<PAGE> PAGE 1
000 B000000 03/31/95
000 C000000 0000927424
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 KEYSTONE STRATEGIC DEVELOPMENT FUND
001 B000000 811-8694
001 C000000 6173383200
002 A000000 200 BERKELEY STREET
002 B000000 BOSTON
002 C000000 MA
002 D010000 02160
002 D020000 5034
003 000000 Y
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
011 A000001 KEYSTONE INVESTMENT DISTRIBUTORS COMPANY
011 B000001 8-395
011 C010001 BOSTON
011 C020001 MA
011 C030001 02116
011 C040001 5034
012 A000001 KEYSTONE INVESTOR RESOURCE CENTER, INC.
012 B000001 84-1571
012 C010001 CAMBRIDGE
012 C020001 MA
012 C030001 02142
013 A000001 KPMG PEAT MARWICK LLP
013 B010001 BOSTON
013 B020001 MA
013 B030001 02116
015 A000001 STATE STREET BANK & TRUST COMPANY
015 B000001 C
015 C010001 QUINCY
015 C020001 MA
015 C030001 02171
015 E010001 X
018 000000 Y
019 A000000 Y
019 B000000 20
019 C000000 KEYGROUPPA
020 A000001 MERRI LYNCH
020 C000001 10
021 000000 10
<PAGE> PAGE 2
022 A000001 JOINT REPO
022 C000001 214438
022 D000001 0
022 A000002 PRUDENTIAL
022 C000002 91022
022 D000002 0
022 A000003 PAINE WEBBER
022 C000003 54300
022 D000003 0
022 A000004 J.B. WERE
022 C000004 34337
022 D000004 0
022 A000005 GOLDMAN
022 C000005 21733
022 D000005 0
022 A000006 DEAN WITTER
022 C000006 12029
022 D000006 0
022 A000007 MONTGOMERY
022 C000007 11995
022 D000007 0
022 A000008 VAN KASPER
022 C000008 6698
022 D000008 0
022 A000009 BANKER TRUST
022 C000009 5975
022 D000009 0
022 A000010 SMITH BARNEY
022 C000010 4000
022 D000010 0
023 C000000 672045
023 D000000 0
024 000000 N
026 A000000 Y
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 0
028 A020000 0
028 A030000 3871
028 A040000 0
028 B010000 0
028 B020000 0
028 B030000 12391
028 B040000 173
<PAGE> PAGE 3
028 C010000 0
028 C020000 0
028 C030000 5572
028 C040000 451
028 D010000 0
028 D020000 0
028 D030000 1639
028 D040000 210
028 E010000 0
028 E020000 0
028 E030000 832
028 E040000 362
028 F010000 0
028 F020000 0
028 F030000 263
028 F040000 789
028 G010000 0
028 G020000 0
028 G030000 24567
028 G040000 1986
028 H000000 0
029 000000 Y
030 A000000 300
030 B000000 5.75
030 C000000 5.75
031 A000000 1
031 B000000 0
032 000000 299
033 000000 0
034 000000 N
035 000000 0
036 B000000 0
037 000000 N
038 000000 0
039 000000 N
040 000000 Y
041 000000 Y
042 A000000 0
042 B000000 0
042 C000000 100
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 63
044 000000 0
045 000000 Y
046 000000 Y
047 000000 Y
048 000000 1.000
<PAGE> PAGE 4
048 A010000 0
048 A020000 0.000
048 B010000 0
048 B020000 0.000
048 C010000 0
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
048 E020000 0.000
048 F010000 0
048 F020000 0.000
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 N
051 000000 N
052 000000 N
053 A000000 N
054 A000000 Y
054 B000000 N
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 Y
055 A000000 N
055 B000000 N
056 000000 N
057 000000 N
058 A000000 N
059 000000 Y
060 A000000 Y
060 B000000 Y
061 000000 1000
<PAGE> PAGE 5
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
066 A000000 Y
066 E000000 Y
067 000000 Y
068 A000000 N
068 B000000 Y
069 000000 N
070 A010000 Y
070 A020000 Y
070 B010000 Y
070 B020000 N
070 C010000 N
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 N
070 E020000 N
070 F010000 Y
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 Y
070 K020000 Y
070 L010000 Y
070 L020000 Y
070 M010000 Y
070 M020000 Y
070 N010000 N
<PAGE> PAGE 6
070 N020000 N
070 O010000 N
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 Y
070 Q020000 N
070 R010000 Y
070 R020000 N
071 A000000 19791
071 B000000 1503
071 C000000 11211
071 D000000 13
072 A000000 6
072 B000000 145
072 C000000 60
072 D000000 0
072 E000000 0
072 F000000 77
072 G000000 0
072 H000000 0
072 I000000 17
072 J000000 32
072 K000000 0
072 L000000 19
072 M000000 0
072 N000000 12
072 O000000 0
072 P000000 0
072 Q000000 10
072 R000000 16
072 S000000 10
072 T000000 63
072 U000000 0
072 V000000 0
072 W000000 4
072 X000000 260
072 Y000000 0
072 Z000000 -55
072AA000000 0
072BB000000 1121
072CC010000 0
072CC020000 536
072DD010000 0
072DD020000 0
072EE000000 0
073 A010000 0.0000
073 A020000 0.0000
073 B000000 0.0000
073 C000000 0.0000
074 A000000 1
<PAGE> PAGE 7
074 B000000 4111
074 C000000 0
074 D000000 0
074 E000000 0
074 F000000 16615
074 G000000 0
074 H000000 0
074 I000000 252
074 J000000 2592
074 K000000 0
074 L000000 118
074 M000000 69
074 N000000 23758
074 O000000 2679
074 P000000 0
074 Q000000 0
074 R010000 108
074 R020000 0
074 R030000 0
074 R040000 0
074 S000000 0
074 T000000 20971
074 U010000 2332
074 U020000 0
074 V010000 9.00
074 V020000 0.00
074 W000000 0.0000
074 X000000 0
074 Y000000 0
075 A000000 0
075 B000000 17111
076 000000 0.00
077 A000000 Y
077 Q010000 Y
080 A000000 ICI MUTUAL INSURANCE CO.
080 C000000 35000
081 A000000 Y
081 B000000 36
082 A000000 N
082 B000000 0
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 N
