BABSON D L BOND TRUST, 485BPOS, 1997-03-25

BABSON D L BOND TRUST
485BPOS, 1997-03-25

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. _____ [ ]

Post-Effective Amendment No. 97 File No. 2-10002 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 97 File No. 811-495 [X]

D. L. BABSON BOND TRUST
(Exact Name of Registrant as Specified in Charter)

2440 Pershing Road _G-15 Kansas_City, Missouri 64108
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code (816) 471-5200

Larry D. Armel, Trustee, D. L. BABSON BOND TRUST
2440 Pershing Road, G-15, Kansas City, Missouri 64108
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: March 31, 1997

It is proposed that this filing become effective:

X On March 31, 1997 pursuant to paragraph (b) of Rule 485

Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the
Investment Company Act of 1940, and will file its required Rule 24f-2
Notice for the Registrant's fiscal year ended November 30, 1997, by
January 30, 1998.

Please address inquiries and a carbon copy of all
and communications to: communications to:
John G. Dyer, Esq. Mark H. Plafker, Esq.
D.L. Babson Bond Trust Stradley, Ronon, Stevens & Young
2440 Pershing Road, G-15 2600 One Commerce Square
Kansas City, MO 64108 Philadelphia, PA 19103-7098
Telephone: (816) 471-5200 Telephone: (215) 564-8024

<PAGE>

D.L.BABSON BOND TRUST

CROSS REFERENCE SHEET

Form N-1A Item Number Location in Prospectus

Item 1. Cover Page . . . . . . . . . . . . . Cover Page

Item 2. Synopsis . . . . . . . . . . . . . . Not Applicable

Item 3. Condensed Financial Information . . Per Share Capital and
Income Changes

Item 4. General Description of Registrant. . Investment Objective
and Portfolio
Management Policy

Item 5. Management of the Fund . . . . . . . Trustees;
Management and
Investment Counsel

Item 6. Capital Stock and Other Securities . How to Purchase Shares;
How to Redeem Shares;
How Share Price is
Determined; General
Information and
History; Dividends,
Distributions and
their Taxation

Item 7. Purchase of Securities . . . . . . . Cover Page; How to
being Offered Purchase Shares;
Shareholder Services

Item 8. Redemption or Repurcdhase . . . . . How to Redeem Shares

Item 9. Pending Legal Proceedings . . . . . Not Applicable

<PAGE>
D.L. BABSON BOND TRUST
CROSS REFERENCE SHEET (Continued)

Location in Statement
of Additional
Form N-1A Item Number Information

Item 10. Cover Page . . . . . . . . . . . . . Cover Page

Item 11. Table of Contents . . . . . . . . . Cover Page

Item 12. General Information and History . . Investment Objectives
and Policies;Management

and Investment Counsel

Item 13. Investment Objectives and Policies . Investment Objectives
and Policies;
Investment Restrictions

Item 14. Management of the Fund . . . . . . . Management and
Investment Counsel;
Trustees

Item 15. Control Persons and Principal . . . Management and Invest-
Holders of Securities ment Counsel; Trustees

Item 16. Investment Advisory and other . . . Management of the Fund
Services

Item 17. Brokerage Allocation . . . . . . . . Portfolio Transactions

Item 18. Capital Stock and Other Securities . General Information
and History
(Prospectus);
Financial Statements

Item 19. Purchase, Redemption and Pricing . . How Share Purchases
of Securities Being Offered are Handled; Redemption
of Shares
Financial Statements

Item 20. Tax Status . . . . . . . . . . . . . Dividends,Distributions

and their Taxation
(Prospectus)

Item 21. Underwriters . . . . . . . . . . . . How the Fund's Shares
are Distributed

Item 22. Calculation of Yield Quotations . . Performance Measures
of Money Market Fund

Item 23. Financial Statements . . . . . . . . Financial Statements

<PAGE>

BABSON
BOND TRUST

Prospectus
March 31, 1997

A no-load mutual fund
with primary emphasis
on current regular income.

JONES & BABSON
MUTUAL FUNDS

PROSPECTUS
March 31, 1997

D. L. BABSON
BOND TRUST

Managed and Distributed By:
JONES & BABSON, INC.
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

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

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 REPRE-SENTATION 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 9
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 Funds 16
How Share Price is Determined 17
Trustees and Officers 17
Management and Investment Counsel 17
General Information and History 19
Dividends, Distributions and Their Taxation 20
Shareholder Services 21
Shareholder Inquiries 23

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 $53 $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, 1996. 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 .01%
Total Fund operating expenses .66%

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, 1998.

