to provide shareholders with
maximum current income and reasonable stability of principal, consistent
with its quality and maturity standards, by investing in a diversified
portfolio of fixed-income securities. (The Babson Bond Trust is a mutual
fund organized as a common law trust and may also be referred to
throughout this Prospectus as the Trust or the Fund.) The Trust offers
two portfolios: Portfolio L is expected to have a weighted average
maturity beyond five years, and Portfolio S is expected to have a
weighted average maturity of five years or less.

Each Portfolio normally will invest at least 80% of its assets in debt
securities such as: (1) direct or guaranteed obligations of the U.S.
government and its agencies, and (2) investment quality debt securities
issued by corporations or other business organizations including notes
and bonds.

In order to provide for unexpected redemptions and to enhance portfolio
flexibility, each Portfolio may, from time to time, maintain a
significant portion of its assets in reserves. These reserves will be
held in cash or short-term debt obligations such as U.S. treasury bills,
commercial paper, certificates of deposit, bankers' acceptances and
repurchase agreements.

The Fund's investment objective and policy as described in this section
will not be changed without approval of a majority of the Fund's
outstanding shares.

Although short-term trading profits are not a goal of the Trust, it is
possible that it may engage in trading activity in order to take
advantage of opportunities to enhance yield, protect principal or
improve liquidity.

For the fiscal years ended November 30, 1995, November 30, 1994 and
November 30, 1993, the total dollar amount of brokerage commissions paid
by the Trust and the annual portfolio turnover rate were as follows:

Portfolio L
Portfolio
Fiscal Brokerage Turnover
Year Commissions Rate

1995 None 50%
1994 None 40%
1993 None 80%

Portfolio S
Portfolio
Fiscal Brokerage Turnover
Year Commissions Rate

1995 None 57%
1994 None 42%
1993 None 147%

The Trust cannot guarantee that its objective will be achieved because
there are inherent risks in the ownership of fixed-income investments.
The value of each Portfolio's shares will reflect changes in the market
values of its investments which will vary inversely with changes in
interest rates. Dividends paid by the Trust will vary according to the
income it receives from its investments. However, the Trust will seek,
through careful management and diversification, to reduce these risks
and enhance the opportunities for maximizing current income.

Portfolio Quality Standards

Each Portfolio's investments in securities issued by corporations or
other business organizations will usually be rated at the time of
purchase within the top three classifications of either Moody's
Investors Service, Inc. (Moody's) (Aaa, Aa and A) or Standard & Poor's
Corp. (S&P) (AAA, AA and A).

Up to 25% of a Portfolio's assets, however, may be invested in
securities rated Baa by Moody's Investors Service or BBB by Standard &
Poor's Corp. Bonds in this category are regarded as having an adequate
capacity to pay principal and interest. Such bonds are considered
investment grade but have speculative characteristics. This policy
may be changed by the Trust's Board of Trustees. It is anticipated that
the Trust will use obligations secured by specific assets of the issuing
corporation (such as mortgage bonds and equipment trusts) as well as
unsecured debentures which represent claims on the general credit of the
issuer.

Each Portfolio will invest only in the following "U.S. Government
Securities":

1. Direct obligations of the U.S. Government such as bills, notes,
bonds and other debt securities issued by the U.S. Treasury.

2. Obligations of U.S. Government agencies and instrumentalities
which are secured by the full faith and credit of the U.S. Treasury,
such as securities of the Government National Mortgage Association, the
Export-Import Bank, or the Student Loan Marketing Association, or which
are secured by the right of the issuer to borrow from the Treasury such
as securities issued by the Federal Financing Bank or the U.S. Postal
Service; or are supported by the credit of the government agency or
instrumentality itself, such as securities of the Federal Home Loan
Banks, Federal Farm Credit Banks, or the Federal National Mortgage
Association.

Each Portfolio may also invest, at the time of purchase, up to 20% of
its assets in U.S. dollar-denominated securities issued in the United
States by: (1) the Canadian Federal Government or by Canadian Provincial
Governments including any agency or instrumentality of either as long as
their obligations are guaranteed as to both principal and interest by
either government, and (2) by Canadian corporations so long as these
securities are rated at the time of purchase within the top three
classifications of either Moody's Investors Service, Inc. (Aaa, Aa and
A) or Standard & Poor's Corp. (AAA, AA and A).

Each Portfolio may invest in commercial paper, including variable rate
master demand notes, of companies whose commercial paper is rated P-1 or
P-2 by Moody's or A-1 or A-2 by Standard & Poor's. If not rated by
either Moody's or Standard & Poor's, a company's commercial paper,
including variable rate master demand notes, may be purchased if the
company has an outstanding bond issue rated A or higher by Moody's or by
S&P.

Each Portfolio may invest in variable rate master demand notes which
represent a borrowing arrangement under a letter of agreement between a
commercial paper issuer and an institutional lender. Applicable interest
rates are determined on a formula basis and are adjusted on a monthly,
quarterly, or other term as set out in the agreement. They vary as to
the right of the lender to demand payment. It is not generally
contemplated that such instruments will be traded, and there is no
secondary market for these notes, although they are redeemable (and thus
immediately repayable by the borrower) at face value, plus accrued
interest, at any time. In connection with variable rate master demand
notes, the Trust's investment manager will monitor on an on-going basis
the earning power, cash flow and other liquidity ratios of the issuer,
and the borrower's ability to pay principal and interest on demand.

Each Portfolio may invest in certificates of deposit, bankers'
acceptances, and other commercial bank short-term obligations issued
domestically by United States banks having assets of at least $1 billion
and which are members of the Federal Deposit Insurance Corporation, or
such securities which may be issued by holding companies of such banks.

Each Portfolio may invest in issues of the United States Treasury or a
United States Government agency subject to repurchase agreements. The
use of repurchase agreements by the Fund involves certain risks. For a
discussion of these risks see "Risk Factors Applicable to Repurchase
Agreements."

Portfolio Maturity Standards

In general, the average weighted maturity of Portfolio L will be kept
within a range of 7 to 15 years, and the average weighted maturity of
Portfolio S will be kept within a range of 2 to 5 years. It will be the
policy of each Portfolio to include maturities outside these ranges when
they appear to be best suited to its investment objective. Changes in
interest rates affect the price of each Portfolio's shares inversely.
Normally, an interest rate decline will result in a share price
increase. Conversely, as interest rates rise, share prices are likely to
decline. Future interest rates cannot be accurately and consistently
forecast. Nevertheless, when management believes that interest rates are
likely to rise in the future, it will tend to shorten portfolio
maturities so that it may reinvest maturing holdings as soon as possible
and thereby obtain higher yields. When management believes that interest
rates are likely to fall in the future, it will seek to preserve and
extend the Trust's yields by lengthening the maturities of the portfolio
holdings.

REPURCHASE AGREEMENTS

A repurchase agreement involves the sale of securities to the Trust with
the concurrent agreement by the seller to repurchase the securities at
the Trust's cost plus interest at an agreed rate upon demand or within a
specified time, thereby determining the yield during the purchaser's
period of ownership. This result is a fixed rate of return insulated
from market fluctuations during such period. Under the Investment
Company Act of 1940, repurchase agreements are considered loans by the
Trust.

The Trust will enter into such repurchase agreements only with United
States banks having assets in excess of $1 billion which are members of
the Federal Deposit Insurance Corporation, and with certain securities
dealers who meet the qualifications set from time to time by the Board
of Trustees of the Trust. The term to maturity of a repurchase agreement
normally will be no longer than a few days. Repurchase agreements maturing
in more than seven days and other illiquid securities will not exceed 10%
of the total assets of the Trust.

RISK FACTORS

Risk Factors
Peculiar to
Fixed Income Obligations

The yield and the principal value of fixed income instruments are
sensitive to fluctuations in interest rates, and it is possible that an
issuer may default. Each Portfolio will seek to minimize these risks
through diversification and careful selection among securities
considered to be high quality.

Risk Factors
Applicable to
Repurchase Agreements

The use of repurchase agreements involves certain risks. For example, if
the seller of the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities has
declined, the Trust may incur a loss upon disposition of them. If the
seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, disposition of
the underlying securities may be delayed pending court proceedings.
Finally, it is possible that the Trust may not be able to perfect its
interest in the underlying securities. While the Trust's management
acknowledges these risks, it is expected that they can be controlled
through stringent security selection criteria and careful monitoring
procedures.

INVESTMENT RESTRICTIONS

In addition to the investment objective and portfolio management
policies set forth under the caption "Investment Objective and Portfolio
Management Policy," the Trust is subject to certain other restrictions
which may not be changed without approval of the lesser of: (1) at least
67% of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Trust are present
or represented by proxy, or (2) more than 50% of the outstanding voting
securities of the Trust. Among these restrictions, the more important
ones are that the Trust will not purchase the securities of any issuer
if more than 5% of the Trust's total assets would be invested in the
securities of such issuer, or the Trust would hold more than 10% of any
class of voting securities of such issuer; the Fund will not make any
loan (the purchase of a security subject to a repurchase agreement or
the purchase of a portion of an issue of publicly distributed debt
securities is not considered the making of a loan); and the Trust will
not borrow money, securities or other property in any event or for any
purpose whatsoever; or issue any security senior to the shares
authorized by the Trust Indenture. The full text of these restrictions
is set forth in the "Statement of Additional Information."