085 B000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
<PAGE> PAGE 8
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
SIGNATURE KEVIN MORRISSEY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS A
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> OCT-17-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 21,537,936
<INVESTMENTS-AT-VALUE> 20,977,527
<RECEIVABLES> 2,709,757
<ASSETS-OTHER> 70,194
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23,757,478
<PAYABLE-FOR-SECURITIES> 2,679,283
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 107,722
<TOTAL-LIABILITIES> 2,787,005
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,267,256
<SHARES-COMMON-STOCK> 542,279
<SHARES-COMMON-PRIOR> 3,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 4,608
<ACCUMULATED-NET-GAINS> (257,009)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (124,940)
<NET-ASSETS> 4,889,915
<DIVIDEND-INCOME> 17,347
<INTEREST-INCOME> 32,335
<OTHER-INCOME> 1,415
<EXPENSES-NET> (52,303)
<NET-INVESTMENT-INCOME> (1,206)
<REALIZED-GAINS-CURRENT> (258,856)
<APPREC-INCREASE-CURRENT> (124,940)
<NET-CHANGE-FROM-OPS> (385,002)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 594,548
<NUMBER-OF-SHARES-REDEEMED> (55,269)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,246,176
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (17,834)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (53,353)
<AVERAGE-NET-ASSETS> 4,020,378
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.00)
<PER-SHARE-GAIN-APPREC> (0.98)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.02
<EXPENSE-RATIO> 2.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS B
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> OCT-17-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 21,537,936
<INVESTMENTS-AT-VALUE> 20,977,527
<RECEIVABLES> 2,709,757
<ASSETS-OTHER> 70,194
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23,757,478
<PAYABLE-FOR-SECURITIES> 2,679,283
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 107,722
<TOTAL-LIABILITIES> 2,787,005
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,843,917
<SHARES-COMMON-STOCK> 1,634,469
<SHARES-COMMON-PRIOR> 3,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (25,404)
<ACCUMULATED-NET-GAINS> (779,896)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (350,825)
<NET-ASSETS> 14,687,792
<DIVIDEND-INCOME> 52,056
<INTEREST-INCOME> 96,092
<OTHER-INCOME> 4,223
<EXPENSES-NET> (195,066)
<NET-INVESTMENT-INCOME> (42,695)
<REALIZED-GAINS-CURRENT> (785,387)
<APPREC-INCREASE-CURRENT> (350,825)
<NET-CHANGE-FROM-OPS> (1,178,907)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,787,714
<NUMBER-OF-SHARES-REDEEMED> (156,245)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,840,441
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (53,062)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (198,165)
<AVERAGE-NET-ASSETS> 11,812,119
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> (0.98)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 3.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS C
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> OCT-17-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 21,537,936
<INVESTMENTS-AT-VALUE> 20,977,527
<RECEIVABLES> 2,709,757
<ASSETS-OTHER> 70,194
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23,757,478
<PAYABLE-FOR-SECURITIES> 2,679,283
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 107,722
<TOTAL-LIABILITIES> 2,787,005
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,532,315
<SHARES-COMMON-STOCK> 155,020
<SHARES-COMMON-PRIOR> 4,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (3,455)
<ACCUMULATED-NET-GAINS> (75,700)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (60,394)
<NET-ASSETS> 1,392,766
<DIVIDEND-INCOME> 5,404
<INTEREST-INCOME> 10,203
<OTHER-INCOME> 429
<EXPENSES-NET> (21,369)
<NET-INVESTMENT-INCOME> (5,333)
<REALIZED-GAINS-CURRENT> (76,297)
<APPREC-INCREASE-CURRENT> (60,394)
<NET-CHANGE-FROM-OPS> (142,024)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 160,011
<NUMBER-OF-SHARES-REDEEMED> (8,991)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,495,195
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (5,695)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (21,698)
<AVERAGE-NET-ASSETS> 1,278,613
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> (0.98)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 3.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Trustees and Shareholders
Keystone Strategic Development Fund
In planning and performing our audit of the financial statements of Keystone Tax
Free Fund for the year ended December 31, 1994 we considered its internal
control structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of Keystone Tax Free Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1994.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
May 5, 1995