FINANCIAL HIGHLIGHTS

The following financial highlights for each of the ten years in the period
ended November 30, 1996, 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, 1996, should be read in conjunction with the
financial statements of the Fund and the report of Ernst & Young LLP,
independent auditors, appearing in the November 30, 1996, 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, 1991,
is not covered by the report of Ernst & Young LLP.

<TABLE>
<CAPTION>
PORTFOLIO L 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.58 $ 1.47 $ 1.67 $ 1.62 $ 1.60 $ 1.53 $ 1.57 $ 1.52 $ 1.58 $ 1.68

Income from investment operations:
Net investment income .107 .108 .108 .116 .124 .130 .134 .140 .154 .150
Net gains or losses on
securities (both realized
and unrealized) (.030) .110 (.149) .061 .020 .071 (.039) .051 (.018) (.140)
Total from investment operations .077 .218 (.041) .177 .144 .201 .095 .191 .136 .010

Less distributions:
Dividends from net
investment income (.107) (.108) (.108) (.116) (.124) (.131) (.135) (.141) (.196) (.110)
Distributions from
capital gains - - (.051) (.011) - - - - - -
Total distributions (.107) (.108) (.159) (.127) (.124) (.131) (.135) (.141) (.196) (.110)

Net asset value, end of year $ 1.55 $ 1.58 $ 1.47 $ 1.67 $ 1.62 $ 1.60 $ 1.53 $ 1.57 $ 1.52 $ 1.58

Total return 5.17% 15.28% (2.71)% 11.25% 9.29% 13.70% 6.32% 13.13% 8.42% 1.25%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 142 $ 161 $ 140 $ 162 $ 142 $ 114 $ 90 $ 77 $ 66 $ 65
Ratio of expenses to average
net assets .97% .97% .97% .98% .99% .98% .97% .97% .97% .97%
Ratio of net investment income to
average net assets 6.96% 7.06% 6.95% 7.00% 7.67% 8.42% 8.81% 9.19% 9.99% 9.29%
Portfolio turnover rate 61% 50% 40% 80% 54% 75% 51% 51% 43% 54%
</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
PORTFOLIO S 1996 1995 1994 1993 1992 1991 1990 1989 1988*
</CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.90 $ 9.43 $10.48 $10.33 $10.30 $ 9.85 $10.01 $ 9.82 $10.00

Income from investment operations:
Net investment income .692 .726 .694 .718 .753 .808 .853 .810 .457
Net gains or losses on
securities (both realized
and unrealized) (.130) .470 (.899) .207 .054 .450 (.160) .190 (.18)
Total from investment operations .562 1.196 (.205) .925 .807 1.258 .693 1.00 .277

Less distributions:
Dividends from net
investment income (.692) (.726) (.694) (.718) (.753) (.808) (.853) (.810) (.457)
Distributions from
capital gains - - (.151) (.057) (.024) - - - -
Total distributions (.692) (.726) (.845) (.775) (.777) (.808) (.853) (.810) (.457)

Net asset value, end of year $ 9.77 $ 9.90 $ 9.43 $10.48 $10.33 $10.30 $ 9.85 $10.01 $ 9.82

Total return 5.96% 13.10% (2.06)% 9.19% 8.07% 13.35% 7.07% 10.67% 2.92%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 34 $ 33 $ 30 $ 36 $ 31 $ 14 $ 7 $ 5 $ 3
Ratio of expenses to average
net assets .66% .67% .67% .68% .67% .66% .78% .91% .70%
Ratio of net investment income to
average net assets 7.10% 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 .96% .97% .97% .98% .97% .96% 1.08% 1.21% -
Portfolio turnover rate 48% 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, 1996, November 30, 1995 and November
30, 1994, 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

1996 None 61%
1995 None 50%
1994 None 40%

Portfolio S
Portfolio
Fiscal Brokerage Turnover
Year Commissions Rate

1996 None 48%
1995 None 57%
1994 None 42%

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., 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
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, $1,000 or more if purchases are made by wire, or
$100 or more if purchases are made by telephone purchase (ACH). Automatic
monthly investments must be in amounts of $50 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 ($100 minimum)
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 ($50 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.") Shares can be redeemed by written request or if
previously authorized by telephone toll free 1-800-4-BABSON (1-800-422-2766),
or in the Kansas City area 471-5200.