There is no limitation with respect to investments in U.S. Treasury
Bills, or other obligations issued or guaranteed by the federal
government, its agencies and instrumentalities.

PERFORMANCE MEASURES

From time to time, the Fund may advertise its performance in various
ways, as summarized below. Further discussion of these matters also
appears in the "Statement of Additional Information." A discussion of
Fund performance is included in the Fund's Annual Report to Shareholders
which is available from the Fund upon request at no charge.

Total Return

The Fund may advertise "average annual total return" for each Portfolio
over various periods of time. Such total return figures show the average
percentage change in value of an investment in a Portfolio from the
beginning date of the measuring period to the end of the measuring
period. These figures reflect changes in the price of the Funds' shares
and assume that any income dividends and/or capital gains distributions
made by a Portfolio during the period were reinvested in shares of the
Portfolio. Figures will be given for recent one-, five- and ten-year
periods (if applicable), and may be given for other periods as well
(such as from commencement of a Portfolio's operations, or on a year-by-
year basis). When considering "average" total return figures for periods
longer than one year, it is important to note that a Portfolio's annual
total return for any one year in the period might have been greater or
less than the average for the entire period.

Performance Comparisons

In advertisements or in reports to shareholders, each Portfolio may
compare its performance to that of other mutual funds with similar
investment objectives and to bond or other relevant indices. For
example, the Fund may compare its performance to rankings prepared by
Lipper Analytical Services, Inc. (Lipper), a widely recognized
independent service which monitors the performance of mutual funds. The
Fund may compare its performance to the Shearson/Lehman
Government/Corporate Index, an unmanaged index of government and
corporate bonds. Performance information, rankings, ratings, published
editorial comments and listings as reported in national financial
publications such as Kiplinger's Personal Finance Magazine, Business
Week, Morningstar Mutual Funds, Investor's Business Daily, Institutional
Investor, The Wall Street Journal, Mutual Fund Forecaster, No-Load
Investor, Money, Forbes, Fortune and Barron's may also be used in
comparing performance of the Fund. Performance comparisons should not be
considered as representative of the future performance of any Fund.
Further information regarding the performance of the Fund is contained
in the "Statement of Additional Information."

Performance rankings, recommendations, published editorial comments and
listings reported in Money, Barron's, Kiplinger's Personal Finance
Magazine, Financial World, Forbes, U.S. News & World Report, Business
Week, The Wall Street Journal, Investors Business Daily, USA Today,
Fortune and Stanger's may also be cited (if the Fund is listed in any
such publication) or used for comparison, as well as performance
listings and rankings from Morningstar Mutual Funds, Personal Finance,
Income and Safety, The Mutual Fund Letter, No-Load Fund Investor, United
Mutual Fund Selector, No-Load Fund Analyst, No-Load Fund X, Louis
Rukeyser's Wall Street newsletter, Donoghue's Money Letter, CDA
Investment Technologies, Inc., Wiesenberger Investment Companies
Service, and Donoghue's Mutual Fund Almanac.

HOW TO PURCHASE SHARES

Shares are purchased at net asset value (no sales charge) from the Fund
through its agent, Jones & Babson, Inc., Three Crown Center, 2440
Pershing Road, Suite G-15, Kansas City, MO 64108. For information call
toll free 1-800-4-BABSON (1-800-422-2766), or in the Kansas City area
471-5200. If an investor wishes to engage the services of any other
broker to purchase (or redeem) shares of the Fund, a fee may be charged
by such broker. The Fund will not be responsible for the consequences of
delays including delays in the banking or Federal Reserve wire systems.

You do not pay a sales commission when you buy shares of the Fund.
Shares are purchased at each Portfolio's net asset value (price) per
share next effective after a purchase order and payment have been
received by the Fund. In the case of certain institutions which have
made satisfactory payment arrangements with the Fund, orders may be
processed at the net asset value per share next effective after a
purchase order has been received by the Fund.

The Fund reserves the right in its sole discretion to withdraw all or
any part of the offering made by this prospectus or to reject purchase
orders when, in the judgment of management, such withdrawal or rejection
is in the best interest of the Fund and its shareholders. The Fund also
reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with
respect to any person or class of persons, which include shareholders of
the Fund's special investment programs. The Fund reserves the right to
refuse to accept orders for Fund shares unless accompanied by payment,
except when a responsible person has indemnified the Fund against losses
resulting from the failure of investors to make payment. In the event
that the Fund sustains a loss as the result of failure by a purchaser to
make payment, the Fund's underwriter, Jones & Babson, Inc. will cover
the loss.

INITIAL INVESTMENTS

Initial investments - By mail. You may open an account and make an
investment by completing and signing the application which accompanies
this prospectus. Make your check ($500 minimum for each Portfolio
selected unless your purchase is pursuant to an IRA or the Uniform
Transfers (Gifts) to Minors Act in which case the minimum initial
purchase is $250) payable to UMB Bank, n.a. Mail your application and
check to:

D.L. Babson Bond Trust
Three Crown Center
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Initial investments - By wire. You may purchase shares of a Portfolio
by wiring funds ($1,000 minimum for each Portfolio selected) through the
Federal Reserve Bank to the custodian, UMB Bank, n.a. Prior to sending
your money, you must call the Fund toll free 1-800-4-BABSON (1-800-422-
2766) or in the Kansas City area 471-5200 and provide it with the
identity of the registered account owner, the registered address, the
Social Security or Taxpayer Identification Number of the registered
owner, the amount being wired, the name and telephone number of the
wiring bank and the person to be contacted in connection with the order.
You will then be provided a Fund account number, after which you should
instruct your bank to wire the specified amount, along with the account
number and the account registration to:

UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For D.L. Babson Bond Trust (insert name
and number of Portfolio)
Portfolio L /AC=987032-6256
Portfolio S /AC=987032-6248
OBI=(Assigned Fund number and name in which
registered.)

A completed application must be sent to the Fund as soon as possible so
the necessary remaining information can be recorded in your account.
Payment of redemption proceeds will be delayed until the completed
application is received by the Fund.

INVESTMENTS SUBSEQUENT
TO INITIAL INVESTMENT

You may add to your Fund account at any time in amounts of $50 or more
if purchases are made by mail, or $1,000 or more if purchases are made
by wire or telephone. Automatic monthly investments must be in amounts
of $100 or more.

Checks should be mailed to the Fund at its address, and make them
payable to UMB Bank, n.a. Always identify your account number or include
the detachable reminder stub which accompanies each confirmation.

Wire share purchases should include your account registration, your
account number and the Babson Fund (Portfolio) in which you are
purchasing shares. It also is advisable to notify the Fund by telephone
that you have sent a wire purchase order to the bank.

TELEPHONE INVESTMENT SERVICE

To use the Telephone Investment Service, you must first establish your
Fund account and authorize telephone orders of $1,000 or more in the
application form, or, subsequently, on a special authorization form
provided upon request. If you elect the Telephone Investment Service,
you may purchase Fund shares by telephone and authorize the Fund to
draft your checking account for the cost of the shares so purchased. You
will receive the next available price after the Fund has received your
telephone call. Availability and continuance of this privilege is
subject to acceptance and approval by the Fund and all participating
banks. During periods of increased market activity, you may have
difficulty reaching the Fund by telephone, in which case you should
contact the Fund by mail or telegraph. The Fund will not be responsible
for the consequences of delays, including delays in the banking or
Federal Reserve wire systems.

The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are not
followed, the Fund may be liable for losses due to unauthorized or
fraudulent instructions. Such procedures may include, but are not
limited to requiring personal identification prior to acting upon
instructions received by telephone, providing written confirmations of
such transactions, and/or tape recording of telephone instructions.

The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this
service at any time upon 15 days written notice to shareholders, and to
terminate or modify the privileges without prior notice in any
circumstances where such termination or modification is in the best
interest of the Fund and its investors.

AUTOMATIC MONTHLY
INVESTMENT PLAN

You may elect to make monthly investments in a constant dollar amount
from your checking account ($100 minimum). The Fund will draft your
checking account on the same day each month in the amount you authorize
in your application, or, subsequently, on a special authorization form
provided upon request. Availability and continuance of this privilege is
subject to acceptance and approval by the Fund and all participating
banks. If the date selected falls on a day upon which the Fund shares
are not priced, investment will be made on the first date thereafter
upon which Fund shares are priced. The Fund will not be responsible for
the consequences of delays, including delays in the banking or Federal
Reserve wire systems.

HOW TO REDEEM SHARES

The Fund will redeem shares at the price (net asset value per share)
next computed after receipt of a redemption request in "good order."
(See "How Share Price is Determined.")

A written request for redemption, together with an endorsed share
certificate where a certificate has been issued, must be received by the
Fund in order to constitute a valid tender for redemption. For
authorization of redemptions by a corporation, it will also be necessary
to have an appropriate certified copy of resolutions on file with the
Fund before a redemption request will be considered in "good order." In
the case of certain institutions which have made satisfactory redemption
arrangements with the Fund, redemption orders may be processed by
facsimile or telephone transmission at net asset value per share next
effective after receipt by the Fund. If an investor wishes to engage the
services of any other broker to redeem (or purchase) shares of the Fund,
a fee may be charged by such broker.

