PAGE 1
000 B000000 03/31/98
000 C000000 919893
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 TEMPLETON DRAGON FUND, INC.
001 B000000 811-8874
001 C000000 9545277591
002 A000000 500 E. BROWARD BLVD. SUITE 2100
002 B000000 FT. LAUDERDALE
002 C000000 FL
002 D010000 33394
002 D020000 3091
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008 B000001 A
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008 D010001 HONG KONG
008 D050001 HONG KONG
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010 C030001 33394
010 C040001 3091
012 A000001 CHASEMELLON SHAREHOLDER SERVICES
012 B000001 85-0000
012 C010001 RIDGEFIELD PARK
012 C020001 NJ
PAGE 2
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012 C030002 10038
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013 B020001 NY
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013 B040001 2416
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PAGE 3
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PAGE 4
015 E040016 X
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PAGE 5
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PAGE 6
015 D020034 28046
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PAGE 7
015 D010044 MAURITIUS
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PAGE 8
015 D010056 CYPRUS
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PAGE 9
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PAGE 10
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PAGE 11
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PAGE 12
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PAGE 13
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PAGE 14
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PAGE 15
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PAGE 16
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SIGNATURE /s/JAMES R. BAIO
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEMPLETON
DRAGON FUND, INC. MARCH 31, 1998 ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000919893
<NAME> TEMPLETON DRAGON FUND, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 744082137
<INVESTMENTS-AT-VALUE> 738484537
<RECEIVABLES> 3004214
<ASSETS-OTHER> 20622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 741509373
<PAYABLE-FOR-SECURITIES> 6969471
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1007289
<TOTAL-LIABILITIES> 7976760
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 759294959
<SHARES-COMMON-STOCK> 54007093
<SHARES-COMMON-PRIOR> 54007093
<ACCUMULATED-NII-CURRENT> 1841207
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (22005953)
<ACCUM-APPREC-OR-DEPREC> (5597600)
<NET-ASSETS> 733532613
<DIVIDEND-INCOME> 27516175
<INTEREST-INCOME> 6267349
<OTHER-INCOME> 0
<EXPENSES-NET> (14059587)
<NET-INVESTMENT-INCOME> 19723937
<REALIZED-GAINS-CURRENT> 13713305
<APPREC-INCREASE-CURRENT> (207043045)
<NET-CHANGE-FROM-OPS> (173605803)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18632447)
<DISTRIBUTIONS-OF-GAINS> (59947873)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (252186123)
<ACCUMULATED-NII-PRIOR> 880701
<ACCUMULATED-GAINS-PRIOR> 24097631
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (11499336)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (14059587)
<AVERAGE-NET-ASSETS> 919881969
<PER-SHARE-NAV-BEGIN> 18.25
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> (3.58)
<PER-SHARE-DIVIDEND> (0.35)
<PER-SHARE-DISTRIBUTIONS> (1.11)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.58
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Board of Directors and Shareholders
Templeton Dragon Fund, Inc.
In planning and performing our audit of the financial statements of Templeton
Dragon Fund, Inc. for the year ended March 31, 1998, we considered its internal
control, including controls over safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, not to
provide assurance on internal control.
The management of Templeton Dragon Fund, Inc. is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally accepted
accounting principles. Those controls include safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and may not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of the
specific internal control component does not reduce to a relatively low level
the risk that errors or fraud in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
controls over safeguarding securities, that we consider to be material
weaknesses as defined above as of March 31, 1998.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/MCGLADREY & PULLEN, LLP
New York, New York
April 24, 1998