All telephone requests to redeem shares, the proceeds of which are to be paid
by check, made within 30 days of our receipt of an address change (including
requests to redeem that accompany an address change) must be in writing. The
request must be signed by each person in whose name the shares are owned, and
all signatures must be guaranteed.

In each instance you must comply with the general requirements relating to all
redemptions as well as with specific requirements set out for the particular
redemption method you select. If you wish to expedite redemptions by using the
telephone/telegraph privilege, you should carefully note the special
requirements and limitations relating to these methods. 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.

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 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 of
$50,000 or more 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 $50,000 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
requirement, 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. Since the
minimum investment amount and the minimum account size are the same, any
redemption from an account containing only the minimum investment amount may
result in redemption of that account.

Withdrawal By Mail - Shares may be redeemed by mailing your request to the
Fund. To be in "good order" the request must include the following:

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.

(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.

Withdrawal By Telephone or Telegraph - You may withdraw any amount ($1,000
minimum if wired) or more by telephone toll free 1-800-4-BABSON (1-800-422-
2766), or in the Kansas City area 471-5200, or by telegram to the Fund's
address. Telephone/telegraph redemption authorization signed by all registered
owners with signatures guaranteed must be on file with the Fund before you may
redeem by telephone or telegraph. Funds will be sent only to the address of
record. The signature guarantee requirement may be waived by the Fund if the
request for this redemption method is made at the same time the initial
application to purchase shares is submitted.

All communications must include the Fund's name, your account number, the
exact registration of your shares, the number of shares or dollar amount to be
redeemed, and the identity of the bank and bank account (name and number) to
which the proceeds are to be wired. This procedure may only be used for non-
certificated shares held in open account. For the protection of shareholders,
your redemption instructions can only be changed by filing with the Fund new
instructions on a form obtainable from the Fund which must be properly signed
with signature(s) guaranteed.

Telephone or telegraph redemption proceeds may be transmitted to your pre-
identified bank account. Requests received prior to 4:00 P.M. (Eastern Time),
normally will be wired the following business day. Once the funds are
transmitted, the time of receipt and the funds' availability are not under our
control. If your request is received during the day thereafter, proceeds
normally will be wired on the second business day following the day of receipt
of your request. Wired funds are subject to a $10 fee to cover bank wire
charges, which is deducted from redemption proceeds, but this charge may be
reduced or waived in connection with certain accounts. The Fund reserves the
right to change this policy or to refuse a telephone or telegraph redemption
request or require additional documentation to assure a genuine redemption,
and, at its option, may pay such redemption by wire or check and may limit the
frequency or the amount of such request. The Fund reserves the right to
terminate or modify any or all of the services in connection with this
privilege at any time without prior notice. Neither the Fund nor Jones &
Babson, Inc. assumes responsibility for the authenticity of withdrawal
instructions, and there are provisions on the authorization form limiting
their liability in this respect.

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 FUNDS

Shareholders may exchange their Fund shares, which have been held in open
account for 15 days or more, and for which good payment has been received for
identically registered shares of any other Fund in the Babson or Buffalo 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 or Buffalo 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 or Buffalo 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 Trust manage its day-to-day operations. The Trust'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 Trust 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, 1998 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, 1998. The total expenses of Portfolio L for the fiscal year ended November
30, 1996 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, 1996
amounted to 66/100 of one percent (.66%) 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, 1998.

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,
1997, 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 preemptive 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, 1996. 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 ($50 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 $100 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 or Buffalo 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 ($4,000 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
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

EQUITIES
Growth Fund
Enterprise Fund*
Enterprise Fund II
Value Fund
Shadow Stock Fund
International Fund

FIXED INCOME
Bond Trust
Money Market Fund
Tax-Free Income Fund

* Closed to new investors.