To be in "good order" the request must include the following:

(1) A written redemption request or stock assignment (stock
power) containing the genuine signature of each registered owner exactly
as the shares are registered, with clear identification of the account
by registered name(s) and account number and the number of shares or the
dollar amount to be redeemed;

(2) any outstanding stock certificates representing shares to
be redeemed;

(3) signature guarantees as required (see Signature Guarantees);
and

(4) any additional documentation which the Fund may deem
necessary to insure a genuine redemption.

Where additional documentation is normally required to support
redemptions as in the case of corporations, fiduciaries, and others who
hold shares in a representative or nominee capacity, such as certified
copies of corporate resolutions, or certificates of incumbency, or such
other documentation as may be required under the Uniform Commercial Code
or other applicable laws or regulations, it is the responsibility of the
shareholder to maintain such documentation on file and in a current
status. A failure to do so will delay the redemption. If you have
questions concerning redemption requirements, please write or telephone
the Fund well ahead of an anticipated redemption in order to avoid any
possible delay.

Requests which are subject to special conditions or which specify an
effective date other than as provided herein cannot be accepted. All
redemption requests must be transmitted to the Fund at Three Crown
Center, 2440 Pershing Road, Suite G-15, Kansas City, Missouri 64108. The
Fund will redeem shares at the price (net asset value per share) next
computed after receipt of a redemption request in "good order." (See
"How Share Price is Determined.")

The Fund will endeavor to transmit redemption proceeds to the proper
party, as instructed, as soon as practicable after a redemption request
has been received in "good order" and accepted, but in no event later
than the third business day thereafter. Transmissions are made by mail
unless an expedited method has been authorized and specified in the
redemption request. The Fund will not be responsible for the
consequences of delays including delays in the banking or Federal
Reserve wire systems.

Redemptions will not become effective until all documents in the form
required have been received. In the case of redemption requests made
within 15 days of the date of purchase, the Fund will delay transmission
of proceeds until such time as it is certain that unconditional payment
in federal funds has been collected for the purchase of shares being
redeemed or 15 days from the date of purchase. You can avoid the
possibility of delay by paying for all of your purchases with a transfer
of federal funds.

Signature Guarantees are required in connection with all redemptions by
mail, or changes in share registration, except as hereinafter provided.
These requirements may be waived by the Fund in certain instances where
it appears reasonable to do so and will not unduly affect the interests
of other shareholders. Signature(s) must be guaranteed by an "eligible
Guarantor institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934. Eligible guarantor institutions include: (1)
national or state banks, savings associations, savings and loan
associations, trust companies, savings banks, industrial loan companies
and credit unions; (2) national securities exchanges, registered
securities associations and clearing agencies; or (3) securities
broker/dealers which are members of a national securities exchange or
clearing agency or which have a minimum net capital of $100,000. A
notarized signature will not be sufficient for the request to be in
proper form.

Signature guarantees will be waived for mail redemptions of $10,000 or
less, but they will be required if the checks are to be payable to
someone other than the registered owner(s), or are to be mailed to an
address different from the registered address of the shareholder(s), or
where there appears to be a pattern of redemptions designed to
circumvent the signature guarantee require-
ment, or where the Fund has other reason to believe that this requirement
would be in the best interests of the Fund and its shareholders.

The right of redemption may be suspended or the date of payment
postponed beyond the normal three-day period when the New York Stock
Exchange is closed or under emergency circumstances as determined by the
Securities and Exchange Commission.

Due to the high cost of maintaining smaller accounts, the Board of
Trustees has authorized the Fund to close shareholder accounts where
their value falls below the current minimum initial investment
requirement at the time of initial purchase as a result of redemptions
and not as the result of market action, and remains below this level for
60 days after each such shareholder account is mailed a notice of: (1)
the Fund's intention to close the account, (2) the minimum account size
requirement, and (3) the date on which the account will be closed if the
minimum size requirement is not met.

SYSTEMATIC REDEMPTION PLAN

If you own shares in an open account valued at $10,000 or more, and
desire to make regular monthly or quarterly withdrawals without the
necessity and inconvenience of executing a separate redemption request
to initiate each withdrawal, you may enter into a Systematic Withdrawal
Plan by completing forms obtainable from the Fund. For this service, the
manager may charge you a fee not to exceed $1.50 for each withdrawal.
Currently the manager assumes the additional expenses arising out of
this type of plan, but it reserves the right to initiate such a charge
at any time in the future when it deems it necessary. If such a charge
is imposed, participants will be provided 30 days notice.

Subject to a $50 minimum, you may withdraw each period a specified
dollar amount. Shares also may be redeemed at a rate calculated to
exhaust the account at the end of a specified period of time.

Dividends and capital gains distributions must be reinvested in
additional shares. Under all withdrawal programs, liquidation of shares
in excess of dividends and distributions reinvested will diminish and
may exhaust your account, particularly during a period of declining
share values.

You may revoke or change your plan or redeem all of your shares
remaining at any time. Withdrawal payments will be continued until the
shares are exhausted or until the Fund or you terminate the plan by
written notice to the other.

HOW TO EXCHANGE SHARES
BETWEEN BABSON FUNDS

Shareholders may exchange their Fund shares, which have been held in
open account for 30 days or more, and for which good payment has been
received for identically registered shares of any other Babson Fund, or
any other Portfolio in the Babson Fund Group which is legally registered
for sale in the state of residence of the investor, except Babson
Enterprise Fund, Inc., provided that the minimum amount exchanged has a
value of $1,000 or more and meets the minimum investment requirement of
the Fund or Portfolio into which it is exchanged.

Effective at the close of business on January 31, 1992, the Directors of
the Babson Enterprise Fund, Inc. took action to limit the offering of
that Fund's shares. Babson Enterprise Fund, Inc. will not accept any new
accounts, including IRAs and other retirement plans, until further
notice, nor will Babson Enterprise Fund accept transfers from
shareholders of other Babson Funds, who were not shareholders of record
of Babson Enterprise Fund at the close of business on January 31, 1992.
Investors may want to consider purchasing shares in Babson Enterprise
Fund II, Inc. as an alternative.

To authorize the Telephone/Telegraph Exchange Privilege, all registered
owners must sign the appropriate section on the original application, or
the Fund must receive a special authorization form, provided upon
request. During periods of increased market activity, you may have
difficulty reaching the Fund by telephone, in which case you should
contact the Fund by mail or telegraph. The Fund reserves the right to
initiate a charge for this service and to terminate or modify any or all
of the privileges in connection with this service at any time and
without prior notice under any circumstances where continuance of these
privileges would be detrimental to the Fund or its shareholders such as
an emergency, or where the volume of such activity threatens the ability
of the Fund to conduct business, or under any other circumstances, upon
60 days written notice to shareholders. The Fund will not be responsible
for the consequences of delays including delays in the banking or
Federal Reserve wire systems.

Exchanges by mail may be accomplished by a written request properly
signed by all registered owners identifying the account, the number of
shares or dollar amount to be redeemed for exchange, and the Babson Fund
into which the account is being transferred.

If you wish to exchange part or all of your shares in a Portfolio for
shares of another Fund or Portfolio in the Babson Fund Group, you should
review the prospectus of the Fund to be purchased, which can be obtained
from Jones & Babson, Inc. Any such exchange will be based on the
respective net asset values of the shares involved. An exchange between
Funds involves the sale of an asset. Unless the shareholder account is
tax-deferred, this is a taxable event.

HOW SHARE PRICE IS DETERMINED

In order to determine the price at which new shares of each Portfolio
will be sold and at which issued shares presented for redemption will be
liquidated, the net asset value per share is computed once daily, Monday
through Friday, at the specific time during the day that the Board of
Trustees sets at least annually, except on days on which changes in the
value of portfolio securities will not materially affect the net asset
value, or days during which no security is tendered for redemption and
no order to purchase or sell such security is received by the Fund, or
customary holidays. For a list of the holidays during which the Fund is
not open for business, see "How Share Price is Determined" in the
"Statement of Additional Information."

The price at which new shares of each Portfolio will be sold and at
which issued shares presented for redemption will be liquidated is
computed once daily at 4:00 P.M. (Eastern Time), except on those days
when the Fund is not open for business.

The per share calculation is made by subtracting from each Portfolio's
total assets any liabilities and then dividing into this amount the
total outstanding shares as of the date of the calculation.

Debt securities (other than short-term obligations), including listed
issues, are valued on the basis of valuations furnished by a pricing
service which utilizes both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate factors
such as institution-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon exchange or over-
the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Use of the pricing service
has been approved by the Trust's Board of Trustees. Short-term
obligations are valued at amortized cost, which constitutes fair value
as determined by the Board of Trustees. If acquired, preferred stocks,
common stocks, and warrants, if listed on an exchange, will be valued at
the last sale price on the principal exchange upon which the security is
traded on the Trust evaluation date. If not traded, or if unlisted, the
security is valued at the mean between the last current bid and asked
prices. Portfolio securities for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at
the direction of the Board of Trustees.

TRUSTEES AND OFFICERS

The officers of the Fund manage its day-to-day operations. The Fund's
manager and its officers are subject to the supervision and control of
the Board of Trustees. A list of the trustees and officers of the Fund
and a brief statement of their present positions and principal
occupations during the past five years is set forth in the "Statement of
Additional Information."

MANAGEMENT AND INVESTMENT COUNSEL

Jones & Babson, Inc. was founded in 1960. It assumed the management of
the Trust on March 1, 1972. Jones & Babson, Inc. also acts as the
Trust's principal underwriter. Pursuant to the current Management
Agreement, Jones & Babson, Inc. provides or pays the cost of all
management, supervisory and administrative services required in the
normal operation of the Trust. This includes investment management and
supervision; fees of the custodian, independent auditors and legal
counsel; remuneration of Trustees, officers and other personnel; rent;
shareholder services, including the maintenance of the shareholder
accounting system and transfer agency; and such other items as are
incidental to the Trust's administration.

Not considered normal operating expenses, and therefore payable by the
Trust, are taxes, fees and other charges of governments and their
agencies including the cost of qualifying the Trust's shares for sale in
any jurisdiction, interest, brokerage costs, dues, and all costs and
expenses, including but not limited to legal and accounting fees
incurred in anticipation of or arising out of litigation or
administrative proceedings to which the Trust, its trustees or officers
may be subject or a party thereto.

As a part of the Management Agreement, Jones & Babson, Inc. employs at
its own expense David L. Babson & Co. Inc. as its investment counsel to
assist in the investment advisory function. David L. Babson & Co. Inc.
is an investment counseling firm founded in 1940. It serves a broad
variety of individual, corporate and other institutional clients by
maintaining an extensive research and analytical staff. It has an
experienced investment analysis and research staff which eliminates the
need for Jones & Babson, Inc. and the Trust to maintain an extensive
duplicate staff, with the consequent increase in the cost of investment
advisory service. The cost of the services of David L. Babson & Co. Inc.
is included in the fee of Jones & Babson, Inc. The Management Agreement
limits the liability of the manager and its investment counsel, as well
as their officers, directors and personnel, to acts or omissions
involving willful malfeasance, bad faith, gross negligence, or reckless
disregard of their duties. Edward L. Martin became the manager of Babson
Bond Trust in 1984, and also heads the Babson fixed income department. A
Chartered Financial Analyst with over 20 years of investment management
experience, he joined David L. Babson & Co. in 1984.

As compensation for all the foregoing services, Portfolio L and
Portfolio S pay Jones & Babson, Inc. a fee amounting to 95/100 of one
percent (.95%) of each Portfolio's average daily net assets except that
during the period from May 1, 1988 through March 31, 1997 Jones & Babson
has waived 30/100 of one percent (.30%) of the fee for Portfolio S with
the effect that the fee charged for Portfolio S is 65/100 of one percent
(.65%).

The annual fee charged by Jones & Babson, Inc. is higher than the fees
of most other investment advisers whose charges cover only investment
advisory services with all remaining operational expenses absorbed
directly by the Fund. Yet, it compares favorably with these other
advisers when all expenses to Trust shareholders are taken into account.
Jones & Babson, Inc. pays David L. Babson & Co. Inc. a fee of 25/100 of
one percent (.25%) of the average daily total net assets, which is
computed daily and paid semimonthly. This fee has been reduced to 15/100
of one percent (.15%) for Portfolio S until March 31, 1997. The total
expenses of Portfolio L for the fiscal year ended November 30, 1995
amounted to 97/100 of one percent (.97%) of its average net assets. The
total expenses of Portfolio S for the fiscal year ended November 30,
1995 amounted to 67/100 of one percent (.67%) of its average net assets.
In order to reduce the expense ratio of Portfolio S during its initial
periods of operations, while expenses relative to income may otherwise
be higher than anticipated, the Fund's manager, Jones & Babson, Inc.,
has waived 30/100 of one percent (.30%) of the fee for Portfolio S with
the effect that the fee charged for Portfolio S is 65/100 of one percent
(.65%) during the period from May 1, 1988 through March 31, 1997.

Certain officers and trustees of the Trust are also officers or
directors or both of other Babson Funds, Jones & Babson, Inc. or David
L. Babson & Co. Inc.

Jones & Babson, Inc. is a wholly-owned subsidiary of Business Men's
Assurance Company of America which is considered to be a controlling
person under the Investment Company Act of 1940. Assicurazioni Generali
S.p.A., an insurance organization founded in 1831 based in Trieste,
Italy, is considered to be a controlling person and is the ultimate
parent of Business Men's Assurance Company of America. Mediobanca is a
5% owner of Generali.

David L. Babson & Co. Inc. is a wholly-owned subsidiary of Massachusetts
Mutual Life Insurance Company headquartered in Springfield,
Massachusetts. Massachusetts Mutual Life Insurance Company is an
insurance organization founded in 1851 and is considered to be a
controlling person of David L. Babson & Co. Inc., under the Investment
Company Act of 1940.

The current Management Agreement between the Trust and Jones & Babson,
Inc., which includes the Investment Counsel Agreement between Jones &
Babson, Inc. and David L. Babson & Co. Inc., will continue in effect
until October 31, 1996, and will continue automatically for successive
annual periods ending each October 31 so long as such continuance is
specifically approved at least annually by the Board of Trustees of the
Trust or by the vote of a majority of the outstanding voting securities
of the Trust, and provided also that such continuance is approved by a
vote of the majority of the Trustees who are not parties to the
Agreements or interested persons of any such party at a meeting held in
person and called specifically for the purpose of evaluating and voting
on such approval. Both Agreements provide that either party may
terminate by giving the other 60 days written notice. The Agreements
terminate automatically if assigned by either party.

GENERAL INFORMATION AND HISTORY

The Trust was organized in Kansas City, Missouri, as a common law trust
under an Agreement and Declaration of Trust dated November 2, 1944,
which was amended and restated on February 24, 1989. It originally was
known as Mutual Trust. When it came under the management of Jones &
Babson, Inc., its name was changed to Babson (D.L.) Income Trust. On
February 14, 1984, shareholders changed its name to D.L. Babson Bond
Trust. On March 31, 1988, the issued and outstanding shares of
beneficial interest of the Trust were redesignated as "Portfolio L"
(longer term) and a second class or series of shares known as "Portfolio
S" (shorter term) was created. The Trust is an open-end, diversified,
fully-managed investment company commonly known as a mutual fund. Each
full and fractional share, when issued and outstanding, has: (1) equal
voting rights with respect to matters which affect the Trust in general
and with respect to matters relating solely to the interests of the
Portfolio for which issued, and (2) equal dividend, distribution and
redemption rights to the assets of the Portfolio for which issued and to
general assets, if any, of the Trust which are not specifically
allocated to either Portfolio. Shares when issued are fully paid and
non-assessable. Except for the priority of each share in the assets of
its Portfolio, the Fund will not issue any class of securities senior to
any other class. The initial par value of the shares was $1.00 each. On
September 30, 1955, this was changed to $0.25 each, and three additional
shares at that time were issued for each share then outstanding.
Shareholders do not have pre-emptive or conversion rights.

Non-cumulative voting - These shares have non-cumulative voting rights,
which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect 100% of the Trustees, if they choose
to do so, and in such event, the holders of the remaining less than 50%
of the shares voting will not be able to elect any Trustees.

The Fund's Agreement and Declaration of Trust permits the Fund to
operate without an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by the Investment
Company Act of 1940. There are procedures whereby the shareholders may
remove trustees. These procedures are described in the "Statement of
Additional Information" under the caption "Officers and Trustees." The
Fund has adopted the appropriate provisions in its By-Laws and may not,
at its discretion, hold annual meetings of shareholders for the
following purposes unless required to do so: (1) election of trustees;
(2) approval of any investment advisory agreement; (3) ratification of
the selection of independent auditors; and (4) approval of a
distribution plan. As a result, the Fund does not intend to hold annual
meetings.

The Fund may use the name "Babson" in its name so long as Jones &
Babson, Inc. is continued as manager and David L. Babson & Co. Inc. as
its investment counsel. Complete details with respect to the use of the
name are set out in the Management Agreement between the Fund and Jones
& Babson, Inc.

This prospectus omits certain of the information contained in the
registration statement filed with the Securities and Exchange
Commission, Washington, D.C. These items may be inspected at the offices
of the Commission or obtained from the Commission upon payment of the
fee prescribed.

DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION

At the close of each business day, dividends consisting of substantially
all of each Portfolio's net investment income are declared payable to
shareholders of record at the close of the previous business day, and
credited to their accounts. All daily dividends declared during a given
month will be distributed on the last day of the month. Dividends and

capital gains distributions, if any, are automatically reinvested in
additional shares at net asset value, unless the shareholder has elected
in writing to receive cash. The method of payment elected remains in
effect until the Fund is notified in writing to the contrary. If at the
time of a complete redemption and closing of a shareholder account,
there is net undistributed income to the credit of the shareholder, it
will be paid by separate check on the next dividend distribution date.
In the case of a partial redemption, any net undistributed credit will
be distributed on the next dividend date according to the shareholder's
instructions on file with the Fund. Shares begin earning income on the
day following the effective date of purchase. Income earned by the Fund
on weekends, holidays and other days on which the Fund is closed for
business is declared as a dividend on the next day on which the Fund is
open for business, except for month-ends when such dividend is declared
as of the last day of the month.

The Fund paid dividends each quarter from its inception to March, 1988,
and has paid monthly dividends from April, 1988, through the end of its
current fiscal year, November 30, 1995. Past dividends, however, are no
guarantee of future payouts.