JONES & BABSON
MUTUAL FUNDS

2440 Pershing Road
Kansas City, MO 64108-2561
816-471-5200

1-800-4-BABSON
(1-800-422-2766)

http://www.jbfunds.com

<PAGE>

PART B

D. L. BABSON BOND TRUST

STATEMENT OF ADDITIONAL INFORMATION

March 31, 1997

This Statement is not a prospectus but should be read in conjunction with the
Fund's current Prospectus dated March 31, 1997. 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

Investment Objective and Policies 2
Portfolio Transactions 2
Investment Restrictions 3
Performance Measures 4
How the Fund's Shares are Distributed 4
How Share Purchases are Handled 5
Redemption of Shares 5
Signature Guarantees 5
Management and Investment Counsel 6
How Share Price is Determined 6
Trustees and Officers 6
Custodian 9
Independent Auditors 9
Other Jones & Babson Funds 9
Fixed Income Securities Described and Ratings 10
Financial Statements 13

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; or
(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
12/1/95-11/30/96 5.17% 5.96%

For the five years
12/1/91-11/30/96 7.48% 6.73%

For the ten years
12/1/86-11/30/96 7.98% N/A

From
commencement
of operation
to 11/30/96* 7.59% 7.82%

_______________________________________

* 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, 1997, 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 of $50,000 or more 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, 1996 and from which
Jones & Babson, Inc. paid all the Fund's
expenses except those payable directly by the
Fund, were $1,408,223 for Portfolio L and
$205,831 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, 1996, Jones &
Babson, Inc. paid David L. Babson & Co. Inc.
fees amounting to $371,538 for Portfolio L and
$47,623 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 before Easter
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Thanksgiving Day Fourth Thursday
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,
nc., Scout Balanced Fund, Inc.; Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA
Global Fund, Inc.

Elizabeth L. Allwood, Vice President and
Assistant Secretary.
Assistant Vice President and Assistant
Secretary, Jones & Babson, Inc. Vice President
and Assistant Secretary, 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., 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., 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.;
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., 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.

Constance E. Martin, Vice President.
Assistant Vice President, Jones & Babson, Inc.
Vice President, 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., Babson-Stewart Ivory International Fund,
Inc., D.L. Babson Bond Trust, 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.

Remuneration of Officers and Trustees. None
of the officers or trustees 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.

<TABLE>
<CAPTION>
COMPENSATION TABLE

Pension or Estimated Total
Aggregate Retirement Annual Compensation
Name of Compensation Benefits Accrued Benefits From All Babson
Director From each As Part of Fund Upon Funds Paid to
Fund Expenses Retirement Directors**
______________ ____________ ________________ __________ _____________
</CAPTION>
<S> <C> <C> <C> <C>
Larry D. Armel* -- -- -- --
Francis C. Rood $7,250 -- -- $7,250
William H. Russell $7,250 -- -- $7,500
H. David Rybolt $7,250 -- -- $7,250
</TABLE>
______________ ____________ ________________ ___________ _____________

* As an "interested director," Mr. Armel received no compensation for
his services as a director.
** The amounts reported in this column reflect the total compensation
paid to each director for his services as a director of nine Babson
Funds during the fiscal year ended June 30, 1996. Directors fees are
paid by the Funds' manager and not by the Funds themselves.

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.

BUFFALO FUNDS

Jones & Babson also sponsors and manages the
Buffalo Group of Mutual Funds. They are:

BUFFALO BALANCED FUND, INC. was
organized in 1994, with the objective of long-term
capital growth and high current income through
investing in common stocks and secondarily by
investing in convertible bonds, preferred stocks and
convertible preferred stocks.

BUFFALO EQUITY FUND, INC. was organized
in 1994, with the objective of long-term capital
appreciation to be achieved primarily by investment
in common stocks. Realization of dividend income is
a secondary consideration.

BUFFALO HIGH YIELD FUND, INC. was
organized in 1994, with the objective of a high level
of current income and secondarily, capital growth by
investing primarily in high-yielding fixed income
securities.

BUFFALO USA GLOBAL FUND, INC. was
organized in 1994, with the objective of capital
growth by investing in common stocks of companies
based in the United States that receive greater than
40% of their revenues or pre-tax income from
international operations.

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.

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, 1996, Annual
Report to Shareholders are incorporated herein by
reference.

<PAGE>

PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements:

Herewith are all financial statements and exhibits
filed as a part of this registration statement:

Included in Part-A - Prospectus:

Per Share Capital and Income Changes

Included in Part B - Statement of Additional
Information:

The audited financial statements
contained in the most recent Annual
Report to Shareholders of D. L. Babson
Bond Trust are incorporated by reference
into Part B of this Registration
Statement.