Each Portfolio within the Fund has qualified and intends to continue to
qualify for taxation as a "regulated investment company" under the
Internal Revenue Code so that each Portfolio will not be subject to
federal income tax to the extent it distributes its income to
shareholders. Dividends, either in cash or reinvested in shares, paid by
a Portfolio from net investment income will be taxable to shareholders
as ordinary income. Due to the make-up of each Portfolio, it is
anticipated that only a small portion, if any, of dividends paid will
qualify for the 70% dividends-received deduction for corporations. The
portion of the dividends so qualified depends on the aggregate taxable
qualifying dividend income received by each Portfolio from domestic
(U.S.) sources. The Fund will send to shareholders a statement each year
advising the amount of the dividend income which qualifies for such
treatment.

Whether paid in cash or additional shares of a Portfolio, and regardless
of the length of time the shares in such Portfolio have been owned by
the shareholder, distributions from long-term capital gains are taxable
to shareholders as such, but are not eligible for the dividends-received
deduction for corporations. Shareholders are notified annually by the
Fund as to federal tax status of dividends and distributions paid by a
Portfolio. Such dividends and distributions may also be subject to state
and local taxes.

Exchange and redemption of Fund shares are taxable events for federal
income tax purposes. Shareholders may also be subject to state and
municipal taxes on such exchanges and redemptions. You should consult
your tax adviser with respect to the tax status of distributions from
the Fund in your state and locality.

Each Portfolio intends to declare and pay dividends and capital gains
distributions so as to avoid imposition of the federal excise tax. To do
so, each Portfolio expects to distribute an amount equal to: (1) 98% of
its calendar year ordinary income; (2) 98% of its capital gains net
income (the excess of short- and long-term capital gain over short- and
long-term capital loss) for the one-year period ending each November 30;
and (3) 100% of any undistributed ordinary or capital gain net income
from the prior calendar year. Dividends declared in October, November or
December and made payable to shareholders of record in such a month are
deemed to have been paid by the Fund and received by shareholders on
December 31 of such year, so long as the dividends are actually paid
before February 1 of the following year.

To comply with IRS regulations, the Fund is required by federal law to
withhold 31% of reportable payments (which may include dividends,
capital gains distributions, and redemptions) paid to shareholders who
have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Application,
or on a separate form supplied by the Fund, that their Social Security
or Taxpayer Identification Number provided is correct and that they are
not currently subject to backup withholding, or that they are exempt
from backup withholding.

The federal income tax status of all distributions will be reported to
shareholders each January as a part of the annual statement of
shareholder transactions. Shareholders not subject to tax on their
income will not be required to pay tax on amounts distributed to them.

THE TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED HEREIN FOR GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN TAX ADVISERS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF AN INVESTMENT IN THE FUND.

SHAREHOLDER SERVICES

The Fund and its manager offer shareholders a broad variety of services
described throughout this prospectus. In addition, the following
services are available:

Automatic Monthly Investment - You may elect to make monthly
investments in a constant dollar amount from your checking account ($100
minimum). The Fund will draft your checking account on the same day each
month in the amount you authorize in your application, or, subsequently,
on a special authorization form provided upon request.

Automatic Reinvestment - Dividends and capital gains distributions may
be reinvested automatically, or shareholders may elect to have dividends
paid in cash and capital gains reinvested, or to have both paid in cash.

Telephone Investments - You may make investments of $1,000 or more by
telephone if you have authorized such investments in your application,
or, subsequently, on a special authorization form provided upon request.
See "Telephone Investment Service."

Automatic Exchange - You may exchange shares from your account ($100
minimum) in any of the Babson Funds to an identically registered account
in any other fund in the Babson Group except Babson Enterprise Fund,
Inc. according to your instructions. Monthly exchanges will be continued
until all shares have been exchanged or until you terminate the
Automatic Exchange authorization. A special authorization form will be
provided upon request.

Transfer of Ownership - A shareholder may transfer shares to another
shareholder account. The requirements which apply to redemptions apply
to transfers. A transfer to a new account must meet initial investment
requirements.

Systematic Redemption Plan - Shareholders who own shares in open
account valued at $10,000 or more may arrange to make regular
withdrawals without the necessity of executing a separate redemption
request to initiate each withdrawal.

Sub-Accounting - Keogh and corporate tax qualified retirement plans, as
well as certain other investors who must maintain separate participant
accounting records, may meet these needs through services provided by
the Fund's manager, Jones & Babson, Inc. Investment minimums may be met
by accumulating the separate accounts of the group. Although there is
currently no charge for sub-accounting, the Fund and its manager reserve
the right to make reasonable charges for this service.

Prototype Retirement Plans - Jones & Babson, Inc. offers a defined
contribution prototype plan - The Universal Retirement Plan - which is
suitable for all who are self-employed, including sole proprietors,
partnerships, and corporations. The Universal Prototype includes both
money purchase pension and profit-sharing plan options.

Individual Retirement Accounts - Also available is an Individual
Retirement Account (IRA). The IRA uses the IRS model form of plan and
provides an excellent way to accumulate a retirement fund which will
earn tax-deferred dollars until withdrawn. An IRA may also be used to
defer taxes on certain distributions from employer-sponsored retirement
plans. You may contribute up to $2,000 of compensation each year ($2,250
if a spousal IRA is established), some or all of which may be
deductible. Consult your tax adviser concerning the amount of the tax
deduction, if any.

Simplified Employee Pensions (SEPs) - The Jones & Babson IRA may be
used with IRS Form 5305 - SEP to establish a SEP-IRA, to which the self-
employed individual may contribute up to 15% of net earned income or
$30,000, whichever is less. A SEP-IRA offers the employer the ability to
make the same level of deductible contributions as a Profit-Sharing Plan
with greater ease of administration, but less flexibility in plan
coverage of employees.

SHAREHOLDER INQUIRIES

Telephone inquiries may be made toll free to the Fund, 1-800-4-BABSON
(1-800-422-2766), or in the Kansas City area 471-5200.

Shareholders may address written inquiries to the Fund at:

D.L. Babson Bond Trust
Three Crown Center
2440 Pershing Road, Suite G-15
Kansas City, MO 64108

INDEPENDENT AUDITORS

ERNST & YOUNG LLP
Kansas City, Missouri

LEGAL COUNSEL

STRADLEY, RONON, STEVENS & YOUNG
Philadelphia, Pennsylvania
JOHN G. DYER
Kansas City, Missouri

CUSTODIAN

UMB BANK, n.a.
Kansas City, Missouri

TRANSFER AGENT

JONES & BABSON, INC.
Kansas City, Missouri

PART B

D. L. BABSON BOND TRUST

STATEMENT OF ADDITIONAL INFORMATION

March 31, 1996

This Statement is not a prospectus but should be read in
conjunction with the Fund's current Prospectus dated March
31, 1996. To obtain the Prospectus please call the Fund toll-
free 1-800-4-BABSON (1-800-422-2766), or in the Kansas City
area 471-5200.

TABLE OF CONTENTS
Page
Investment Objective and Policies 2
Portfolio Transactions 2
Investment Restrictions 3
Performance Measures 3
How the Fund's Shares are Distributed 4
How Share Purchases are Handled 4
Redemption of Shares 5
Signature Guarantees 5
Management and Investment Counsel 5
How Share Price is Determined 5
Trustees and Officers 6
Custodian 7
Independent Auditors 7
Other Jones & Babson Funds 8
Fixed Income Securities Described and Ratings 9
Financial Statements 11

INVESTMENT OBJECTIVE AND POLICIES

The following policies supplement the Fund's
investment objective and policies set forth in the
Prospectus. The D. L. Babson Bond Trust is a mutual
fund organized as a common law trust and may also be
referred to throughout the Prospectus and this
"Statement of Additional Information" as the Trust or
the Fund.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Fund are
made by Jones & Babson, Inc. pursuant to
recommendations by David L. Babson & Co. Inc.
Trustees of the Fund and officers of Jones & Babson,
Inc. are generally responsible for implementing or
supervising these decisions, including allocation of
portfolio brokerage and principal business and the
negotiation of commissions and/or the price of the
securities. In instances where securities are purchased
on a commission basis the Fund will seek competitive
and reasonable commission rates based on the
circumstances of the trade involved and to the extent
that they do not detract from the quality of the
execution.

The Fund, in purchasing and selling portfolio
securities, will seek the best available combination of
execution and overall price (which shall include the
cost of the transaction) consistent with the
circumstances which exist at the time. The Fund does
not intend to solicit competitive bids on each
transaction. The Fund expects that purchases and sales
of portfolio securities usually will be principal
transactions from a principal market maker for the
securities, unless it appears that a better combination of
price and execution may be obtained elsewhere.
Usually there will be no brokerage commission paid by
the Fund for such purchases. Purchases from
underwriters of portfolio securities will include a
commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as
market makers will include the spread between the bid
and asked price.

The Fund believes it is in its best interest and that of
its shareholders to have a stable and continuous
relationship with a diverse group of financially strong
and technically qualified broker-dealers who will
provide quality executions at competitive rates.
Broker-dealers meeting these qualifications also will be
selected for their demonstrated loyalty to the Fund,
when acting on its behalf, as well as for any research or
other services provided to the Fund. When buying
securities in over-the-counter markets, the Fund will
select a broker who maintains a primary market for the
security unless it appears that a better combination of
price and execution may be obtained elsewhere. The
Fund normally will not pay a higher commission rate
to broker-dealers providing benefits or services to it
than it would pay to broker-dealers who do not provide
it such benefits or services. However, the Fund
reserves the right to do so within the principles set out
in Section 28(e) of the Securities Exchange Act of
1934 when it appears that this would be in the best
interests of the shareholders.

No commitment is made to any broker or dealer with
regard to placing of orders for the purchase or sale of
Fund portfolio securities, and no specific formula is
used in placing such business. Allocation is reviewed
regularly by both the Board of Trustees of the Trust
and Jones & Babson, Inc.

Since the Fund does not market its shares through
intermediary brokers or dealers, it is not the Fund's
practice to allocate brokerage or principal business on
the basis of sales of its shares which may be made
through such firms. However, it may place portfolio
orders with qualified broker-dealers who recommend
the Fund to other clients, or who act as agents in the
purchase of the Fund's shares for their clients.

Research services furnished by broker-dealers may
be useful to the Fund manager and its investment
counsel in serving other clients, as well as the Fund.
Conversely, the Fund may benefit from research
services obtained by the manager or its investment
counsel from the placement of portfolio brokerage of
other clients.

When it appears to be in the best interests of its
shareholders, the Fund may join with other clients of
the manager and its investment counsel in acquiring or
disposing of a portfolio holding. Securities acquired or
proceeds obtained will be equitably distributed between
the Fund and other clients participating in the
transaction. In some instances, this investment

procedure may affect the price paid or received by the
Fund or the size of the position obtained by the Fund.

INVESTMENT RESTRICTIONS

In addition to the investment objective and portfolio
management policies set forth in the Prospectus under
the caption "Investment Objective and Portfolio
Management Policy," the following restrictions also
may not be changed without approval of the "holders of
a majority of the outstanding shares" of the Fund or the
affected Portfolio series.

The Fund will not: (1) purchase any investment
security for credit or on margin, except such short-term
credits as are necessary for the clearance of
transactions; (2) participate on a joint or a joint-and-
several basis in any trading account in securities; (3)
sell any securities short; (4) borrow money, securities
or other property in any event or for any purpose
whatsoever, or issue any security senior to the shares
authorized by the Trust Indenture; (5) lend money,
securities or other assets of the Trust for any purpose
whatsoever, provided however, that the acquisition of
any publicly distributed securities shall not be held or
construed to be the making of a loan; (6) mortgage,
pledge, hypothecate or encumber in any manner
whatsoever any investment securities at any time
owned or held by the Trust; (7) underwrite or
participate in the underwriting of any securities; (8)
purchase shares of other investment companies except
in the open market at ordinary broker's commission or
pursuant to a plan of merger or consolidation; (9)
acquire any security issued by any issuer in which an
officer, director or stockholder of such issuer is a
Trustee of the Trust or an officer or director of a
principal underwriter (as defined in the Investment
Company Act of 1940) if after the purchase of such
security one or more of the Trustees owns beneficially
more than one-half (1/2) of one per centum (1%) of
the capital stock of such issuer and such Trustees
together own beneficially more than five per centum
(5%) of the capital stock of such issuer; (10) acquire
any security of another issuer if immediately after and
as a result of such acquisition the market value of such
securities of such other issuer shall exceed five per
centum (5%) of the market value of the total
assets of the Trust or the Trust shall own more
than ten per centum (10%) of the outstanding voting
securities of such issuer. This restriction does not apply
to securities issued by the United States or any state,
county, or municipality thereof; (11) invest more than
25% of the value of its assets in any one industry; (12)
engage in the purchase or sale of real estate or
commodities; (13) invest in companies for the purpose
of exercising control of management; (14) purchase
any securities which are subject to legal or contractual
restrictions, i.e., restricted securities which may not be
distributed publicly without registration under the
Securities Act of 1933.

In addition to the fundamental investment
restrictions set out above, in order to comply with the
law or regulations of various States, the Fund will not
engage in the following practices: (1) invest in
securities which are not readily marketable or in
securities of foreign issuers which are not listed on a
recognized domestic or foreign securities exchange; (2)
write put or call options; (3) invest in oil, gas and other
mineral leases or arbitrage transactions; (4) purchase
or sell real estate (including limited partnership
interests, but excluding readily marketable interests in
real estate investment trusts or readily marketable
securities of companies which invest in real estate); or
(5) purchase securities of issuers which the company is
restricted from selling to the public without registration
under the Securities Act of 1933, including Rule
144(a) securities.

Certain states also require that the Fund's
investments in warrants, valued at the lower of cost or
market, may not exceed 5% of the value of the Fund's
net assets. Included within that amount, but not to
exceed 2% of the value of the Fund's net assets, may be
warrants which are not listed on the New York or
American Stock Exchange. Warrants acquired by the
Fund in units or attached to securities may be deemed
to be without value for purposes of this limitation.

PERFORMANCE MEASURES

Total Return

The Fund's "average annual total return" figures
described and shown below are computed according to
a formula prescribed by the Securities and Exchange
Commission. The formula can be expressed as follows:
P(1+T)n = ERV

Where: P = a hypothetical initial payment of
$1000

T = average annual total return

n = number of years

ERV = Ending Redeemable Value of a
hypothetical $1000 payment made
at the beginning of the 1, 5, or 10
year (or other) periods at the end of
the 1,5, or 10 year (or other)
periods (or fractional portions
thereof);

The table below shows the average total return for
the Fund for the specified periods.

Portfolio L Portfolio S

For the one year
12/1/94-11/30/95 15.28% 13.10%

For the five years
12/1/90-11/30/95 9.17% 8.18%

For the ten years
12/1/85-11/30/95 9.05% N/A

From
commencement
of operation
to 11/30/95* 7.73% 8.07%
____________________________________________

* Portfolio L commenced operation November 2, 1944.
*Portfolio S commenced operation April 19, 1988.

HOW THE FUND'S SHARES ARE
DISTRIBUTED

Jones & Babson, Inc., as agent of the Trust, agrees to
supply its best efforts as sole distributor of the Trust's
shares and, at its own expense, pay all sales and
distribution expenses in connection with their offering
other than registration fees and other government
charges.

Jones & Babson, Inc. does not receive any fee or
other compensation under the distribution agreement
which continues in effect until October 31, 1996, and
which will continue automatically for successive
annual periods ending each October 31, if continued at
least annually by the Trustees, including a majority of
those Trustees who are not parties to such Agreements
or interested persons of any such party. It terminates
automatically if assigned by either party or upon 60
days written notice by either party to the other.

Jones & Babson, Inc. also acts as sole distributor of
the shares for David L. Babson Growth Fund, Inc.,
D.L. Babson Money Market Fund, Inc., D. L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., Babson Value
Fund, Inc., Shadow Stock Fund, Inc., Babson-Stewart
Ivory International Fund, Inc., Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund, Inc.,
Scout Balanced Fund, Inc., Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High Yield
Fund, Inc. and Buffalo USA Global Fund, Inc.

HOW SHARE PURCHASES ARE HANDLED

Each order accepted will be fully invested in whole
and fractional shares, unless the purchase of a certain
number of whole shares is specified, at the net asset
value per share next effective after the order is
accepted by the Fund.

Each investment is confirmed by a year-to-date
statement which provides the details of the immediate
transaction, plus all prior transactions in your account
during the current year. This includes the dollar
amount invested, the number of shares purchased or
redeemed, the price per share, and the aggregate shares
owned. A transcript of all activity in your account
during the previous year will be furnished each
January. By retaining each annual summary and the
last year-to-date statement, you have a complete
detailed history of your account which provides
necessary tax information. A duplicate copy of a past
annual statement is available from Jones & Babson,
Inc. at its cost, subject to a minimum charge of $5 per
account, per year requested.

Normally, the shares which you purchase are held by
the Fund in open account, thereby relieving you of the
responsibility of providing for the safekeeping of a
negotiable share certificate. Should you have a special
need for a certificate, one will be issued on request for
all or a portion of the whole shares in your account.
There is no charge for the first certificate issued. A
charge of $3.50 will be made for any replacement
certificates issued. In order to protect the interests of
the other shareholders, share certificates will be sent to
those shareholders who request them only after the
Fund has determined that unconditional payment for
the shares represented by the certificate has been
received by its custodian, UMB Bank, n.a.

If an order to purchase shares must be canceled due
to non-payment, the purchaser will be responsible for
any loss incurred by the Fund arising out of such

cancellation. To recover any such loss, the Fund
reserves the right to redeem shares owned by any
purchaser whose order is canceled, and such purchaser
may be prohibited or restricted in the manner of
placing further orders.

The Fund reserves the right in its sole discretion to
withdraw all or any part of the offering made by the
prospectus or to reject purchase orders when, in the
judgment of management, such withdrawal or rejection
is in the best interest of the Fund and its shareholders.
The Fund also reserves the right at any time to waive
or increase the minimum requirements applicable to
initial or subsequent investments with respect to any
person or class of persons, which include shareholders
of the Fund's special investment programs.

REDEMPTION OF SHARES

The right of redemption may be suspended, or the
date of payment postponed beyond the normal three-
day period by the Fund's Board of Trustees under the
following conditions authorized by the Investment
Company Act of 1940: (1) for any period (a) during
which the New York Stock Exchange is closed, other
than customary weekend and holiday closing, or (b)
during which trading on the New York Stock
Exchange is restricted; (2) for any period during which
an emergency exists as a result of which (a)
disposal by the Fund of securities owned by it is not
reasonably practicable, or (b) it is not reasonably
practicable for the Fund to determine the fair value of
its net assets; or (3) for such other periods as the
Securities and Exchange Commission may by order
permit for the protection of the Fund's shareholders.