Included in Part C - Other Information:

Consent of Independent Public
Accountants

(b) *(1) (a) Form of Registrant's Agreement and
Declaration of Trust

(b) Form of Registrant's Supplementary
Agreement and Declaration of Trust

*(2) Form of Registrant's By-laws

(3) Not applicable, because there is no voting
trust agreement

*(4) Specimen copy of each security to be issued
by the registrant

*(5) (a) Form of Management Agreement between
Jones & Babson, Inc. and the Registrant

(b) Form of Investment Counsel Agreement
between Jones & Babson, Inc. and David
L. Babson & Co. Inc.

*(6) Form of principal Underwriting Agreement
between Jones & Babson, Inc. and the
Registrant

(7) Not applicable, because there are no pension,
bonus or other agreements for the benefit of
directors and officers

*(8) Form of Custodian Agreement between
Registrant and United Missouri Bank of Kansas
City, N.A.

(9) There are no other material contracts not
made in the ordinary course of business
between the Registrant and others

(10) Opinion and consent of counsel as to the
legality of the registrant's securities being
registered. (To be supplied annually
pursuant to Rule 24f-2 of the Investment
Company Act of 1940.)

(11) The consent of Ernst & Young,
Independent Public Accountants.

(12) Not applicable.

*(13) Form of letter from contributors of initial
capital to the Registrant that purchase was
made for investment purposes without any
present intention of redeeming or selling.

*(14) Copies of the model plan used in the
establishment of any retirement plan in
conjunction with which Registrant offers its
securities.

(15) Not applicable.

*(16) Schedule for computation of performance
quotations.

*(17) Copies of Powers of Attorney pursuant to Rule
402(c)

* Previously filed on Form N-1 and herein
incorporated by reference

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.

NONE

Item 26. NUMBER OF HOLDERS OF SECURITIES.

The number of record holders of each class of
securities of the Registrant as of March 14, 1997, is
as follows:

(1) (2)
Title of class Number of Record Holders

Shares of Beneficial Interest 5,529
$0.25 par value Portfolio L -

Shares of Beneficial Interest 1,133
$1.00 par value Portfolio S -

Item 27. INDEMNIFICATION.

Under the terms of the Missouri general trust law and
the company's Agreement and Declaration of Trust, the
company shall indemnify any person who was or is a
trustee, agent or employee of the company to the
maximum extent permitted by the Missouri general law;
provided however, that any such indemnification (unless
ordered by a court) shall be made by the company only
as authorized in the specific case upon a determination
that indemnification of such persons is proper in the
circumstances. Such determination shall be made

(i) by the Trustees by a majority vote of a quorum
which consists of the Trustees who are neither
"interested persons" of the company as defined in
Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or

(ii) if the required quorum is not obtainable or if a
quorum of such Trustees so directs, by independent
legal counsel in a written opinion.

No indemnification will be provided by the company to
any Trustee or agent of the company for any liability
to the company or shareholders to which he would
otherwise be subject by reason of willful misfeasance,
bad faith, gross neglegience, or reckless disregard of
duty.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.

The principal business of Jones & Babson, Inc. is the
management of the Babson family of mutual funds. It
also has expertise in the tax and pension plan field.
It supervises a number of prototype and profit-sharing
plan programs sponsored by various organizations
eligible to be prototype plan sponsors.

The principal business of David L. Babson & Co., Inc.
is to provide investment counsel and advice to a wide
variety of clients. David L. Babson & Co. Inc. and its
affiliates have $4 billion under management, of which
$2.4 billion is securities and $1.6 billion is real
estate.

Item 29. PRINCIPAL UNDERWRITERS.

(a) Jones & Babson, Inc., the only principal
underwriter of the Registrant, also acts as
principal underwriter for the David L. Babson
Growth Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., D.L. Babson Money
Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International
Fund, Inc., UMB Stock Fund, Inc., UMB Bond Fund,
Inc., UMB Money Market Fund, Inc., UMB Tax-Free
Money Market Fund, Inc. and UMB Heartland Fund,
Inc.