SIGNATURE GUARANTEES

Signature guarantees normally reduce the possibility
of forgery and are required in connection with each
redemption method to protect shareholders from loss.
Signature guarantees are required in connection with
all redemptions by mail or changes in share
registration, except as provided in the Prospectus.

Signature guarantees must appear together with the
signature(s) of the registered owner(s), on:

(1) a written request for redemption,

(2) a separate instrument of assignment, which
should specify the total number of shares to be
redeemed (this "stock power" may be obtained
from the Fund or from most banks or
stockbrokers), or

(3) all stock certificates tendered for redemption.

MANAGEMENT AND INVESTMENT COUNSEL

As a part of the Management Agreement, Jones &
Babson, Inc. employs at its own expense David L.
Babson & Co. Inc., as its investment counsel. David L.
Babson & Co. Inc. was founded in 1940, as a private
investment research and counseling organization. On
June 30, 1995, David L. Babson & Co. Inc. became a
wholly-owned subsidiary of Massachusetts Mutual Life
Insurance Company. David L. Babson & Co. Inc.
serves individual, corporate and other institutional
clients and participates with Jones & Babson, Inc. in
the management of nine Babson no-load mutual funds.

The aggregate management fees paid to Jones &
Babson, Inc. during the most recent fiscal year ended
November 30, 1995 and from which Jones & Babson,
Inc. paid all the Fund's expenses except those payable
directly by the Fund, were $1,425,821 for Portfolio L
and $289,394 for Portfolio S. The annual fee charged
by Jones & Babson, Inc. covers all normal operating
costs of the Fund.

David L. Babson & Co. Inc. has an experienced
investment analysis and research staff which
eliminates the need for Jones & Babson, Inc. and the
Fund to maintain an extensive duplicate staff, with the
consequent increase in the cost of investment advisory
service. The cost of the services of David L. Babson &
Co. Inc. is included in the services of Jones & Babson,
Inc. During the most recent fiscal year ended
November 30, 1995, Jones & Babson, Inc. paid David
L. Babson & Co. Inc. fees amounting to $374,764 for
Portfolio L and $45,501 for Portfolio S.

HOW SHARE PRICE IS DETERMINED

The net asset value per share of each Fund Portfolio
is computed once daily, Monday through Friday, at the
specific time during the day that the Board of Trustees
of the Fund sets at least annually, except on days on
which changes in the value of a Fund's portfolio
securities will not materially affect the net asset value,
or days during which no security is tendered for
redemption and no order to purchase or sell such
security is received by the Fund, or the following
holidays:

New Year's Day January 1
Presidents' Holiday Third Monday
in February
Good Friday Friday beforeEaster
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Thanksgiving Day FourthThursday
in November
Christmas Day December 25

TRUSTEES AND OFFICERS

The Fund is managed by Jones & Babson, Inc. subject
to the supervision and control of the Trustees.
Following is a list of the Officers and Trustees of the
Fund. Unless noted otherwise, the address of each
Officer and Trustee is 2440 Pershing Road, Suite G-15,
Kansas City, Missouri 64108. Except as indicated,
each has been an employee of Jones & Babson, Inc. for
more than five years.

* Larry D. Armel, President and Trustee.
President and Director, Jones & Babson, Inc., David
L. Babson Growth Fund, Inc. , D. L. Babson Money
Market Fund, Inc., D. L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund, Inc.,
Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc.; Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc.,Scout WorldWide Fund, Inc.;
Scout Balanced Fund, Inc., Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund, Inc.

Francis C. Rood, Trustee.
Retired, 6429 West 92nd Street, Overland Park,
Kansas 66212. Formerly, Group Vice President-
Administration, Hallmark Cards, Inc.; Director,
David L. Babson Growth Fund, Inc., D. L. Babson
Money Market Fund, Inc., D. L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson Value Fund,
Inc., Shadow Stock Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund, Inc.

William H. Russell, Trustee.
Financial consultant, 645 West 67th Street, Kansas
City, Missouri 64113; Director, David L. Babson
Growth Fund, Inc., D. L. Babson Money Market
Fund, Inc., D. L. Babson Tax-Free Income Fund,
Inc., Babson Enterprise Fund, Inc. , Babson
Enterprise Fund II, Inc., Babson Value Fund Inc.,
Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc.; Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund, Inc.

H. David Rybolt, Trustee.
Consultant, HDR Associates, P.O. Box 2468,
Shawnee Mission, Kansas 66202; Director, David L.
Babson Growth Fund, Inc., D.L. Babson Money
Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund, Inc.,
Shadow Stock Fund, Inc.; Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund, Inc.

P. Bradley Adams, Vice President and Treasurer.
Vice President and Treasurer, Jones & Babson, Inc.,
David L. Babson Growth Fund, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson Value Fund,
Inc., Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc.; Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc., Scout WorldWide Fund,
Inc., Scout Balanced Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund, Inc.

____________________________________________

* Trustees who are interested persons as that term
is defined in the Investment Company Act of 1940,
as amended.

Michael A. Brummel, Vice President, Assistant
Secretary and Assistant Treasurer.
Vice President, Jones & Babson, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson Value Fund,
Inc., Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc.; Vice President, Assistant
Secretary and Assistant Treasurer, Scout Stock Fund,
Inc., Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc.,Scout WorldWide Fund,
Inc., Scout Balanced Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund, Inc.

Martin A. Cramer, Vice President and Secretary.
Vice President and Secretary, Jones & Babson, Inc.,
D.L. Babson Money Market Fund, Inc., D.L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise Fund,
Inc., Babson Enterprise Fund II, Inc., Babson Value
Fund, Inc., Shadow Stock Fund, Inc., Babson-Stewart
Ivory International Fund, Inc.; Scout Stock Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund, Inc.,
Scout Balanced Fund, Inc.; Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund, Inc.

Edward L. Martin, Vice President-Portfolio.
Senior Vice President, David L. Babson & Co. Inc.,
One Memorial Drive, Cambridge, Massachussetts
02142.; Vice President, D. L. Babson Money Market
Fund, Inc., D. L. Babson Tax-Free Income Fund, Inc.

None of the Trustees or agents of the Fund will be
remunerated by the Fund for their normal duties and
services. Their compensation and expenses arising out
of normal operations will be paid by Jones & Babson,
Inc. under the provisions of the Management
Agreement.

Messrs. Rood, Russell and Rybolt have no financial
interest in, nor are they affiliated with, either Jones &
Babson, Inc. or David L. Babson & Co. Inc.

The Audit Committee of the Board of Trustees is
composed of Messrs. Rood, Russell and Rybolt.

The Trustees of the Trust as a group own less than
1% of the Fund.

The Fund will not hold annual meetings except as
required by the Investment Company Act of 1940 and
other applicable laws. The Fund is a common law trust
organized under the laws of Missouri. Under the terms
of the Declaration of Trust, a special meeting of
shareholders of the Fund must be held if the Fund
receives the written request for a meeting from the
shareholders entitled to cast at least 25% of all the
votes entitled to be cast at the meeting. The Fund has
undertaken that its Trustees will call a meeting of
shareholders if such a meeting is requested in writing
by the holders of not less than 10% of the outstanding
shares of the Fund. To the extent required by the
undertaking, the Fund will assist shareholder
communications in such matters.

CUSTODIAN

The Fund's assets are held for safekeeping by an
independent custodian, UMB Bank, n.a. This means
the bank, rather than the Fund, has possession of the
Fund's cash and securities. The custodian bank is not
responsible for the Fund's investment management or
administration. But, as directed by the Fund's
Trustees, it delivers cash to those who have sold
securities to the Fund in return for such securities, and
to those who have purchased portfolio securities from
the Fund, it delivers such securities in return for their
cash purchase price. It also collects income directly
from issuers of securities owned by the Fund and holds
this for payment to shareholders after deduction of the
Fund's expenses. The custodian is compensated for its
services by the manager. There is no charge to the
Fund.

INDEPENDENT AUDITORS

The Fund's financial statements are audited annually
by independent auditors approved by the trustees each
year, and in years in which an annual meeting is held
the trustees may submit their selection of independent
auditors to the shareholders for ratification. Ernst &
Young LLP, One Kansas City Place, 1200 Main Street,
Suite 2000, Kansas City, Missouri 64105, is the Fund's
present independent auditors.

Reports to shareholders will be published at least
semiannually.

OTHER JONES & BABSON FUNDS

The Fund is one of nine no-load funds comprising
the Babson Mutual Fund Group managed by Jones &
Babson, Inc. in association with its investment counsel,
David L. Babson & Co. Inc. The other funds are:

EQUITY FUNDS

DAVID L. BABSON GROWTH FUND, INC. was
organized in 1960 with the objective of long-term
growth of both capital and dividend income through
investment in the common stocks of well-managed
companies which have a record of long term above-
average growth of both earnings and dividends.

BABSON ENTERPRISE FUND, INC. was
organized in 1983 with the objective of long-term
growth of capital by investing in a diversified
portfolio of common stocks of smaller, faster-growing
companies with market capital of $15 million to $300
million at the time of purchase. This Fund is
intended to be an investment vehicle for that part of
an investor's capital which can appropriately be
exposed to above-average risk in anticipation of
greater rewards. This Fund is currently closed to new
shareholders.

BABSON ENTERPRISE FUND II, INC. was
organized in 1991 with the objective of long-term
growth of capital by investing in a diversified
portfolio of common stocks of smaller, faster-growing
companies which at the time of purchase are
considered by the Investment Adviser to be
realistically valued in the smaller company sector of
the market. This Fund is intended to be an
investment vehicle for that part of an investor's capital
which can appropriately be exposed to above-average
risk in anticipation of greater rewards.

BABSON VALUE FUND, INC. was organized in
1984 with the objective of long-term growth of capital
and income by investing in a diversified portfolio of
common stocks which are considered to be
undervalued in relation to earnings, dividends and/or
assets.

SHADOW STOCK FUND, INC. was organized in
1987 with the objective of long-term growth of capital
that can be exposed to above-average risk in
anticipation of greater-than-average rewards. The
Fund expects to reach its objective by investing in
small company stocks called "Shadow Stocks," i.e.,
stocks that combine the characteristics of "small
stocks" (as ranked by market capitalization) and
"neglected stocks" (least held by institutions and least
covered by analysts).

BABSON-STEWART IVORY INTERNATIONAL
FUND, INC. was organized in 1987 with the
objective of seeking a favorable total return (from
market appreciation and income) by investing
primarily in a diversified portfolio of equity securities
(common stocks and securities convertible into
common stocks) of established companies whose
primary business is carried on outside the United
States.

FIXED INCOME FUNDS

D. L. BABSON MONEY MARKET FUND, INC.
was organized in 1979 to provide investors the
opportunity to manage their money over the short
term by investing in high-quality short-term debt
instruments for the purpose of maximizing income to
the extent consistent with safety of principal and
maintenance of liquidity. It offers two portfolios -
Prime and Federal. Money market funds are neither
insured nor guaranteed by the U.S. Government and
there is no assurance that the funds will maintain a
stable net asset value.

D. L. BABSON TAX-FREE INCOME FUND,
INC. was organized in 1979 to provide shareholders
the highest level of regular income exempt from
federal income taxes consistent with investing in
quality municipal securities. It offers three separate
high quality portfolios (including a money market
portfolio) which vary as to average length of maturity.
Income from the Tax-Free Money Market portfolio
may be subject to state and local taxes as well as the
Alternative Minimum Tax.

A prospectus for any of the Funds may be obtained
from Jones & Babson, Inc., 2440 Pershing Road,
Suite G-15, Kansas City, Missouri 64108.

Jones & Babson, Inc. also sponsors seven mutual
funds which especially seek to provide services to
customers of affiliate banks of UMB Financial
Corporation. They are Scout Stock Fund, Inc., Scout
Bond Fund, Inc., Scout Money Market Fund, Inc.,
Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund, Inc. and
Scout Balanced Fund, Inc.

Jones & Babson, Inc. also sponsors and manages the
Buffalo group of Mutual Funds. They are: Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc. and Buffalo USA Global
Fund, Inc.

FIXED INCOME SECURITIES
DESCRIBED AND RATINGS

Description of Bond Ratings:

Standard & Poor's Corporation (S&P).

AAA - Highest Grade. These securities possess the
ultimate degree of protection as to principal
and interest. Marketwise, they move with
interest rates, and hence provide the
maximum safety on all counts.

AA - High Grade. Generally, these bonds differ
from AAA issues only in a small degree.
Here too, prices move with the long-term
money market.

A - Upper-medium Grade. They have
considerable investment strength, but are not
entirely free from adverse effects of changes
in economic and trade conditions. Interest
and principal are regarded as safe. They
predominately reflect money rates in their
market behavior but, to some extent, also
economic conditions.

BBB - Bonds rated BBB are regarded as having an
adequate capacity to pay principal and
interest. Whereas they normally exhibit
protection parameters, adverse economic
conditions or changing circumstances are
more likely to lead to a weakened capacity
to pay principal and interest for bonds in
this category than for bonds in the A
category.

BB, B, CCC, CC - Bonds rated BB, B, CCC and CC
are regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and
repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of
speculation and CC the highest degree of speculation.
While such bonds will likely have some quality and
protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse
conditions.

Moody's Investors Service, Inc. (Moody's).

Aaa - Best Quality. These securities carry the
smallest degree of investment risk and are
generally referred to as "gilt-edge." Interest
payments are protected by a large, or by an
exceptionally stable margin, and principal is
secure. While the various protective elements
are likely to change, such changes as can be
visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - High Quality by All Standards. They are
rated lower than the best bonds because
margins of protection may not be as large as
in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there
may be other elements present which make
the long-term risks appear somewhat greater.

A - Upper-medium Grade. Factors giving
security to principal and interest are
considered adequate, but elements may be
present which suggest a susceptibility to
impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as
medium grade obligations, i.e., they are
neither highly protected nor poorly secured.
Interest payments and principal security
appear adequate for the present, but certain
protective elements may be lacking or may be
characteristically unreliable over any great
length of time. Such bonds lack outstanding
investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have
predominantly speculative elements; their
future cannot be considered as well assured.
Often the protection of interest and principal
payments may be very moderate and thereby
not well safeguarded during both good and
bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds which are rated B generally lack
characteristics of the desirable investment.
Assurance of interest and principal payments

or maintenance of other terms of the contract
over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor
standing. Such issues may be in default or
there may be present elements of danger with
respect to principal or interest.

Ca - Bonds which are rated Ca represent
obligations which are speculative in a high
degree. Such issues are often in default or
have other marked shortcomings.

Description of Commercial Paper Ratings:

Moody's . . . Moody's commercial paper rating is an
opinion of the ability of an issuer to repay punctually
promissory obligations not having an original maturity
in excess of nine months. Moody's has one rating -
prime. Every such prime rating means Moody's
believes that the commercial paper note will be
redeemed as agreed. Within this single rating category
are the following classifications:

Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality

The criteria used by Moody's for rating a commercial
paper issuer under this graded system include, but are
not limited to the following factors:

(1) evaluation of the management of the issuer;

(2) economic evaluation of the issuer's industry or
industries and an appraisal of speculative type
risks which may be inherent in certain areas;

(3) evaluation of the issuer's products in relation
to competition and customer acceptance;

(4) liquidity;

(5) amount and quality of long-term debt;

(6) trend of earnings over a period of ten years;

(7) financial strength of a parent company and
relationships which exist with the issuer; and

(8) recognition by the management of obligations
which may be present or may arise as a result
of public interest questions and preparations
to meet such obligations.

S&P . . . Standard & Poor's commercial paper rating is
a current assessment of the likelihood of timely
repayment of debt having an original maturity of no
more than 270 days. Ratings are graded into four
categories, ranging from "A" for the highest quality
obligations to "D" for the lowest. The four categories
are as follows:

"A" Issues assigned this highest rating are
regarded as having the greatest capacity for
timely payment. Issues in this category are
further refined with the designations 1, 2,
and 3 to indicate the relative degree of
safety.

"A-1" This designation indicates that the degree of
safety regarding timely payment is very
strong.

"A-2" Capacity for timely payment on issues with
this designation is strong. However, the
relative degree of safety is not as
overwhelming.

"A-3" Issues carrying this designation have a
satisfactory capacity for timely payment.
They are, however, somewhat more
vulnerable to the adverse effects of changes
in circumstances than obligations carrying
the higher designations.

"B" Issues rated "B" are regarded as having only
an adequate capacity for timely payment.
Furthermore, such capacity may be
damaged by changing conditions or short-
term adversities.

"C" This rating is assigned to short-term debt
obligations with a doubtful capacity for
payment.

"D" This rating indicates that the issuer is either
in default or is expected to be in default
upon maturity.

The Fund may invest a portion of its assets in lower
rated fixed-income securities and unrated securities of
comparable quality. The market values of such
securities tend to reflect individual corporate
developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the
general level of interest rates. Such lower rated
securities also tend to be more sensitive to economic
conditions than higher rated securities. These lower
rated fixed-income securities are considered by S&P
and Moody's, on balance, to be predominantly
speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the
obligation and will generally involve more credit risk
than securities in the higher rating categories. Even
securities rated BBB by S&P or Baa by Moody's, which
are considered investment grade, possess some
speculative characteristics.

The risk of loss due to default by the issuer may be
significantly greater for the holders of high yielding
securities, because such securities are generally
unsecured and are often subordinated to other creditors
of the issuer. In addition, since the high yield bond
market is relatively new, its growth has paralleled a
long economic expansion, and it has not weathered a
recession in its present size and form. An economic
downturn could disrupt the market for high yield bonds
and adversely affect the value of outstanding bonds and
the ability of issuers of such bonds to repay principal
and interest.

The Fund may have difficulty disposing of certain high
yielding securities because there may be a thin trading
market for a particular security at any given time. To
the extent a secondary trading market for high
yielding, fixed-income securities does exist, it is
generally not as liquid as the secondary market for
higher rated securities. Reduced liquidity in the
secondary market may have an adverse impact on
market price and the Fund's ability to dispose of
particular issues, when necessary, to meet the Fund's
liquidity needs or in response to a specific economic
event, such as the deterioration in the creditworthiness
of the issuer. Reduced liquidity in the secondary
market for certain securities may also make it more
difficult for the Fund to obtain market quotations based
on actual trades for purposes of valuing the Fund's
portfolio.

FINANCIAL STATEMENTS

The audited financial statements of the Fund which
are contained in the November 30, 1995, Annual
Report to Shareholders are incorporated herein by
reference.