(b) Herewith is the information required by the
following table with respect to each director,
officer or partner of the only underwriter named
in answer to Item 21 of Part B:

Name and Principal Position and Offices Positions and Offices
_Business Address_ __with Underwriter__ ___with Registrant___

Stephen S. Soden Chairman None
BMA Tower and Director
One Penn Valley Park
Kansas City, MO 64141

Larry D. Armel President and President and
Three Crown Center Director Trustee
2440 Pershing Road
Kansas City, MO 64108

Giorgio Balzer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Robert T. Rakich Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Edward S. Ritter Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141
4
Robert N. Sawyer Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

Vernon W. Voorhees Director None
BMA Tower
One Penn Valley Park
Kansas City, MO 64141

P. Bradley Adams Vice President Vice President
Three Crown Center and Treasurer and Treasurer
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

Michael A Brummel Vice President Vice President
Three Crown Center
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

Martin A. Cramer Vice President Vice President
Three Crown Center and Secretary and Secretary
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

Elizabeth L. Allwood Asst. Vice Vice President
Three Crown Center President & Asst. Secretary
2440 Pershing Road, G-15 Asst Secretary
Kanasas City, Missouri 64108

Constance E. Martin Asst. Vice Vice President
Three Crown Center President
2440 Pershing Road, G-15
Kanasas City, Missouri 64108

(c) The principal underwriter does not receive any
remuneration or compansation for the duties or
services rendered to the Registrant pursuant to
the principal underwriting Agreement.

Item 30. LOCATION OF ACCOUNTS AND RECORDS.

Each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the
Rules (17 CFR 270.31a-1 to 31a-3) promulgated
thereunder is in the physical possession of Jones &
Babson, Inc., at Three Crown Center, 2440 Pershing
Road, G-15, Kansas City, Missouri 64108.

Item 31. MANAGEMENT SERVICES.

All management services are covered in the management
agreement between the Registrant and Jones & Babson,
Inc., which are discussed in Parts A and B.

Item 32. DISTRIBUTION EXPENSES.

Not applicable.

Item 33. UNDERTAKINGS.

Registrant undertakes that, if requested to do so by
the holders of at least 10% of the registrant's
outstanding shares, to call a meeting of shareholders
for the purpose of voting upon the question of removal
of a director or directors and to assist in
communications with other shareholders as required by
Section 16(c) of the Investment Company Act of 1940, as
amended.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this amendment to its
registration statement to be signed on its behalf by the
undersigned, thereunto authorized, in the City of Kansas City,
and State of Missouri on the 14th day of March, 1997.
D.L. BABSON BOND TRUST
(Registrant)

By Larry D. Armel
(Larry D. Armel, President)

Pursuant to the requirements of the Securities Act of 1933,
this Post-effective Amendment #97 to the Registration Statement
has been signed below by the following persons in the capacities
and on the date indicated.

Larry D. Armel President, Principal March 14, 1997
Larry D. Armel Executive Officer,
and Trustee

Francis C. Rood Trustee March 14, 1997
Francis C. Rood*

Trustee
William H. Russell Trustee March 14, 1997
William H. Russell*

H. David Rybolt Trustee March 14, 1997
H. David Rybolt*

P. Bradley Adams Treasurer and March 14, 1997
P. Bradley Adams Principal Financial
and Accounting Officer

*Signed pursuant to Power of Attorney

By Larry D. Armel
Attorney-in Fact

REPRESENTATIONS OF COUNSEL

I assisted in the preparation of this Post Effective Amendment to
the Fund's Registration Statement filed under the Securities Act
of 1933 and the Amendment to the Fund's Registration Statement
filed under the Investment Company Act of 1940. Based on my
review it is my opinion that this amendment does not contain
disclosures which would render it ineligible to become effective
pursuant to paragraph (b) of Rule 485 under the Securities Act of
1933.

John G. Dyer Attorney March 14, 1997
John G. Dyer

Consent of Independent Auditors

We consent to the references to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the incorporation by
reference of our report dated December 27, 1996 in this post-effective
amendment to the Registration Statement (Form N-lA) and related Prospectus
of D.L. Babson Bond Trust filed with the Securities and Exchange
Commission under the Securities Act of 1933.

Ernst & Young LLP
Ernst & Young LLP

Kansas City, Missouri
March 13, 1997

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
D.L. BABSON BOND TRUST - PORTFOLIO L
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 141230981
<INVESTMENTS-AT-VALUE> 143632761
<RECEIVABLES> 2226963
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
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<ARTICLE> 6
<LEGEND>
D.L. BABSON BOND TRUST - PORTFOLIO S
</LEGEND>

<S> <C>
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